Recent guidance issued by the IRS on qualified small employer HRAs (“QSEHRA”) answer many of the remaining questions about these relatively new arrangements. QSEHRAs allow small employers the ability to provide reimbursement for certain health expenses, including health insurance premiums. (Read our previous article)

IRS notice 2017-67 gives further guidance on how the arrangements should operate, including information on eligible employees, the notice requirements, substantiation requirements and more.

In addition, the Notice also reminds interested employers that there is a special transition deadline to establish a new QSEHRA for 2018, which is February 19, 2018. Typically, employers must notify employees of the new QSEHRA at least 90 days before the beginning of the new plan year. Arrangements not in place by this date must be set-up on a non-calendar year basis or be postponed until October 2018 for a 2019 start date.

While QSEHRAs can beneficial to both employers and their employees, administrative errors can be a bear to fix. Other details within Notice 2017-67 should also be considered. Nyhart’s Consumer Driven Healthcare administration team is able to assist in setting up such arrangements for your employees and/or clients. Please contact your Nyhart consultant for more information.