How a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) Can Benefit Your Small Organization

Do you need a Qualified Small Employer Health Reimbursement Arrangement? And, just as importantly, do you want one?

How can a QSEHRA actually benefit you?

Those are important questions that, in order to properly answer, must begin with legalities. Because, with few exceptions, you must provide medical benefits in some form to your employees if you have 50 or more employees on your payroll.

But even if you’re working with fewer staff members, that doesn’t mean you shouldn’t at least explore the possibility. After all, your employees should be your top priority in developing your organization. Happy employees produce better products, offer better services, and contribute better ideas… all of which lead to happier, more loyal customers.

In short, implementing the right benefits demonstrates your dedication to your workers, their  families, and the communities you serve.

Of course, if you have less than 50 full-time employees, you’re likely working with more limited finances. Yet you can still provide at least some benefit coverage to those who currently lack it – without breaking your bank.

IHN HR can provide you with worthwhile options complete with detailed evaluations and explanations on how to implement them. We serve clients nationally, some with many employees, some with few. But across the board, we’ve seen organization owners, leaders, and senior pastors express their desire to provide the best possible benefits to those working for them.

And we’ve been right there to help them achieve those goals.

One possibility is to offer taxable stipends in lieu of health insurance or an HRA. Employees receive these stipends tax-free as long as they have minimum basic coverage, and employers can deduct them as well.

Now, these are only available to organizations with 50 or fewer full-time equivalent employees (FTEs), according to the Affordable Care Act’s employer mandate. So if you have a larger payroll count, an Health Reimbursement Arrangement (HRA) may be your best bet instead.

For those organizations that do qualify, however, providing a stipend can help workers offset their medical plan costs, if they’re on the Affordable Care Act medical benefit program or medical sharing programs like Medi-Share, Christian Healthcare Ministries, and Samaritan Ministries.

If this sounds right for you, opening a QSEHRA plan might be your first step. This allows select small organizations – usually those that don’t provide group health plans – to pay for their staffs’ healthcare costs through non-tax compensation for specific medical costs, such as coinsurance and health insurance premiums.

The minimum essential coverage package includes an individual Marketplace plan (The federal government offers assistance to individuals, families, and small companies through the Health Insurance Marketplace®), with additional benefits determined state by state. But even at its most basic form, QSEHRAs can greatly reduce the time and financial burden of managing or overseeing more complex group health plan coverage, especially with employers in multi states.

Allowing the employee to choose their plan locally avoids the employer having to do the same but for all the employees on a plan.

In order to provide a QSEHRA, small employers must:

• Employ fewer than 50 people full-time
• Give all full-time staff identical terms for the benefit (The amount of compensation can only differ according to age and the number of people covered.)
• Not provide a flexible spending account (FSA) or a group health plan, such as through the Small Business Health Options Program (SHOP).

Is this the right route for you? Or would you best benefit from a different plan?

Regardless, you must offer incentives that excellent employees desire in order to fulfill your goal, realize your vision, and embody your organization’s values. And there are options out there to help you do just that.

If you need help bringing a strategic approach to your benefit offerings, reach out to us today. We would love to serve you!

In His Name HR helps organizations build high-performance human resource programs. E-mail us here.