Economic uncertainties caused by newly imposed tariffs and rising costs are putting pressure on small businesses far and wide to cut costs. While it’s important to carefully evaluate your company’s finances, it’s never a good idea to cut your employee health insurance plan altogether.
Instead, a QSEHRA serves as a simple, cost-effective way to support your team—without locking your business into expensive group plans.
Not only are they tax-advantaged and predictable, but they’re also tailor-made for small businesses.
Let’s take a look at how they work, and why there’s no better time to explore this option.
What is a QSEHRA?
A QSEHRA (Qualified Small Employer Health Reimbursement Arrangement) is an alternative to traditional group health insurance designed specifically for businesses with fewer than 50 full-time employees.
Instead of paying for a group policy, your employee chooses their own individual coverage health plan, and you reimburse them for premiums and other qualified out-of-pocket medical expenses. QSEHRAs stand as a straightforward way to offer health coverage without the high costs often associated with traditional insurance plans.
QSEHRA vs. ICHRA: What’s the Difference?
In addition to a QSEHRA, ICHRAs (Individual Coverage Health Reimbursement Arrangements) are a similar cost-effective and tax-deductible employee healthcare alternative. While they both function in a similar way, they serve slightly different purposes:
- A QSEHRA is limited to employers with fewer than 50 full-time employees and have capped annual reimbursement limits.
- ICHRAs can be used by businesses of any size and allow different reimbursement amounts for different types of employees.
For small business owners looking for a simple, compliant, and affordable benefit option, a QSEHRA is are often the best fit.
How Tariffs Can Drive Up Traditional Insurance Costs
Recent tariffs have raised costs across industries. This is especially true for those importing things like steel, electronics, and medical equipment. For many small businesses, these cost hikes result in tighter margins and more careful financial planning.
What’s often overlooked though is the impact that these tariffs can indirectly have on health insurance premiums.
Here’s how it works: when certain goods such as medical supplies, pharmaceuticals, and hospital equipment become more expensive because of the tariffs, the cost increase is passed down to healthcare providers and insurance companies. Since healthcare providers and insurers are forced to catch up with the rising costs, the average cost of group health insurance premiums also tend to increase, especially for small businesses that don’t have much bargaining power.
Instead of absorbing those rising costs, small businesses should consider QSEHRAs to provide employees with flexible, affordable coverage—without committing to a traditional group plan that may keep getting more expensive.
Why QSEHRAs Make Sense Right Now
- Predictable Costs for You, Personalized Options for Them
With QSEHRAs, you set your reimbursement limit—no surprises, no sudden rate increases. Your employees also get to choose the coverage that works best for them, while you control the budget. - Tax-Free Reimbursements
Reimbursements for eligible expenses are tax-free for both you and your employees, making a QSEHRA a financially smart option for both sides. - Easy to Administer
QSEHRAs don’t come with the administrative headache of traditional group plans since there are no group renewals or complex paperwork. - Helps You Stay Competitive
In a competitive job market, offering any kind of health benefit can make a big difference. A QSEHRA allow you to support your employees and stay competitive without breaking the bank.
Explore Small Business Health Options with EZ
If you’re trying to save on healthcare costs, don’t get rid of your team’s health benefits entirely. Instead, consider cost-friendly alternatives to traditional insurance, like QSEHRAs! They provide a powerful middle ground where you can control the costs and employees still receive quality, essential health benefits.
At EZ.Insure, we help small business owners explore all their options when it comes to employee health benefits. Whether you’re looking into s QSEHRA, an ICHRA, or even another traditional coverage option, we’ll help you find the plan that fits your team and your budget. We offer free, no-obligation quotes, side-by-side plan comparisons, and 24/7 assistance from licensed insurance agents!
To get started today simply enter your ZIP code below, or give us a call at (844)-770-0064
