Stand-Alone HRAs (QSEHRA) for Small Businesses

On Dec. 13 President Barack Obama signed the 21st Century  Cures Act into law. The law allows small businesses to use HRAs to fund employees who purchase individual health plans on the open market.

Employers that don't sponsor a group health plan and who have fewer than 50 full-time employees can fund employee HRAs to pay premiums in the individual insurance market.

Some highlights include:

  • Using the QSEHRA, small business employers can provide a maximum reimbursement of $4,950 for singles and $10,000 for families.
  • The employer must make QSEHRAs available to all qualified full-time employees.
  • The employer must provide equal contributions for all eligible employees, but amounts can vary due to factors of policy price, relevant market, employee age and family members covered.

Click here for a complete listing of QSEHRA provisions. (PDF)

The 21st Century Cures Act took effect following Dec. 31, 2016. For those employers that have already made plans for 2017, it is an option they may want to consider for the coming years.

Redwood Health Services will be able to provide the necessary documents and support to facilitate any employer that may choose to provide this benefit.

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