ICHRA vs. QSEHRA

In this section, we will dissect the key differences between QSEHRA and ICHRA, shedding light on their eligibility requirements, contribution limitations, and design flexibility. 

QSEHRA - Tailored for Small Employers

A Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) is designed specifically for small employers to provide tax-free reimbursement for qualifying medical expenses, including individual coverage premiums and other eligible costs. 

ICHRA - A Versatile Solution

The Individual Coverage Health Reimbursement Arrangement (ICHRA) caters to employers of all sizes, enabling tax-free reimbursement of qualifying medical expenses, such as individual coverage premiums and Medicare-related costs. 

Reimbursement Model

Under QSEHRA, employers adopt a defined contribution approach, where they decide the contribution amount for employees up to the annual limit. In 2024, small businesses can offer up to $6,150 for individual employee coverage and up to $12,450 for employees with dependents. 

ICHRA also operates on a defined contribution basis, but without an annual maximum limit. Employers determine the contribution amount for their employees, allowing for greater flexibility in tailoring benefits. 

Eligible Businesses

QSEHRA is tailored for small employers with a range of 1 to 50 full-time employees. All full-time employees and their families qualify for the benefit, and the option exists to extend eligibility to part-time employees as long as the allowance is consistent for both groups. 

ICHRA is available to employers of any size, with at least one employee. Employers can structure contributions based on 11 distinct employee classes. 

If you are looking for more information about ICHRA or QSEHRA, contact our ICHRA Support Team at 781-228-2222, option 4 or email ichra@hsainsurance.com.