It’s been two years since small businesses first had access to the qualified small employer health reimbursement arrangement (QSEHRA). In that time, the popularity of the benefit has grown and businesses have leveraged it to increase their offerings to employees.
With a QSEHRA, businesses offer employees a monthly allowance. Employees then choose and pay for health care, including insurance policies. The business then reimburses employees tax-free up to their allowance amount.
At PeopleKeep, we provide the industry’s first and only look at data from real businesses offering the benefit. According to our findings in The QSEHRA: Annual Report 2019, businesses offered an average $297 a month to single employees and $445 to employees with a family in 2018—an increase of 6 percent and 7 percent, respectively, since 2017.
In this report, we’ll dive more fully into those findings by examining the allowance amounts offered by businesses across company size, state, and industry.
QSEHRA allowances by company size
As was the case in 2017, smaller groups typically offered employees larger allowance amounts in 2018.
Those with fewer than 10 employees offered average allowances of $299 for single employees and $452 for employees with a family. That’s compared with groups with between 11 and 24 employees, which offered averages of $276 for single employees and $381 for employees with a family.
Finally, businesses with more than 25 employees offered an average $264 for single employees and $406 for employees with a family.
QSEHRA allowances by state
Allowance amount averages varied somewhat across the country in 2018.
Those states offering the highest allowance amounts across all employee classes were:
- West Virginia: $529
- Wyoming: $459
- Delaware: $421
- New Hampshire: $385
- The District of Columbia: $380
Some states also increased their allowance amounts at a faster rate than the national average. Those states were:
- Oklahoma: 69%
- Wyoming: 25%
- New Hampshire: 18%
- Wisconsin: 14%
- Iowa: 11%
QSEHRA allowances by industry
This year, the PeopleKeep report also looked at allowance amounts by industry.
Typically, industries with higher average salaries also offered the highest average QSEHRA allowance amounts. The top three industries by allowance amount were technology (offering $351 for single employees and $543 for employees with a family), accounting ($317 for single employees and $445 for employees with a family), and legal ($308 for single employees and $469 for employees with a family).
However, there were also industries that offered high average allowance amounts to only single employees and to only employees with a family.
For example, the construction sector offers an average $315 to single employees and religious organizations offer an average $597 to employees with a family.
Conclusion
In the second year of QSEHRA availability, we saw small businesses using the benefit increase employee value by offering comparatively higher monthly allowance amounts for 2018.
These findings are encouraging. At PeopleKeep, we believe the QSEHRA should be used to advance the goals of small organizations by keeping employees happy. By offering greater allowance amounts to keep pace with rising health care costs, businesses and other organizations using the QSEHRA are doing just that.
As the need for small business health insurance alternatives grows, we believe the QSEHRA will continue to increase in popularity and businesses will continue to support their employees by offering increasing allowance amounts.
Want to know more about how the QSEHRA was used in 2018? Download the full report or check out an infographic with the report’s top findings. Also, be sure to subscribe to our blog; next week, we’ll be covering how employees used the QSEHRA, including average utilization rates, premium submission rates, and the most popular items and services reimbursed through the QSEHRA.
