Business owners may be eligible to participate in an ICHRA or QSEHRA only if they are treated as W-2 employees of the business; self-employed owners, partners, and certain shareholders are not eligible.
Are business owners eligible for an ICHRA or QSEHRA?
Owner eligibility depends on how the owner is classified for payroll and tax purposes—not just ownership status.
Owners can participate if they are W-2 employees of the business
Owners cannot participate if they are self-employed without W-2 wages
Some ownership structures (like partnerships and certain S-corp shareholders) are not eligible for tax-free reimbursement
If the owner is not a W-2 employee, they are treated as a non-employee and are not eligible for HRA participation.
Who is not eligible in either QSEHRA or ICHRA?
The following individuals are generally not eligible to participate in either HRA type:
Self-employed individuals with no W-2 wages
Partners in a partnership
Individuals who are not treated as employees for payroll purposes
If the owner does not receive W-2 wages from the business, they cannot participate in either arrangement.
What if I own the company but also run payroll for myself?
If you receive W-2 wages from your business, you may be eligible depending on your business structure and HRA type.
What if I have multiple owners?
Each owner is evaluated individually based on whether they are a W-2 employee of the company.
Does ownership percentage alone determine eligibility?
No. Eligibility depends on tax classification and employee status, not ownership percentage by itself.