Comparison
ICHRA vs QSEHRA
Both let employers reimburse employees tax-free for individual ACA coverage instead of buying a group plan. The right one depends on how large you are and how much flexibility you want.
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Request a broker →ICHRA vs QSEHRA — side-by-side
| Feature | ICHRA | QSEHRA |
|---|---|---|
| Employer size | Any size | Under 50 FTEs only |
| Annual reimbursement cap | No federal cap | ~$6,350 self / $12,800 family (2025; indexed) |
| Can offer group plan too? | Yes — to different employee classes | No — must replace group plan entirely |
| Class-based design | Yes (11 permitted classes) | No — uniform terms |
| Affects ACA subsidies | Yes — affordability determines APTC eligibility | Yes — and reduces APTC dollar-for-dollar |
| Employee must have ACA coverage | Yes (individual or Medicare) | Yes (MEC required) |
Which is better for you?
QSEHRA fits small employers (under 50 FTEs) that want a simple, capped, uniform benefit instead of a group plan.
ICHRA fits employers of any size that want unlimited reimbursement, class-based design (e.g., different amounts for salaried vs hourly), or to keep a group plan for some classes while reimbursing others.
Growing past 50 FTEs? You'll need to switch from QSEHRA to ICHRA.
Frequently asked questions
Can I have a QSEHRA and a group health plan?
No. QSEHRA is only available to employers who do not offer any group health plan.
What employee classes can ICHRA use?
Full-time, part-time, seasonal, salaried, non-salaried, employees in a waiting period, foreign employees working abroad, employees in different rating areas, collectively bargained, temporary employees of staffing firms, and combinations of these.
How does ICHRA/QSEHRA affect ACA subsidies?
If the HRA is 'affordable' (employee contribution under the affordability threshold of household income), it disqualifies the employee from premium tax credits. Employees should run the math before opting in.
Do these replace traditional group health insurance?
QSEHRA fully replaces it. ICHRA can replace it or coexist with it for different employee classes.
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Sources
The information contained on this website is for educational purposes only. We are not responsible for missing or inaccurate information. Please consult a licensed insurance broker in your state and area for insurance advice. Please consult a CPA for tax or legal advice.