QSEHRA can reimburse IRS-qualified medical expenses and eligible health insurance premiums, but only if the expense meets IRS Section 213(d) rules and your employer’s plan allows that specific type of reimbursement.
What QSEHRA can reimburse
QSEHRA follows IRS Section 213(d) medical expense rules
QSEHRA reimbursements are limited to expenses that qualify as medical care under IRS Section 213(d). These include costs for diagnosing, treating, or preventing illness or injury.
Eligible expenses under a QSEHRA
1. Health insurance premiums
QSEHRA can reimburse premiums for:
Individual ACA Marketplace plans
Off-exchange individual health insurance plans
Medicare (in many cases)
COBRA coverage (if applicable under plan rules)
TRICARE or VA coverage (if premiums are paid out-of-pocket and plan allows)
Dental and vision insurance premiums (when separately purchased)
2. Medical care and services
Common reimbursable services include:
Doctor and specialist visits
Hospital and urgent care services
Surgery and inpatient care
Mental health counseling and therapy
Chiropractic care
Acupuncture (when medically necessary)
Lab work and diagnostic testing
Ambulance services
3. Prescription medications
Eligible prescription-related expenses include:
Prescription drugs prescribed by a licensed provider
Insulin and diabetes supplies
Some over-the-counter medications (if allowed under IRS rules and plan documentation)
4. Medical equipment and supplies
Examples include:
Crutches, braces, and orthopedic supports
Wheelchairs and mobility devices
Blood pressure monitors and glucose testing kits
Hearing aids
Contact lenses and prescription glasses
Durable medical equipment prescribed for treatment
5. Other IRS-qualified medical expenses
Additional eligible items may include:
Dental treatment (cleanings, fillings, orthodontics)
Vision exams and corrective lenses
Physical therapy and rehabilitation
Fertility treatments (if medically necessary and documented)
Transportation to receive medical care
Expenses that are NOT reimbursable
QSEHRA cannot reimburse non-medical or disallowed expenses
The following are not eligible:
Gym memberships or fitness programs (unless medically prescribed and explicitly allowed)
Cosmetic procedures (non-medical)
Health sharing ministry payments (not considered insurance premiums under IRS rules)
Life insurance premiums
Disability or loss-of-income insurance
General wellness items without medical purpose
Cash-bonus style “medical benefits” not tied to actual expenses
Key compliance rules
1. Expense must be incurred during eligibility
A medical expense is only reimbursable if:
It was incurred while the employee was eligible under the QSEHRA
The service date (not billing date) falls within eligibility period
2. Proof of expense is required
Employees must submit documentation showing:
Provider or merchant name
Date of service or purchase
Description of the medical service or product
Amount paid
Acceptable documents include receipts, invoices, Explanation of Benefits (EOBs), or insurance statements.
3. Minimum Essential Coverage (MEC) requirement applies
To receive tax-free reimbursements for premiums, employees must:
Be enrolled in a MEC-qualified health plan
Submit proof of coverage when required
Without MEC:
❌ Premium reimbursements may become taxable
❌ Certain reimbursements may be denied
4. Employer plan design may further restrict eligibility
Even if an expense is IRS-eligible:
Your employer may exclude certain categories (e.g., spouse group premiums or specific plan types)
Always defer to plan rules if they are more restrictive than IRS guidelines