You can design your QSEHRA to reimburse employees for their monthly premiums only, or to reimburse them for their monthly premiums + other eligible medical expenses. Remember that in order to claim tax-free reimbursements through a QSEHRA, the law requires the employee to have minimum essential coverage (MEC).
Here’s a summary table to help! You can download the table as a PDF too if you'd like.
Individual Insurance Plans
Normally, premiums are eligible for reimbursement under the QSEHRA when they are purchased on the individual level (ie. healthcare.gov or takecommandhealth.com). These premiums are paid with post tax money. Most of these plans will qualify as MEC (see below for exceptions).
Group Insurance Plans
If employees have coverage through a spouse's or parent's group plan, that premium is paid pre-tax and is not eligible for tax-free reimbursement. Premiums paid pre-tax can be reimbursed on a taxable basis, however, if the employer allows it. Note that only the portion of the group premium that is not paid for by the spouse’s company is eligible for reimbursement. Employees on their spouse's group health insurance plan do also have MEC, and they can also be reimbursed for additional medical expenses, if the employer chooses to include that in their plan.
Other Types of Medical Insurance Plans
A few other types of insurance to note are short-term plans and Christian sharing ministries. Short-term plans do not qualify as MEC and therefore do not qualify an employee for reimbursement through the QSEHRA.
Christian sharing ministries are a bit more complex. Since we're not licensed tax professionals, our official answer on whether these qualify as MEC is to "ask your CPA." The reality is it's a gray area in the new law. We currently allow our clients to use a sharing ministry with our QSEHRA platform and claim tax-free reimbursement, but the transactions will be "flagged" for review by your CPA. Most will approve, but we do that so we can be fully transparent and so if the IRS does come out and say we can't do that, you don't feel like we mislead you in any way. Here's an article we put together that explains more.
Regardless of whether your employee has individual insurance or is covered by a group plan, as long as they are covered by medical insurance that counts as MEC (i.e. not a short-term plan), they can be reimbursed for medical expenses if you choose to include that as part of your plan. It's up to you whether to include expenses! You may find that the majority of your employees have coverage through a group plan elsewhere and would benefit the most from expense reimbursement. Or, you may find that your budget only allows for a set premium reimbursement each month.