1. Shelby Pratt Finance Director Ohio Ministry Network Resource Center
Church Finance Q&A
Shelby Pratt
Finance Director
Ohio Ministry Network
Resource Center

2. A New Healthcare Option for Small Employers… Yes, Your Church!
Shelby Pratt
Finance Director
Ohio Ministry Network
Resource Center

3. Synergy Conference 2017 - Shelby Pratt
3/4/2017
A Bit of History
Before the Affordable Care Act
Employers paid or reimbursed
Nontaxable fringe benefits
Revenue Ruling
Before the Affordable Care Act
Many employers provided health benefits for their employees:
By paying health insurers directly for the cost of private health insurance
By reimbursing employees for the substantiated cost of insurance premiums
Amounts paid by employers under such arrangements were nontaxable fringe benefits
Confirmed in IRS Revenue Ruling
Anyone know when that took place?
A New Healthcare Option for Small Employers

4. Synergy Conference 2017 - Shelby Pratt
3/4/2017
A Bit of History
Beginning in January 2014
ACA imposed penalty of $100
Per day
Per employee
Exception
Employers with only one employee
Today
Beginning in January 2014
ACA imosed penalty of $100
Per day
Per employee
TECHNICALLY: Imposed by IRS based on ACA market reforms
Today we have something new…
A New Healthcare Option for Small Employers

5. QSEHRA Qualified Small Employer Health Reimbursement Arrangement
Synergy Conference Shelby Pratt
3/4/2017
QSEHRA Qualified Small Employer Health Reimbursement Arrangement
QSEHRA: Qualified Small Employer Health Reimbursement Arrangement
A New Healthcare Option for Small Employers

6. QSEHRA 21st Century Cures Act
Synergy Conference Shelby Pratt
3/4/2017
QSEHRA 21st Century Cures Act
QSEHRA: Part of the 21st Century Cures Act
Signed into law by President Obama on December 13, 2016
Actually available for small employers as of January 1, 2017
No one really heard about it
Apparently, it was a rather massive piece of legislation
Primarily dealing with revamping the FDA approval process
As well as provided funding for healthcare initiatives an research
One Article: QSEHRAs were Literally tacked onto the end of the bill.
A New Healthcare Option for Small Employers

7. What is QSEHRA? An arrangement that is:
Provided on the same terms to all eligible employees of an eligible employer
Funded solely by the eligible employer
Employer contributions only
No salary reduction contributions from employee compensation

8. What is QSEHRA? An arrangement that:
Provides for the payment/reimbursement of medical expenses of the employee & family
Proof of minimum essential coverage (MEC)
Has a permitted benefit (maximum payment or reimbursement) of:
$4,950 for an employee
$10,000 for employee & family

9. Synergy Conference 2017 - Shelby Pratt
3/4/2017
QSEHRA Definitions
Same Terms:
Pay same percentage of premiums for covered employees regardless of:
Number of dependents
Status of employee
Examples
EXAMPLE #1: If you offer to pay 50 percent of premiums for the employee and any dependents, this may result in an employee with a spouse and children receiving more financially than an employee without dependents. This still meets the requirements of the plan because they are receiving a benefit under the same terms—50 percent of the premium is being paid.
EXAMPLE #2: Cannot pay 100 percent of premiums for managers and 50 percent for the rest of your staff.
A New Healthcare Option for Small Employers

10. QSEHRA Definitions Eligible Employer: Not an applicable large employer
Less than 50 FTE employees the prior year
Does not offering a group health plan

11. Synergy Conference 2017 - Shelby Pratt
3/4/2017
QSEHRA Definitions
Eligible Employee:
Any employee of an eligible employer EXCEPT:
Have not completed 90 days of service
Under the age of 25
Part-time or seasonal
Nonresident aliens with no US income
A New Healthcare Option for Small Employers

12. QSEHRA Definitions Minimum Essential Coverage:
An individual health insurance policy
Coverage under a spouse’s or parent’s employer’s health plan
Governmental health plan (Medicare)

13. Notice & Reporting Requirements
Synergy Conference Shelby Pratt
3/4/2017
Notice & Reporting Requirements
Employee Notice
Annually, 90 days before beginning of year an employer will fund a QSEHRA
Or date on which an employee becomes eligible
Written notice
Amount of permitted benefit
Employee required to notify Exchange
Consequences of not having MEC
$50 per employee penalty for no notice
Employee Notice
Not later than 90 days before the beginning of a every year in which an employer will fund a QSEHRA
Or, if later, the date on which an employee becomes eligible for the QSEHRA)
The employer must provide eligible employees with a written notice containing
The amount of the employee's permitted benefit
The employee is required to notify the exchange of the QSEHRA if they apply for a subsidy
The consequences of not having other minimum essential coverage
If not MEC for any month
Employee may be subject to tax under the individual mandate requirement of ACA
Reimbursements from the QSEHRA may then be includible in gross income.
Employer is liable for a penalty equal to $50 per employee per incident for failure to provide notice.
Up to a total of $2,500 per calendar year
A New Healthcare Option for Small Employers

14. Notice & Reporting Requirements
Synergy Conference Shelby Pratt
3/4/2017
Notice & Reporting Requirements
Form W-2
Employer reports employee’s permitted benefit
Possibly a new Box 12 code
A New Healthcare Option for Small Employers

15. Notice & Reporting Requirements
Synergy Conference Shelby Pratt
3/4/2017
Notice & Reporting Requirements
Exchange Notification
Exchange coverage premium assistance
Provide the amount of permitted benefit
QSEHRA reimbursements reduce or eliminate premium tax credit/marketplace subsidy
Exchange Notification
An eligible employee who applies for advance premium assistance with respect to Exchange coverage for a year
Must provide the Exchange with the amount of his or her permitted benefit for the year.
A New Healthcare Option for Small Employers

16. QSEHRA Plan Document www.coredocuments.com $199
Synergy Conference Shelby Pratt
3/4/2017
QSEHRA Plan Document $199
QSEHRA: Plan Document
A New Healthcare Option for Small Employers

17. A New Healthcare Option for Small Employers… Yes, Your Church!
Shelby Pratt
Finance Director
Ohio Ministry Network
Resource Center