5 steps for successfully communicating with your employees about the QSEHRA

If you’re an employer offering the qualified small employer health reimbursement arrangement (QSEHRA), it may be challenging to clearly explain how this health benefit works to your newly eligible employees. While you may understand how cost-effective and flexible it is, you may not be able to effectively communicate the details and benefits of the QSEHRA to employees who are new to the benefit.

Before you start reimbursing your employees for health insurance premiums and other health costs, you need to ensure they fully understand the benefit so they can utilize it. That's why it's important to have a clear and concise communication strategy.

In this article, we'll go over how you can easily talk to your employees about the QSEHRA so you can maximize its value for your organization.

What is a QSEHA?

A QSEHRA is a formal employer-funded health benefit that enables employers to reimburse their employees for any incurred healthcare costs—up to a defined allowance amount. Eligible employers must have fewer than 50 full-time equivalent employees (FTEs) to participate and must not be offering a group health plan. All full-time W-2 employees are eligible automatically, and you have the option to include your W-2 part-time employees. You can also choose to exclude certain types of employees, such as seasonal employees. But if you want to include them, they must receive the same monthly allowance as your full-time employees.

With the QSEHRA, you can reimburse your eligible employees for more than 200 medical expenses, including their individual health insurance premiums. QSEHRA reimbursements for eligible expenses are on a tax-free basis for the organization and its employees, as long as employees have health insurance plans with minimum essential coverage (MEC).

What are the benefits of a QSEHRA?

The QSEHRA is a small business owner's best defense against the rising cost of health insurance. Based on data from KFF¹, the average annual premiums for employer-sponsored health insurance in 2023 were $8,435 for single coverage and $23,968 for family coverage. These figures represent a 7% increase compared to 2022.

Using a QSEHRA instead of a traditional group health plan allows you to avoid budget surprises and rate increases by allowing you to define a reimbursement allowance for your employees that works for you. Plus, any unused amounts stay with you at the end of the year. A QSEHRA also lets you skip the complicated quoting process and participation requirements that come with a health insurance company.

A QSEHA benefits your workers by allowing them to choose the individual health insurance coverage that suits them best instead of sticking them with a one-size-fits-all health insurance policy. When employees can choose their health insurance carrier, they have more control over their doctors, coverage, and premiums.

How to communicate with your employees about the QSEHRA

How can you ensure your employees understand and take advantage of this valuable benefit? Make sure you explain it properly. To ensure effective communication about the QSEHRA, follow these five steps below.

1. Start with education

Before you talk to your employees about the QSEHRA, educate yourself on all the details and regulations surrounding this benefit. Familiarize yourself with the eligibility requirements, eligible medical expenses, health coverage options, and annual limits on employer contributions. This will help you answer any questions your employees may have and provide accurate information.

If you offer your QSEHRA through PeopleKeep, we’re happy to explain the ins and outs of the benefit. Our online help center has helpful information for you and your employees. Plus, you can always reach out to our support team with any questions.

2. Craft clear and concise messages

When communicating about the QSEHRA, it's important to use clear and concise language that is easily understandable for all employees. Avoid using technical jargon or complex terms that might confuse or overwhelm them. Break down the information into simple steps and highlight the key benefits of the QSEHRA.

Here are some important points to touch on:

• Define the QSEHRA
• Explain why you're making the switch or offering benefits for the first time
• Explain how the QSEHRA works for employees
• Provide the monthly reimbursement limit you set
• Explain how to submit proof of payment for medical costs and other eligible health expenses
• Explain how employees can purchase their own health coverage on the federal Health Insurance Marketplace or state exchanges. You should also mention that your employees have a 60-day special enrollment period to purchase health coverage after you offer them a QSEHRA
• Provide the start date for the QSEHRA

People also absorb information differently, so you want to use multiple communication channels to reach all employees effectively. Send out informative emails, post updates on the company intranet or bulletin boards, and hold informational sessions or webinars. Consider creating visual aids, such as infographics or explainer videos, to enhance their understanding.

If you use PeopleKeep to administer your QSEHRA, we’ll send your eligible employees an email about their new benefits once you add them to the benefit. But it’s a good idea to mention it beforehand.

3. Provide personalized assistance

Each employee may have unique questions or concerns about the QSEHRA. Encourage open communication by creating opportunities for employees to ask questions and seek clarification. Offer one-on-one meetings or office hours where employees can discuss their specific situations and receive personalized assistance. This will help build trust and ensure that employees feel supported in utilizing the benefit.

If your employees have any questions about their QSEHRA after you offer the benefit, they can always get help from PeopleKeep’s customer support team right from their online dashboard.

4. Show employees where to purchase individual policies

If your employees are accustomed to an employer group health plan, the idea of buying their own individual insurance policy on the Health Insurance Marketplace may seem daunting. Ease them through this transition by pointing them toward resources that will help them choose an appropriate Marketplace plan.

Keep in mind that federal mandates prohibit employers from getting involved in the decision-making process. You can give your employees information, but you can't help them weigh their health plan options.

5. Regularly reinforce and update information

Communicating about the QSEHRA shouldn’t be a one-time event. It's important to reinforce the information regularly to keep it fresh in employees' minds. Schedule periodic reminders, provide updates on any changes or enhancements to the benefit, and share success stories of employees who have used the QSEHRA to their advantage. This ongoing communication will create a culture of awareness and engagement.

The more engaged your workforce is with their QSEHRA, the more success you’ll see from it.

How to use the QSEHRA as a recruitment tool

On top of keeping your current employees happy, the QSEHRA is an effective recruitment tool when it comes to identifying and retaining top talent.

According to our 2022 Employee Benefits Survey Report, 82% of employees say that the benefits package an employer offers is an important factor in whether or not they accept a job. Additionally, 87% of employees value health benefits like health insurance.

However, not all prospective employees are familiar with the QSEHRA. Educate potential employees about the HRA and highlight what it has to offer. Offer them a letter that briefly explains how they'll receive reimbursement for their health insurance premiums and other medical care expenses.

How PeopleKeep can help

While it's possible to self-administer your QSEHRA, do you have the time for that? As a business owner, you have plenty of other responsibilities on your plate.

When you work with PeopleKeep, we review employee reimbursement requests so you can focus on running your business. We also take care of compliance requirements like plan documents and offer award-winning customer support. Our personalized benefits administration software makes it easy to set up and manage your QSEHRA in minutes each month.

Conclusion

Change can be challenging, and switching from a traditional group health plan to the QSEHRA is no exception. Talking to your employees about the QSEHRA is crucial for their understanding and utilization of this valuable benefit.

By following these five steps, you can help your employees make the most of their new health plan coverage. Effective communication will not only enhance employee satisfaction but also contribute to the overall success of your small business.

This blog article was originally published on April 11, 2017. It was last updated on December 20, 2023.

1. https://www.kff.org/report-section/ehbs-2023-summary-of-findings/