Health Reimbursement Arrangement

The Qualified Small Employer HRA is for employers with fewer than 50 employees that do not offer a group health plan including any other HRA or Health Flexible Spending account (FSA), Limited Health Care FSA and plans that only provide excepted benefits like dental, vision, etc. It allows you to reimburse employees who purchase individual (non-group) health insurance on the individual market, as well as eligible out-of-pocket medical, dental and vision benefits. You set the amount you are willing to provide for your employees up to the annual maximum allowed.

This HRA allows for employers to integrate an HRA benefit with an employer- sponsored group health plan and reduce or eliminate the employee’s out-of-pocket expenses associated with the group health plan.

The EBHRA only pays “excepted benefits” that are not integrated with health coverage, however the employer must offer a group health plan. This would include dental, vision and several types of supplemental insurance premiums, as well as any eligible medical expense related to those policies. The employer decides the amount of the benefit (up to the allowed maximum set by federal regulations), employee eligibility and types of expenses to reimburse in order to create the written plan documents.

Individual Coverage HRA allows employers to offer group health coverage or the ICHRA to reimburse for individual health insurance and/or out-of-pocket medical expenses, but they cannot offer employees in the same class a choice between the ICHRA and group health coverage. Employers can set up to 11 classes of employees.