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!
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.
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.
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.
2024 QSEHRA limits were $6,150 for individuals and $12,450 for families.
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).
In 2022, employers reimbursing employees for health insurance had a slightly lower threshold.
In the law, these amounts are tied to inflation, and we’ve seen them go up a little bit every year.
2021
2020
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.
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:
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!
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.