What is a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) and who can use it?

Introduced in 2016, the QSEHRA allows small employers with fewer than 50 full-time equivalent employees to fund individual HRA accounts for employees on a tax-free basis — no group health plan required. Employees purchase their own individual or ACA marketplace coverage and submit expenses for reimbursement. For 2025, the QSEHRA contribution limits are $6,350 for self-only coverage and $12,800 for family coverage. Employees receiving QSEHRA funds must reduce their ACA premium tax credits dollar-for-dollar by the QSEHRA amount, so coordination with marketplace subsidies requires careful planning.