Overview

The BASE® Qualified Small Employer Health Reimbursement Arrangement (QSE HRA) helps employers offer their employees a more attractive benefits package. Thanks to new legislation, employers can help their employees pay for qualified medical coverage for themselves and their families, tax-free. The employees can use the money for insurance premiums, co-pays, deductibles, eye care, dental care, or any other qualified healthcare expense. The amount provided is tax-free to the employees and 100% tax deductible to the employer.

With a QSE HRA, employees have the ability to secure their own medical insurance either on or off the Marketplace. This allows the employee to have an active role in finding the right medical coverage for their situation.

Benefit to Employer:

Employee Satisfaction.
Attract and retain talented employees with an increased benefit package.

Tax Benefit.
All reimbursements are 100% deductible as a business expense.

Controlled Funding Limits.
Employer determines benefit amount and only pays when an expense is substantiated. No prefunding is required.

Peace of Mind.
All legal and administrative concerns are taken care of by BASE®.

Benefit to Employee:

Cost Savings.
Employees now have additional money to help with the rising cost of healthcare.

No Taxes.
All reimbursements are considered non-taxable income.

Convenience.
Easy way to get reimbursed for healthcare expenses.

Plan Eligibility

This plan provides an option when it comes to paying for out-of-pocket medical costs, including health insurance premiums. Guidelines for qualifying for this type of plan include the following, but be sure to contact BASE® with any questions regarding eligibility.

Guidelines
  • Employer must have less than 50 full-time equivalents (FTEs).
  • Employer does not offer a Group Health Plan to any employees.
  • Must be provided on the same terms to all eligible employees.
  • The employer can set different benefit limits for single employees versus married up to the annual maximum established by the IRS.
  • Employees must secure medical insurance that meets the minimum essential coverage definition and provide proof of coverage in order for reimbursement to be tax free.

QSE HRA Savings

With the BASE® QSE HRA in place, employers will have the applicable plan documents to legally offer this benefit. Employers can rest assured that they have a compliant benefit option when group health insurance is no longer an option. With this type of tax-preferred benefit in place, employees will know in advance how much will be available for reimbursement of qualified medical expenses.

  • Employer decides on the benefit amount to offer up to current approved limit set by the IRS to reimburse medical expenses incurred by the employee – like a regular HRA, a QSE HRA is funded solely (100%) by the employer.
  • Tax-free reimbursements for health insurance premiums and eligible out-of-pocket medical costs.
  • Flexible benefit solution to help with cost of health care and strengthen benefit packages to retain good employees.

Frequently Asked Questions

Medical expenses incurred prior to your enrollment in an HRA are not eligible for reimbursement. Only those expenses incurred after you establish a plan can be included. The IRS reiterated this position in a document published in March 1999 titled "Retroactivity". The IRS also issued Revenue Ruling 2002-58 to address issues caused by some plans that were still out of compliance.

This is a true HRA so owners cannot participate – only employees and employee shareholders.

Technically, yes, but the QSE HRA funds are reported and considered when applying for a subsidy, so having the HRA may reduce or eliminate an employee’s eligibility.

No. This plan is only for medical insurance premiums and medical out-of-pocket expenses.

No. This plan is only for medical insurance premiums and medical out-of-pocket expenses.

Yes.

No, because it is required the amount of funds provided by the QSE HRA is reported on the W-2 and that needs to happen by January 31st. Therefore, it is in the best interest of the employer to require all expenses are turned in for approval as close to the end of the calendar year as possible.

The QSE HRA can be for premiums only, for all 213(d) expenses or both.

Contact Us

Send us your questions or comments by filling out this form and a BASE® representative will call within one business day, or call (800) 370-9607 to speak with a support specialist during our office hours.

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