Frequently Asked Questions about the BASE® QSE HRA Plan.

Why would an employer adopt a BASE® QSE HRA?
There are many potential reasons why an employer may look at enrollment into a BASE® QSE HRA:

  • The employer is no longer able to afford offering a group sponsored health insurance plan.
  • The employer simply wants to be able to offer employees a means of paying for out-of-pocket health care spending.

Are medical expenses incurred prior to establishing a BASE® QSE HRA eligible for reimbursement?
Medical expenses incurred prior to your enrollment in an HRA are not eligible for reimbursement. Only those expenses incurred after you establish a plan can be included. The IRS reiterated this position in a document published in March 1999 titled "Retroactivity". The IRS also issued Revenue Ruling 2002-58 to address issues caused by some plans that were still out of compliance.

Can an owner participate?
This is a true HRA so owners cannot participate – only employees and employee shareholders.

Can someone take a subsidy and still qualify for the QSE HRA?
Technically, yes, but the QSE HRA funds are reported and considered when applying for a subsidy, so having the HRA may reduce or eliminate an employee’s eligibility.