Unlike an FSA or HSA, a QSEHRA is funded entirely by the employer — the employee contributes nothing, and reimbursement can cover individual-market insurance premiums, not just out-of-pocket costs.
How it works
Reimbursement is capped at the lesser of the employer’s own set allowance or the IRS’s annual maximum. Whatever expenses exceed that effective limit remain unreimbursed.
What this does not include
QSEHRAs are limited to small employers (fewer than 50 employees) who don’t offer a group health plan — a different structure from a standard HRA, which larger employers with group plans can offer under different rules this calculator doesn’t model.
How to use this calculator
- Enter total premiums and medical expenses for the year.
- Enter the employer’s allowance and the current-year IRS cap.
Frequently asked questions
Does the employee pay tax on reimbursements?
No — per HealthCare.gov, QSEHRA reimbursements are tax-free to the employee, similar to how FSA and HSA distributions for qualified expenses work.
Can a QSEHRA reimburse insurance premiums?
Yes — unlike a standard FSA, a QSEHRA can reimburse individual-market health insurance premiums in addition to out-of-pocket medical expenses.
Why is there a small-employer size limit?
QSEHRAs were specifically created to let small businesses that can’t offer a traditional group health plan still provide a tax-free health benefit — larger employers use different HRA structures.
