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Qualified Small Employer HRAs (QSEHRAs)

This page features general information on the following topics regarding qualified small employer health reimbursement arrangements (QSEHRAs):

  • Overview
  • Eligibility Rules
  • Contribution Rules
  • Distribution Rules
  • Written Notice Requirement
  • Form W-2 Reporting Requirement
  • PCORI Reporting Requirement
  • Noncompliance Penalties
  • Additional Information


QSEHRAs are health reimbursement arrangements exempt from the ACA's market reforms. To be a QSEHRA, the arrangement generally must:

  • Be funded solely by an eligible employer without salary reduction contributions;
  • Provide—after an eligible employee provides proof of minimum essential coverage—payment or reimbursement of qualified medical expenses (which includes premiums for other health coverage, such as individual health insurance) incurred by the employee or his or her family members;
  • Limit annual payments and reimbursements to $4,950 per employee (increased to $5,050 for 2018) or $10,000 per family (increased to $10,250 for 2018), and prorated where coverage is less than the entire year; and  
  • Be provided on the same terms to all eligible employees.  

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