The difference between HRAs and Group Health Insurance for Small Business

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The difference between HRAs and Group Health
Insurance for Small Business

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Overview
HRAs for small employers Group Health Insurance for small employers
Known as a QSEHRA, this is a specific arrangement for small employers to reimburse employees' qualifying medical expenses, like premiums for individual coverage or other expenses on a tax-free basis. A group health insurance plan offered by an insurance company for eligible small employers.
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Reimbursement model
HRAs for small employers Group Health Insurance for small employers
Defined contribution employers select how much money to contribute to employees, up to the allowed annual limit of 5,150 for individuals and 10,450 for families (increases annually for inflation). Defined benefit employers offer a plan and in some cases are able to offer a selection of plans to their employees.
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Eligible businesses
HRAs for small employers Group Health Insurance for small employers
Generally, small employers with 150 employees (other than certain owners or their spouses) who do not offer other group health plan coverage. Generally, small employers with 150 employees (other than certain owners or their spouses) may be eligible for SHOP coverage.

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Coverage
HRAs for small employers Group Health Insurance for small employers
Employees can generally choose how they use a QSEHRA as long as they use it for qualifying health care expenses, and they also have minimum essential coverage, such as a plan from the Individual Marketplace. Employees have a plan or selection of plans to choose from that offer minimum essential coverage, based on what the employer offers.


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Enrollment
HRAs for small employers Group Health Insurance for small employers
Employers can provide a QSEHRA at any time of the year, but must provide notice to their employees 90 days in advance. Employees with a newly provided QSEHRA will be eligible for a Special Enrollment Period in the Marketplace. Small businesses generally can enroll any time of the year.



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Employer contributions
HRAs for small employers Group Health Insurance for small employers
Small employers can decide what they will contribute to their employees' health care costs, up to the annual maximum. There is no contribution requirement for SHOP coverage, though to be eligible for the Small Business Health Care Tax Credit, employers must contribute at least 50 of the cost of premiums for all full-time employees who enroll in SHOP coverage.



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Tax Information
HRAs for small employers Group Health Insurance for small employers
QSEHRA reimbursements are not taxed to the employee if the QSEHRA is affordable for an employee, the employee is not allowed a premium tax credit for the employee's Marketplace coverage. If the QSEHRA is unaffordable, the employee must offset any premium tax credit by the amount of the QSEHRA. Group health plan contributions are generally not taxed to the employee. If a qualifying employer offers SHOP coverage, the employer may be eligible for the Small Business Health Care Tax Credit.



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Group Health Insurance Employee Benefits in
North Carolina

• Independent Benefit Advisors can help you with a
  large range of group health benefits options,
  including
• Small Groups 2-49
• Medium Groups 50-249
• Large Groups 250
• Financial Arrangements
• Flexible Spending Accounts
• Health Savings Accounts
• Group Dental
• Group Vision
• Group Life
• Group Disability
• Worksite Benefits
• Long-Term Care

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Contact Us
Address 1121 Pemberton Hill Rd, Apex, NC
27502 Phone [phone] Toll Free (888)
303-9690 Fax [phone] ID
john_at_thebenefitadvisors.com Website
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