Introduced with the signing of the 21st Century Cures Act on December 13, 2016, the BASE® Qualified Small Employer Health Reimbursement Arrangement (QSE HRA) helps employers offer their employees a more attractive benefit package. This new legislation instituted an arrangement allowing employers to help their employees pay for medical coverage for themselves and their families, tax-free. The employees can use the money for insurance premiums, co-pays, deductibles, eye care, dental care, or any other qualified health care expense. The amount provided is tax-free to the employees and 100% tax deductible to the employer. With a QSE HRA, employees have the ability to secure their own medical insurance either on or off the Marketplace.
Additional regulations were recently introduced by the IRS with Notice 2017-67. Few significant changes for the QSE HRA are in store; the Notice includes proposed regulations providing more defined guidelines with a request for feedback by January 19, 2018. In the meantime, these new regulations took effect on November 20, 2017. Failure to comply could result in a $100 per employee, per day penalty.
So what is in store for the QSE HRA in 2018?
Statutory Dollar Limits increased to $5,050 self-only/$10,250 family
- Must provide proof of Minimum Essential Coverage (MEC)
- Written Notices must be distributed 90 days prior to every plan year or on/before first day of eligibility while including eligibility date and limits
- Offered on same terms to all employees
Some other requirements mentioned in Notice 2017-67 regarding the QSE HRA for 2018 are Substantiation Requirement, Coordination with Premium Tax Credits, Failure to Satisfy the Requirements to be a QSE HRA, Interaction with HSA Requirements, and Effective Date.
To learn more about the NEW QSE HRA Notice 2017-67, click the link to read the full notice, or call 1-888-386-9680 and let BASE® help you fully understand what is in store for the QSE HRA in 2018.