Employers set up HRA reimbursements through payroll by taking the monthly reimbursement amount from Take Command’s reimbursement statement and adding it as a recurring, non-taxable payroll item for each eligible employee.
As the business owner or plan administrator, you have flexibility in how reimbursements are handled—and ultimately, you make the final decision.
Remember, the tax-free nature of a QSEHRA or ICHRA depends on:
Having compliant plan documents in place
Maintaining ongoing compliance
Completing proper year-end W-2 reporting
What does Take Command do and what does the employer do?
Take Command manages HRA administration and compliance requirements. Take Command does not handle funds but provides tools to manage claims and maintain records.
Take Command:
Tracks employee claims
Reviews reimbursement eligibility
Provides monthly Reimbursement Statements
Calculates approved reimbursement amounts
Supports required HRA documentation
The employer:
Reviews the monthly Reimbursement Statement
Processes reimbursements through payroll or another payment method
Maintains payroll records
Completes required year-end reporting 👉 Learn more: Reimbursement Statement - Ensures that reimbursement amounts do not exceed the monthly allowance.
Reimbursement Methods
Getting funds to employees is the final step. Common methods include:
Reimburse through your payroll system (recommended)
Write a check
Pay cash
Use PayPal or another transfer service
We strongly recommend using your payroll system because it:
Simplifies tracking
Enables direct deposit
Automates recurring reimbursements
Reduces administrative work
General Instructions for HRA + Payroll
Depending on your payroll provider, you may need assistance from your payroll administrator.
How the reimbursement process works:
Employees submit reimbursement requests through Take Command.
Take Command reviews and approves eligible reimbursements.
Take Command generates a monthly Reimbursement Statement.
The employer reimburses approved amounts through payroll.
Important: Take Command does not automatically sync reimbursement data to your payroll system. Each month you must log in to the Admin Portal, download the Reimbursement Statement, and manually enter the approved amounts into your payroll provider.
👉 Admin portal access: https://admin.takecommandhealth.com/
If the Reimbursements tab or Reports section is not visible in your Admin Portal, contact Customer Experience (CX) — this may indicate a portal access or account configuration issue. Additionally, some employers may restrict claim submissions to specific days, such as the first of each month. Check your company’s reimbursement schedule for details.
These statements include:
Employee allowance amounts
Carryover balances
Approved reimbursement totals
Tax-Free Reimbursements (ICHRA & QSEHRA)
Most reimbursements under ICHRA and QSEHRA are tax-free, meaning:
They are excluded from employee gross income
They are not subject to payroll taxes
They do not appear as taxable wages
Key reporting rules
QSEHRA only:
Report the annual allowance offered (not reimbursed amount)
Include in Form W-2, Box 12, Code FF
ICHRA:
No specific W-2 reporting requirement
👉 IRS overview: https://www.irs.gov/affordable-care-act
How to Set Up Tax-Free Reimbursements
Follow these steps to set up tax-free reimbursements in your payroll system:
Open or edit your employee’s pay profile
Add a recurring, non-taxable reimbursement or expense type
Enter the amount from the Take Command Health Reimbursement Statement
Be sure to verify the accuracy of the amount to maintain employee privacy and ensure compliance
Save or schedule the change for the next pay run
Most payroll systems will carry that amount forward each month. For example, if you added a $200/mo reimbursement for an employee, the recurring settings should carry that forward so that the employee will get the same $200/mo until changed. That means you'll only need to make adjustments when there is a change. This makes it super easy for premium-only HRAs, as the amounts will not change very often and can roll forward. For HRAs that include medical expenses, you'll need to make a quick edit each month beforehand if the amount is different. To help, you can choose the day of the month you'd like Take Command Health to deliver the
Reimbursement Statement so that you have time to make these changes before a pay run (In the admin settings, under Reimbursements, you can change the day of the month for the Reimbursement Statement). Take Command also allows for flexible reimbursement cadences such as semi-monthly or bi-weekly in addition to the default monthly cadence. This flexibility helps align with various payroll schedules and ensures timely reimbursements for employees.
Taxable Reimbursements (QSEHRA Only)
While most QSEHRA reimbursements are tax-free, certain exceptions require taxable treatment.
When reimbursements become taxable
A reimbursement must be taxed if:
The premium was paid pre-tax through a spouse’s employer-sponsored plan
This rule exists to prevent double tax advantages, which are prohibited by the IRS.
👉 Learn more: https://www.irs.gov/affordable-care-act
While most reimbursements through QSEHRA are tax-free, there are a few types of allowable reimbursements that must be taxed. Under IRS rules, group plan premiums paid pre-tax through a spouse's employer cannot also qualify for tax-free QSEHRA reimbursement, avoiding double benefits. To qualify for tax-free reimbursement, you must demonstrate the premium was paid post-tax, which is rare.
Taxable reimbursements are reported as income and taxed like regular Wages with income & payroll taxes withheld. You can usually enter this as an "Additional Income" or "Other Earnings" line item but check with your payroll company on the best way to categorize it. The only taxable reimbursements through QSEHRA include premiums paid pre-tax through a spouse's employer for a group plan. Your employer has the option to allow taxable reimbursements in these instances, based on company discretion.
Correcting Tax Classification Errors
Mistakes occasionally happen, but corrections are simple within Take Command: If errors occur, Take Command will notify you via email with instructions for correction.
Navigate to Employee Reimbursements
Select the relevant employee and month
Adjust:
"Tax-Free" and "Taxable" fields reflect the correct amounts.
Save changes
Updates will automatically flow into your reporting and payroll exports.
Note: You can choose whether or not to allow for these taxable reimbursements through your QSEHRA- if you're not sure if you allow these or not, just reach out to us and we can let you know! Additionally, the Take Command admin portal allows you to manage and adjust taxable versus non-taxable reimbursements efficiently. Employers can also use the "Submit Expense" option in the portal to upload documentation for missed reimbursement periods.
Verifying Eligible Expenses (ICHRA)
Eligibility depends on the employee’s insurance plan, not just the expense type.
To verify coverage:
Review the employee’s policy
Check plan documentation
Confirm whether the expense is included
For example:
A Direct Primary Care (DPC) membership may or may not qualify
It depends entirely on the policy’s terms
👉 Resource: https://www.takecommandhealth.com/blog Terminated employees retain portal access for 90 days to submit eligible expenses incurred during their employment. After 90 days, they are moved to the "Former" section.
Year-End W-2 Reporting (QSEHRA Only)
At year end:
Report the amount offered (not reimbursed)
Enter in:
Box 12, Code FF
👉 W-2 instructions: https://www.irs.gov/forms-pubs/about-form-w-2
👉 W-2 instructions: W-2 Reporting: Where & How do I report QSEHRA reimbursements on my employees’ W-2? | Take Command Help Center
Important:
This is not the reimbursed amount
It reflects what the employee was eligible to receive
Coordinate with:
Your CPA
Your payroll provider
Some systems allow automated coding, while others require manual entry.
Specific Providers
Ok, so those are the general instructions that should work for most payroll providers (again, you may need to ask someone at the payroll firm you use to help or share these instructions).
Payroll Provider Instructions
ADP Run
Use:
“Employer Paid Individual Coverage HRA”
Or similar employer healthcare categories
Gusto
Paycom
Paychex
CSV Uploads & Payroll Integration
Take Command simplifies payroll coordination by providing:
Downloadable CSV reimbursement files
Pre-formatted data for payroll imports
Clear distinction between:
Tax-free reimbursements
Taxable reimbursements
This reduces manual entry errors and speeds up payroll processing.
Aligning reimbursement reports with biweekly or semi-monthly payroll
If your company runs payroll more frequently than monthly, you have two approaches:
Match your reimbursement schedule to your payroll cycle. Change your statement frequency to bi-weekly or semi-monthly in the Admin Portal (Reimbursements → Update → select frequency). A report will generate before each payroll run, giving you the approved amounts to enter for that period. See HRA Employer: Changing Your Reimbursement Statement Date or Frequency for step-by-step instructions.
Keep monthly reports and designate one payroll run. Set your monthly statement date a few days before the payroll run you plan to use for reimbursements. Download the report when it generates and enter the approved amounts into that payroll run as a one-time or recurring item.
Whichever approach you choose, set your statement date so the report arrives before your payroll processing deadline — this gives you time to download and enter amounts before the run closes.
Claim timing: claims approved after your report generates will appear on the next report, not the current one. Always download and review your statement after it generates — not before — to capture all approved amounts for that period.
Summary
Using payroll for HRA reimbursements is the most efficient and compliant method because it:
Ensures accurate documentation
Aligns with existing payment systems
Supports automation and scalability
Simplifies tax and audit processes
With Take Command Health:
Compliance is built into the system
Reimbursements are tracked and verified
Payroll integration is streamlined