QSEHRA
The qualified small employer HRA: who may offer it, the 2026 limits, the 90-day notice and the proof-of-coverage rule.
A QSEHRA is for an eligible employer: one that is not an applicable large employer and does not offer a group health plan. It is funded by the employer alone, reimburses medical care once the employee has shown proof of coverage, and is offered on the same terms to every eligible employee — varying only with the price of individual coverage by age and family size.
Step 1: Check eligibility
No group health plan — HealthCare.gov counts a health FSA as one — and fewer than 50 full-time employees.
Step 2: Set the allowance
The same terms for every eligible employee, within the year's maximum.
Step 3: Give the written notice
To current employees 90 days before each plan year; to a new employee when they become eligible.
Step 4: Reimburse against proof
Reimburse only after proof of minimum essential coverage, so reimbursements stay tax-free.
Where this lesson's rules come from
The sources behind this lesson's requirements, by kind. Anything marked as a convention is ours, not the rule-maker's.
- Federal statute
- IRC §9831(d) (opens in a new tab)Qualified small employer health reimbursement arrangementsFree to read
- IRS guidance
- Rev. Proc. 2025-32, §4.15, §4.63 (opens in a new tab)2026 inflation adjustments: the health FSA limit and the QSEHRA maximumsPDF · Free to read
- Federal agency guidance
- HealthCare.gov — HRAs for small employers (QSEHRA) (opens in a new tab)QSEHRA: who can offer one, the 2026 limits and the 90-day noticeFree to read
The words this page teaches
Each links to its glossary definition, which also names the authority behind it and the components that render it.
- Qualified small employer HRAAn HRA for an employer that is not an ALE and offers no group health plan, reimbursing employees with their own minimum essential coverage, on the same terms for all — up to $6,450 self-only and $13,100 family for 2026, with written notice 90 days before the year
- Minimum essential coverageThe health coverage that satisfies the ACA — including an eligible employer-sponsored plan. An ALE must offer it to avoid the §4980H(a) payment, and California requires its residents to have it