Short-term health insurance generally does not satisfy the coverage requirements needed for tax-free QSEHRA reimbursements or participation in an ICHRA.
Does short-term insurance qualify for QSEHRA reimbursement?
No. To receive tax-free reimbursements through a QSEHRA, employees must maintain Minimum Essential Coverage (MEC).
Short-term health insurance is not considered Minimum Essential Coverage.
As a result, employees covered only by a short-term plan are generally not eligible for tax-free QSEHRA reimbursements.
Does short-term insurance satisfy ICHRA requirements?
No. Employees participating in an ICHRA must maintain qualifying individual health insurance coverage.
Short-term health insurance does not qualify as individual health insurance coverage for ICHRA purposes.
What types of plans generally qualify?
Examples may include:
ACA Marketplace plans
Off-exchange individual major medical plans
Medicare (when permitted under plan rules)
Eligibility depends on the type of HRA and individual circumstances.
What should I do if I only have short-term coverage?
If you participate in a QSEHRA or ICHRA, consider enrolling in qualifying individual health insurance coverage to ensure compliance with plan requirements and maximize available tax benefits.
Key takeaway
Short-term health insurance does not qualify as Minimum Essential Coverage and generally cannot be used to satisfy QSEHRA or ICHRA coverage requirements.