QSEHRA: How Did We Get Here?
For many years, employers have found ways to support their employees’ health care needs. With each year, and in response to new market needs and challenges, new health benefit plans have been created. The Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) is no exception.
Many small employers find that a group health plan is too big of an expense to provide for their employees. So, what could they do?
The QSEHRA has been around since 2017, but many small employers, with less than 50 full-time employees, do not know much about them.
How did we get here?
In the 1970s, employers turned to medical reimbursement plans to help alleviate some of the financial burden of health-related expenses to their employees. In 2002, the IRS published a notice that created the HRAs we know today. They are owned and funded by the employer, helping employees to pay for their qualified copays, deductibles, prescriptions, and other eligible out-of-pocket expenses not covered by the group health plan.
The introduction of HRAs was a great way for the larger employers to support their employees, but for the smaller employers who had problems affording a group help plan, it wasn’t a great way at all. Many employers were left to either purchase a group health plan and struggle to afford it or not provide employees with relief needed when it came to health care expenses.
In 2010, the Affordable Care Act was enacted, taking it one step in the right direction, but we weren’t quite there yet. In 2017, the 21st Century Cures Act was enacted giving certain employers the option to offer the QSEHRA.
The QSEHRA lets employers with less than 50 full-time employees offer health benefits without offering a group health plan. The employer decides the benefit amount to offer, up to the current approved limit set by the IRS, to reimburse the health care expenses incurred by their employees.
The BASE® QSEHRA allows employees to secure their own health care insurance on or off the Marketplace and to pay for their health insurance premiums and eligible out-of-pocket health care expenses.
It may have taken a few years to get to where we are now, but as the health care industry continues to evolve, so will the health benefits products and services to help employers provide their employees with an attractive tax-advantaged health benefits plan to pay for their health care expenses.
For employers who seek to offer their employees health benefits, the QSEHRA is a beneficial Health Reimbursement Arrangement. Contact BASE® at 888.386.9680 or visit www.BASEonline.com.
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