Which statement correctly distinguishes a QSEHRA from an ICHRA?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Both QSEHRAs and ICHRAs are employer-funded health reimbursement arrangements that reimburse employees for medical expenses, including individual market premiums. The key distinction is employer eligibility: a QSEHRA (Qualified Small Employer HRA) may be offered only by small employers that do not offer group health coverage and are not applicable large employers, while an ICHRA (Individual Coverage HRA) may be offered by employers of any size. Neither is funded by employee contributions, and neither requires the employer to contract with a single carrier; employees purchase their own individual coverage and are reimbursed.
Why the other options are wrong
- B) This reverses the eligibility rules: the QSEHRA is the small-employer vehicle, and the ICHRA is available to employers of any size, not only those over 100.
- C) Both arrangements are funded entirely by the employer; employees do not contribute to a QSEHRA or an ICHRA.
- D) Employees buy their own individual coverage under these arrangements, so the employer does not contract with a single insurance carrier.
Memory hook
QSEHRA = Qualified Small Employer only. ICHRA = any employer. Q is small, I is inclusive.