QSEHRA vs. ICHRA: Two HRAs, Two Different Businesses
Both reimburse individual coverage tax-free. Size caps, class rules, and which fits which employer.
Both arrangements let an employer reimburse employees tax-free for individual health coverage. The QSEHRA came first, built for small employers with annual reimbursement caps set by the IRS; the ICHRA removed the caps and added employee classes.
The decision line
Under 50 employees and want simple? A QSEHRA's flat structure and modest caps may be all you need — no group plan allowed alongside it, everyone treated uniformly.
Want to vary allowances by employee class — full-time versus part-time, by location, seasonal — or exceed QSEHRA caps? That's the ICHRA's entire design. It also scales to any company size, which the QSEHRA legally can't.
Shared fine print
Both require employees to hold qualifying individual coverage, both interact with premium tax credits (an affordable offer displaces the subsidy), and both live or die on clean administration. Use a proper administrator; a shoebox of receipts is how tax-free becomes taxable.
Educational content, not legal, tax, or benefits advice. FindGroupHealth.com is not affiliated with HealthCare.gov or CMS. Legislation statuses reflect the last-updated date above; see the official Congress.gov record for real-time status.