21st Century Cures Act Signed Into Law

On December 13, 2016, President Obama signed the 21st Century Cures Act into law.  While the act covers mainly medical research and innovations, it also includes a provision for Qualified Small Employer Health Reimbursement Accounts, also known as a QSEHRA.

What is a QSEHRA?

A QSEHRA is available to employers for plan years beginning after December 31, 2016 and can be a great option for employers who have less than 50 full-time employees and do not currently offer group health benefits.  The QSEHRA is established to reimburse employees for their  individual health insurance premiums and eligible unreimbursed medical expenses.  Premiums paid to purchase other group health coverage (e.g. through a spouse’s employer sponsored plan) are NOT eligible for reimbursement through the QSEHRA.  QSEHRA eligibility requirements must be the same for all eligible employees although the HRA benefits can vary based on the age and family-size of the employee.

QSEHRA Rules and Regulations

  • Annual benefits under a QSEHRA cannot exceed $4,950.00 per year for a single subscriber or $10,000 per year for a family.
  • Employers must report contributions to an QSEHRA on the employees’ w-2 each year.
  • Employees who utilize the QSEHRA must report the reimbursement to the Marketplace when applying for subsidies and tax credits.  The reimbursement may affect the amount of subsidy and tax credit that the employee receives.
  •  The employer must provide a statement to employees which contains the following information:
    • The amount of funds available through the QSEHRA
    • Instructions for the employee to provide the statement to the Marketplace when applying for a subsidy or tax credit
    • A statement indicating that the reimbursements are taxable if the employee does not have minimum essential healthcare coverage.

Questions about setting up a  QSEHRA?  Call Benefits Network at 724 940 9400 (Wexford Office) or 814 445 4943 (Somerset Office)