Benafica is a health benefits and insurance company that helps employers offer flexible, tax-free health reimbursement plans instead of traditional group health insurance.

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QSEHRA

QSEHRA Administration for Small Employers

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An affordable, flexible health benefit option for companies with fewer than 50 full-time employees.

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QSEHRA vs. ICHRA
QSEHRA Overview

What is a QSEHRA?

QSEHRA stands for Qualified Small Employer Health Reimbursement Arrangement. It’s an alternative to traditional group health plans that lets small businesses reimburse employees for individual health insurance premiums and eligible medical expenses.

  • Fewer than 50 full-time employees (FTEs).
  • No group health plan allowed.
  • At least one W-2 employee.
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Need more flexibility as you grow?

ICHRA works for employers of any size, with allowances by employee class and no contribution limits.

Explore ICHRA
IRS Limits

2026 QSEHRA Contribution Limits

For the 2027 plan year, employers can offer up to:

$6,700

for individual employees ($558.33 per month)

$13,550

for employee + family ($1,129.17 per month)

Comparison Chart

QSEHRA vs. ICHRA

Not sure which HRA is right for you? QSEHRA and ICHRA have different eligibility requirements, contribution limits, and flexibility. Use the chart below to compare your options.

QSEHRA ICHRA
Employer size Less than 50 FTEs Any size
Contribution limits $6,450 / $13,100 (2026) None
Employee classes? No, same terms for all eligible employees 11 employee classes
Allowance may vary by Family status, age (benchmark method) Class, age, family size
Can run alongside a group plan? No Yes, to different classes
Spouse's group plan works? Yes No
Premium tax credit effect Reduces PTC dollar-for-dollar; an affordable QSEHRA disqualifies Affordable ICHRA disqualifies; if unaffordable the employee may opt out and take the PTC
Best for: Small employers wanting a simple, defined benefit Employers controlling budget across a mixed workforce
Setting Up a QSEHRA

How Does a QSEHRA Work?

Our dedicated QSEHRA platform helps you handle most of the steps along the way, from employee enrollment and coverage verification to reimbursement claims, payments, notices, and ongoing compliance.

Confirm You’re Eligible

Have fewer than 50 FTEs, no group health plan, and at least one W-2 employee.

Choose the Allowance

Set a monthly reimbursement amount for eligible employees, up to the annual IRS limit.

Employees Purchase Coverage

Employees choose and purchase an individual health plan that works for them and their families.

Submit & Get Reimbursed

Employees submit eligible expenses through our platform. Once approved, they receive tax-free reimbursement from their employer.

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QSEHRA Administration

We Make QSEHRA Easy

From plan setup to employee reimbursements, we handle the details of QSEHRA administration so you can focus on your business.

Benafica Handles:

  • Plan design and documents
  • The required employee notice
  • Employee onboarding and questions
  • Substantiation and expense review
  • Reimbursement processing
  • Year-end W-2 reporting amounts
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Available in all 50 States

QSEHRA is a federal arrangement, so employers can offer it wherever their team lives and works.

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FAQ

QSEHRA Frequently Asked Questions

Employers with fewer than 50 full-time equivalent employees that do not offer a group health plan or certain other employer-sponsored coverage can offer a QSEHRA.

No. An employer can generally establish a QSEHRA even if it has only one eligible employee.

Yes, but QSEHRA generally must be offered on the same terms to eligible full-time and part-time employees. However, you can structure the reimbursement amount to vary based on permitted factors, such as age and family size.

A QSEHRA can reimburse eligible health insurance premiums and qualified medical expenses, including deductibles, copays, prescriptions, dental and vision expenses, and other Section 213(d) medical expenses (if you so choose).

To receive tax-free QSEHRA reimbursements, employees must have minimum essential coverage (MEC). This can include individual health insurance, Marketplace coverage, Medicare, or coverage through a spouse’s employer-sponsored group health plan.

You only reimburse the amount the employee actually pays for an eligible expense. Unclaimed money stays with the business.

No. To offer a QSEHRA, an employer must not offer a group health plan or certain other employer-sponsored health benefits.

No. A QSEHRA is not subject to COBRA. When an employee leaves the company, their QSEHRA reimbursement ends, but they keep their individual health insurance policy. The coverage belongs to the employee, not the employer, so they can continue the policy on their own (or through a spouse’s plan, if applicable).

A QSEHRA can reduce the amount of premium tax credit an employee is eligible to receive. The impact depends on the employee’s QSEHRA allowance and household income. Employees need to report any QSEHRA offerings so tax credits can be adjusted.

Yes. The plan year doesn’t have to run January to December, and plenty of employers launch off-cycle. Two things follow: allowances are prorated for the remaining months, and the 90-day notice becomes a scheduling constraint rather than a formality — you need to be planning roughly a quarter ahead of your intended start date.

On the Blog

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Lets Build Your Benefits

Tell us a little about your team. We’ll put together ICHRA and QSEHRA options that fit your budget.

  • We review your details
    A benefits specialist looks at your team and current plan.
  • We build your model
    Allowance options and costs, tailored to your classes.
  • We walk you through it
    A short call to answer questions and plan next steps.