QSEHRA: A Low Cost, Low Admin Way to Offer Health Benefits as a Startup

TL;DR: If you're a small startup that is not offering group health insurance, a QSEHRA (Qualified Small Employer Health Reimbursement Arrangement) lets you reimburse employees (pre-tax!) for individual premiums and medical expenses.

What exactly is a QSEHRA?

QSEHRA is a health benefit option for small employers (fewer than 50 full-time employees) that don’t offer group coverage. Instead of managing a health plan, you reimburse employees for their own health insurance and qualified medical expenses.

These reimbursements are:

• Tax-free for employees (as long as they have qualifying coverage)

• Tax-deductible for the company

QSEHRA contribution limits are adjusted annually by the IRS. For reference, in 2026 the max was:

• $6,450/year for individuals

• $13,100/year for families

When QSEHRA Makes Sense

1. You want to offer real benefits without the admin burden. Group plans are expensive and complex to manage. QSEHRA lets you offer meaningful, flexible health benefits with minimal overhead.

2. You want to stay competitive in hiring. Even a $300/month health benefit can make your offer more attractive. It signals you care about employee well-being without breaking your budget.

3. You don’t offer group insurance. QSEHRAs are specifically designed for small teams without a traditional health plan. You must not offer group coverage to use this benefit.

How do employees use it?

Employees need to:

• Have Minimum Essential Coverage (MEC), like Marketplace insurance, Medicare, or coverage through a spouse.

• Submit proof of coverage and eligible expenses for reimbursement.

• Receive reimbursements from the QSEHRA provider

• If using Marketplace insurance, they’ll qualify for a Special Enrollment Period when the QSEHRA starts.

What’s the Cost?

Depending on the QSEHRA provider you choose to work with, the costs of reimbursements and platform fees can vary. For example, working with a provider like TakeCommand will cost your company $20/employee/month along with a $40 monthly platform fee. Meanwhile, if you choose to use Salusion as a provider, QSEHRA will cost $14/employee/month with no platform fee.

It’s also important to note that providers like Salusion can handle teams as small as 1 person while other providers have a higher minimum employee requirement.

Bottom Line

QSEHRA is a great option for startups who want a simple and affordable way to offer their employees health benefits. It allows you to reimburse your employees pre-tax for their own insurance and medical costs. Not only is it cheaper than a traditional benefits plan, but it also takes less admin to run.

Want recommendations on which QSEHRA provider to use? Reply here and we can help.