Straight To the Point: What Is In Store For the QSE HRA In 2018?

Introduced with the signing of the 21st Century Cures Act on December 13, 2016, the BASE® Qualified Small Employer Health Reimbursement Arrangement (QSE HRA) helps employers offer their employees a more attractive benefit package.  This new legislation instituted an arrangement allowing employers to help their employees pay for 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 health care 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.

Additional regulations were recently introduced by the IRS with Notice 2017-67.  Few significant changes for the QSE HRA are in store; the Notice includes proposed regulations providing more defined guidelines with a request for feedback by January 19, 2018.  In the meantime, these new regulations took effect on November 20, 2017.  Failure to comply could result in a $100 per employee, per day penalty.

So what is in store for the QSE HRA in 2018?

Statutory Dollar Limits increased to $5,050 self-only/$10,250 family

  • Must provide proof of Minimum Essential Coverage (MEC)
  • Written Notices must be distributed 90 days prior to every plan year or on/before first day of eligibility while including eligibility date and limits
  • Offered on same terms to all employees

Some other requirements mentioned in Notice 2017-67 regarding the QSE HRA for 2018 are Substantiation Requirement, Coordination with Premium Tax Credits, Failure to Satisfy the Requirements to be a QSE HRA, Interaction with HSA Requirements, and Effective Date.

To learn more about the NEW QSE HRA Notice 2017-67, click the link to read the full notice, or call 1-888-386-9680 and let BASE® help you fully understand what is in store for the QSE HRA in 2018.