Key Deadlines, Procedures, and Flexibility Options for Managing QSEHRA Reimbursement Plans
When managing a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA), adhering to key deadlines and understanding the options for updates and administrative procedures are crucial. This guide provides an overview of relevant timelines, processes, and flexibility options.
Deadlines for QSEHRA Administration
Updating Participant Eligibility and Reimbursement Amounts - The deadline is at least 90 days before the start of the new plan year to confirm or update participant eligibility and reimbursement amounts. Written notice must also be sent to eligible employees within this timeframe.
Finalizing Reimbursement Amounts - QSEHRA reimbursement amounts for a plan year, especially for a January 1 start, are typically finalized by mid-September to meet the required 90-day employee notice period.
Submission of Proof of Minimum Essential Coverage (MEC) - Proof of MEC must be provided by March 31 of the following year (e.g., March 31, 2026, for the 2025 plan year).
Employee Open Enrollment Deadlines - For continuous eligibility under QSEHRA, employees should enroll in a qualifying health plan by the applicable enrollment deadline. For marketplace plans, this typically falls by mid-December during the Open Enrollment period.
Flexibility in Managing QSEHRA Plans
Making Changes After Stated Deadlines - Organizations can modify QSEHRA allowance amounts even after the portal’s stated deadlines. To implement changes, provide the updated allowance amounts and document configurations (e.g., Adoption Agreement), and regenerate the updated plan documents as needed. - Though there is no hard cutoff to adjust reimbursement amounts, it is recommended to align updates with the employees’ open enrollment period to maintain consistency and compliance.
Plan Auto-Renewal and Modifications - If no changes are submitted by the renewal decision deadline, the QSEHRA plan automatically renews with the same settings as the current year. However, modifications or cancellations can still be made going forward.
Employee Notification and Agreement Requirements
Notification Period - Employers must provide a 90-day notice period to employees regarding updates in reimbursement rates and other changes to comply with IRS regulations.
Employee Signatures for Changed Reimbursement Amounts - Employee signatures are not required when QSEHRA reimbursement amounts are updated for a new plan year. Once changes are configured in the plan and reflected in the company documents, reimbursements can proceed with the new rates without collecting updated signatures. However, ensure compliance with the reporting requirements of the plan.
By adhering to these guidelines, employers can effectively manage their QSEHRA plans, ensuring compliance with deadlines and optimizing the flexibility offered within the program.