QSEHRA: How Did We Get Here?

For many years, employers have found ways to support their employees’ health care needs.  With each year, and in response to new market needs and challenges, new health benefit plans have been created.  The Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) is no exception.

Many small employers find that a group health plan is too big of an expense to provide for their employees.  So, what could they do?

The QSEHRA has been around since 2017, but many small employers, with less than 50 full-time employees, do not know much about them. 

How did we get here?

In the 1970s, employers turned to medical reimbursement plans to help alleviate some of the financial burden of health-related expenses to their employees.  In 2002, the IRS published a notice that created the HRAs we know today.  They are owned and funded by the employer, helping employees to pay for their qualified copays, deductibles, prescriptions, and other eligible out-of-pocket expenses not covered by the group health plan. 

The introduction of HRAs was a great way for the larger employers to support their employees, but for the smaller employers who had problems affording a group help plan, it wasn’t a great way at all.  Many employers were left to either purchase a group health plan and struggle to afford it or not provide employees with relief needed when it came to health care expenses.

In 2010, the Affordable Care Act was enacted, taking it one step in the right direction, but we weren’t quite there yet.  In 2017, the 21st Century Cures Act was enacted giving certain employers the option to offer the QSEHRA. 

The QSEHRA lets employers with less than 50 full-time employees offer health benefits without offering a group health plan.  The employer decides the benefit amount to offer, up to the current approved limit set by the IRS, to reimburse the health care expenses incurred by their employees. 

The BASE® QSEHRA allows employees to secure their own health care insurance on or off the Marketplace and to pay for their health insurance premiums and eligible out-of-pocket health care expenses. 

It may have taken a few years to get to where we are now, but as the health care industry continues to evolve, so will the health benefits products and services to help employers provide their employees with an attractive tax-advantaged health benefits plan to pay for their health care expenses.

For employers who seek to offer their employees health benefits, the QSEHRA is a beneficial Health Reimbursement Arrangement.  Contact BASE® at 888.386.9680 or visit www.BASEonline.com.

6 Reasons Employees Will Love an FSA/HSA

Valentine’s Day is just around the corner!  For many, it is a day to celebrate the ones you love with cards, flowers, chocolates, and more.  But one of the best ways an employer can celebrate this day is to provide a health benefits package to their employees, because nothing says, “I love my employees” more than investing in them!

One of the best ways is with a Flexible Spending Account (FSA) or Health Savings Account (HSA)!

Why?  Because the FSA and HSA are both pre-tax accounts that employees can use to pay for their qualified out-of-pocket health care expenses.  Both health benefits are great options to enhance an employer’s benefits package, helping employees save 25-40% in taxes for every dollar they elect. 

The BASE® FSA allows employees to pay for their qualified expenses with all funds elected available on day 1 of the plan year. 

The BASE® HSA allows employees to save and pay for qualified expenses now or in the future with funds growing as they put their money into the account on a pre-tax basis each year. 

Here are 6 reasons employees will love an FSA/HSA:

  1. Reduces taxable income which increases take-home pay. When an employee puts money into their FSA or HSA on a pre-tax basis, it helps to save on federal, state, Social Security, and Medicare taxes. 
  2. Use on a tax-free basis. When employees use the FSA/HSA to pay for qualified out-of-pocket health care expenses, they do not pay taxes on those funds being used. 
  3. Share the love with family. One of the best parts about the FSA/HSA is that employees can use those funds on their loved ones (as long as they are qualified dependents) and their health care needs. 
  4. Lots of qualified expenses. The IRS has approved hundreds of health care items and services as FSA/HSA-eligible.  Employees can spend their funds on eligible over-the-counter medications, prescriptions, copays, deductibles, dental visits, eye exams, and so much more. 
  5. Potential future use. With the HSA, employees continue to rollover funds each year, no matter what.  The money stays in the account and continues to grow.  With the FSA, depending on plan design, there might be a “grace period,” “carryover,” or “use-it-or-lose-it.”
  6. Peace of mind. Employees will have peace of mind knowing that they are putting away funds to pay for any unexpected doctor visit, surgery, or procedure that they weren’t planning on for the year.

There are so many more reasons for employees to love pre-tax health benefits, but employers benefit too.  The bottom line is that the tax advantages for both the employee and employer are hard not to love.  Contact BASE® at 888.386.9680 or visit www.BASEonline.com.