QSEHRA for Small Businesses—Why It Works (And When It Doesn’t)

If you’re a small employer without a group plan, QSEHRA might sound like a dream—but it’s not as “set it and forget it” as some think. Here’s what QSEHRA is, how it works, and what to avoid.

What it is: A reimbursement model that allows employers with fewer than 50 full-time employees to give employees tax-free money to buy their own individual health insurance.

Common uses:

• Reimbursing premiums and qualified medical expenses

• Helping employees afford ACA-compliant individual plans when group coverage is too expensive

• Providing a lightweight alternative to a full group plan

  
  

What people get wrong:

• Assuming QSEHRA funds can be given to everyone—they can’t go to employees already receiving premium tax credits unless coordinated properly.

• Skipping the written notice requirement—QSEHRAs legally require employee notice every year.

• Treating it like a “set it and forget it” benefit. It still requires strategy and oversight.

  
  

Final Thoughts: QSEHRA Works—When It’s Supported

QSEHRAs can be a game-changing tool for small businesses—but they’re not plug-and-play. Without clear communication, compliance support, and ongoing education, they can create more confusion than clarity.

At S+H Benefit Solutions, we help small employers use QSEHRAs the right way—so employees feel empowered, not lost.

Want to know if a QSEHRA is right for your team—or how to fix one that isn’t working?

Let’s talk.