The IRS just announced the 2025 QSEHRA limits! As you know, the Qualified Small Employer HRA allows small business owners to reimburse their employees for health premiums and qualified medical expenses. QSEHRA is available to companies with less than 50 full time equivalent employees and it has its limits in terms of monthly reimbursement rates. This post jumps into the 2025 QSEHRA reimbursement maximum for small businesses.
Updated with 2025 rates!
What is a QSEHRA Contribution Limit?
QSEHRA Contribution Limits, or QSEHRA reimbursement maximums are regulations that cap the amount that employers can reimburse their employees for health insurance.
All reimbursements are subject to annual maximums and become available to employees on a monthly basis. This means employees can’t take the full annual amount in January—instead, the funds become available to employees each month. Although if they do submit a medical expense that exceeds their reimbursement limits, they can be paid out on a monthly basis.
QSEHRA reimbursement maximums are tied to inflation, so we expect them to go up a little bit every year.
QSEHRA contribution limits
As a reminder, Qualified Small Employer HRAs (QSEHRAs, for short) allow small business owners to reimburse their employees for health premiums and qualified medical expenses. QSEHRA is available to companies with less than 50 full time equivalent employees and, unlike the Individual Coverage HRA, it has its limits in terms of monthly reimbursement rates.
What is the 2025 QSEHRA reimbursement maximum?
If you're looking for the 2025 QSEHRA reimbursement maximum or 2024 QSEHRA contribution limit, you're in the right place. The IRS just announced this month that the 2025 annual QSEHRA limit will be $6,350 for self-only coverage and $12,800 for family coverage.
These QSEHRA contribution limits have gone up since last year!
Compared to 2024, 2025 QSEHRA limits have increased for both individuals and families.
And now, some historical context.
What were the QSEHRA 2024 limits?
2024 QSEHRA limits were $6,150 for individuals and $12,450 for families.
What were the QSHERA 2023 Limits?
2023 QSEHRA contribution limits have been announced by the IRS. Slightly higher than last year, these HRA reimbursement limits represent the maximum amount an employer can reimburse their employees for health insurance using the Qualified Small Employer HRA.
For 2023, businesses with less than 50 employees can contribute a maximum of $5,850 for individual employees (this adds up to $487.50 per month) and a contribution of $11,800 for employees with a family (this adds up to $983.33 per month).
What was the 2022 QSEHRA reimbursement maximum?
In 2022, employers reimbursing employees for health insurance had a slightly lower threshold.
- Individual $5,450 or ($454.16/month)
- Family $11,050 or ($920.83/month)
In the law, these amounts are tied to inflation, and we’ve seen them go up a little bit every year.
Previous IRS QSEHRA Contribution Limits
2021
- Individual $5,300 or ($441.67/month)
- Family $10,700 or ($891.67/month)
2020
- Individual $5250 or ($437.50/month)
- Family $10,600 or ($883.33/month)
All QSEHRA reimbursements are subject to annual maximums and become available to employees on a monthly basis. This means employees can’t take the full annual amount in January—instead, the funds become available to employees each month.
How much do I reimburse for QSEHRA?
Employers have a few options on setting reimbursement rates. The key is rates have to be offered fairly to all eligible employees. Here are the most common tried and true methods we see:
- Reimburse all the same amount. This is pretty simple. Just pick a rate up to the individual maximum to give all employees.
- Reimburse all the maximum amount. Give all employees the maximum amount they are eligible for under the “single” or “family” categories.
- Reimburse different amounts based on family size. Employers can set different rates based on an employee’s dependents. The IRS requires that employers choose a reference plan or offer a fair percentage of the maximum.
- Reimburse different amounts based on employee age. Employers can vary rates by age but they must be tied to a reference plan on the individual market. To save you significant hassle though, most marketplace plans offer premiums in a 1:3 ratio for individuals ages 26 to 64.
What if I want to reimburse my employees more than the annual QSEHRA contribution limit?
For some businesses, depending on local market factors and their company makeup, monthly QSEHRA limits work great for their employees to be able to choose a quality MEC plan. For some employers, however, they want to offer more than the QSEHRA contribution limit.
For those folks, there's a new HRA called the Individual Coverage HRA that has no contribution limits. It's worth checking out if the limits are a concern. Again, what's best for one business isn't necessarily the best for another. Our team is on hand to help guide you through this decision!
It's worth checking out if the limits are a concern. Again, what's best for one business isn't necessarily the best for another. Our team is on hand to help guide you through this decision!
Take Command can help answer your HRA questions!
While there are numerous differences, the primary contrast when you compare QSEHRA vs. ICHRA is eligibility based on company size and design flexibility. If ICHRA is piquing your interest, peruse through our complete list of ICHRA pros and cons. Our team of QSEHRA administration experts are standing by to answer your questions about these HRAs. In the meantime, you can check out our comprehensive QSEHRA and ICHRA guides.
