Qualified Small Employer Health Reimbursement Arrangement (QSEHRA)

A QSEHRA is a health benefit that can be offered to employees of small businesses with less than 50 employees.  The plan allows a company to reimburse the employee tax-free for their personal health care expenses, including health insurance premiums.  The QSEHRA is an employer-funded, tax-free monthly allowance.  The arrangement was created by the 21st Century Cures Act which went into effect January 1, 2017.  Reimbursements are free of payroll taxes and income tax for employees, too if the employee is covered by a policy providing minimum essential coverage (MEC) as defined in the Affordable Care Act (ACA).

For the tax year 2019, the maximum amount of payments and reimbursements for the year must be no greater than $5,150 ($10,450 for family coverage).  The 2018 limits are $5,050 ($10,250 for family coverage) for 2018.


Cathy Fisher

Common Cents Bookkeeping and Tax Preparation

Serving Henderson, NC, Buncombe County, Polk County, Transylvania County


P: 828-595-2835

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