Getting Health Insurance Coverage - My Head is Spinning, Where Do I Start?

If you have recently started a position with a new employer, you’re probably learning about the different benefits that you’ve been hired with. Many household employers who do not offer group health coverage for their employees help pay for medical expenses through a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA). When you negotiate this benefit with your new employer,  it will help pay your health care costs for qualifying health insurance coverage. If you have never worked with a QSEHRA before, we’ll break down the important must-knows here.

A negotiated, tax advantaged health insurance benefit stretches dollars and is a win-win for the household employer and nanny or other household employee.

How does it work?

First, your employer will let you know what your QSEHRA dollar amount is per month or per year that they will reimburse.  Or you can call our office and have a client care representative walk you through how to transform that $20 an hour offer to be somewhat less per hour but include this tax free benefit. See how the math works here.

Once you and your employer have negotiated the QSEHRA benefit amount you can put it towards health care expenses with any qualifying health insurance that meets the Affordable Care Act requirement for coverage. Remember this is a reimbursement plan, you pay for your qualified expense first, submit a simple claim to your employer or their designated administrator, and you are reimbursed.

Tip: If you are not changing jobs but are due for a wage increase, considers swapping the increase for the QSEHRA benefit. You save on taxes and your employer does too!

What health care coverage qualifies with a QSEHRA?

There are several options for health care coverage for the household employee with QSEHRA. Some of these options include:

• Any health plan that is purchased through the Health Insurance Marketplace
• “Grandfathered” individual insurance plans that you’ve used since March 23, 2010

Some products that assist in paying for medical services will not qualify, including coverage only for dental or vision care, workers compensation, plans that offer only medical service discounts, or medical coverage for a specific condition or disease.

What can you use your QSEHRA money for?

You can use your monthly QSEHRA dollar amount for incurred medical expenses, including health insurance premiums, out-of-pocket medical costs, prescriptions, and more.

If you are a regular, full-time employee, you are eligible for a QSEHRA. However, your employer is allowed to exclude other types of employees from the coverage, including part-time employees, those that work only seasonally, or those that have been employed with them less than 90 days.

We understand that the innerworkings of tax compliance and health care can get overwhelming and confusing. That’s where our experienced team of specialists at HomeWork Solutions can step in to help. Contact us today for information on how we can assist you. 

Resources:

Tax Advantaged Health Insurance Options for Household Employees

Outsource QSEHRA Administration with Take Command Health

Illustration of Tax Savings