Streamline QSEHRA Reimbursements with Payroll Automation

Way to go! You’ve determined to reimburse your workers tax-free with a QSEHRA. Trust us, your workers will thanks! So what do you do now? How do I get the funds to my workers tax-free? Here’s the best way to automate QSEHRA reimbursements by way of payroll.

As the enterprise proprietor or plan administrator, you’ve got some choices and get to make the selection! Remember, the tax-free nature of the QSEHRA as a small enterprise medical insurance choice comes from having your plan paperwork in place, staying compliant, and having the correct year-end experiences. With our QSEHRA platform at Take Command, we’ll maintain that half for you. Each month, we’ll ship a reimbursement report so you understand precisely how a lot to reimburse your worker.

Getting your workers the cash is the ultimate half. Here are a few of the frequent reimbursement strategies we see:

1. Reimburse by way of your payroll system (really helpful)
2. Write a verify
3. Pay money
4. Use PayPal or one other switch service

In this text, we’ll clarify the best way to setup and make QSEHRA reimbursements by way of your payroll system (for the reason that different strategies are a bit extra self-explanatory).

We suggest reimbursing by way of payroll as a result of it makes it straightforward to trace reimbursements, will direct deposit into your workers’ accounts (assuming they’ve that arrange), and might roll-forward routinely every month to make your job, because the administrator, a lot simpler.

General Instructions for QSEHRA and Payroll

First, you’ll want to ensure you have your QSEHRA arrange. Setting up a QSEHRA is less complicated than you assume if you have not already. We are right here to reply any questions you’ve got alongside the best way.

Depending on the payroll supplier you employ, you might want to speak together with your payroll administrator to assist. In normal although, this is what you wish to do:

1. Open or edit your worker’s pay template 
2. Add a recurring, non-taxable expense or reimbursement-type
3. Enter the quantity offered on the reimbursement report from Take Command Health
4. Save or schedule for the following pay run

Most payroll techniques will carry that quantity ahead every month. For instance, if you happen to added a $200/mo reimbursement for an worker, the recurring settings ought to carry that ahead in order that the worker will get the identical $200/mo till modified. That means you will solely have to make changes when there’s a change. This makes it tremendous straightforward for premium-only QSEHRAs, because the quantities is not going to change fairly often and might roll ahead. For QSEHRAs that embrace medical bills, you will have to make a fast edit every month beforehand if the quantity is completely different. To assist, you may select the day of the month you would like Take Command Health to ship the reimbursement report so that you’ve got time to make these adjustments earlier than a pay run (In the admin settings, underneath “HRA Settings”, you may change the day of the month for the reimbursement report).

Although that takes care of the month-to-month reimbursements, you will need to concentrate on year-end necessities too. QSEHRA choices should be reported on every worker’s W2 type in Box 12 with code FF. Not an enormous deal now, however you will wish to speak together with your CPA or payroll admin to determine the best way to add that quantity. Some payroll techniques have codes you should utilize to do it routinely, some could require handbook edits. 

Ok, so these are the final directions that ought to work for many payroll suppliers (once more, you might have to ask somebody on the payroll agency you employ to assist or share these directions). If you employ Gusto, Zenefits, or Quickbooks/Intuit Payroll, you will discover particular directions beneath!

Instructions for recording QSEHRA reimbursements on Gusto:

1. Click the People tab.
2. Click the worker.
3. Click Add Recurring Reimbursement.
4. Enter the reimbursement identify. Use “Take Command Health QSEHRA” or one thing related.
5. Enter the reimbursement quantity that might be added on every common payroll. 
6. Click Save.
7. Repeat the steps above for every worker that is eligible for QSEHRA reimbursements

The subsequent time you run payroll, this quantity will seem within the reimbursement subject. You can edit this quantity if wanted earlier than processing the payroll. Reimbursements is not going to be taxed and won’t be reported as common wages. Once processed, this quantity will be seen as a separate line merchandise in your worker’s paystub.

Instructions for recording QSEHRA reimbursements on Zenefits: 

A recurring reimbursement must be added to the worker’s pay template in order that the reimbursement is added to every routinely generated pay run. If there’s at present a Draft run, the reimbursement might be added to that run as properly.

1. In payroll, click on Employees, and click on on the worker’s identify.
2. Click the Pay Template tab.
3. Scroll right down to the Reimbursements part, and click on +Add New Reimbursement.
4. Choose the reimbursement kind, and enter the quantity.
5. Repeat the steps above for every eligible worker

Instructions for recording QSEHRA reimbursements on Quickbooks and Intuit Online Payroll: 

Note: These directions are for Intuit Online Payroll. Instructions for different variations of Intuit Payroll and Quickbooks might be discovered right here.

For Intuit Online Payroll:

1. Click Employees.
2. Click the worker’s identify.
3. Click Edit within the Pay part.
4. Select the Reimbursement field. (If you do not see the field, click on Show all pay sorts.)
5. Click the Add/edit sorts hyperlink to the proper of the field.
6. From the dropdown, choose Add Reimbursement identify.
7. Enter a reputation like “Take Command Health QSEHRA”, and click on Save.

Once you’ve got created a named reimbursement like “Take Command Health QSEHRA”, you can too choose it for different workers following the steps above.

Intuit additionally has a novel monitoring code for QSEHRA reimbursements. Note, this is not going to truly trigger the switch of cash to occur (“monitoring solely”) but it surely’ll routinely populate QSEHRA reimbursements in your workers’ W2s on the finish of the 12 months. 

Take Command is right here to assist

Does this all sound complicated? As the business’s main QSEHRA directors, are right here that will help you by way of this course of! Once we do the primary one collectively, you will really feel tremendous assured going ahead.

If you do not see your payroll system listed right here, we’d be very happy that will help you discover out what you’ll want to do. Chat with us on our web site or schedule a name with one among our small enterprise advocates by clicking the button beneath!

Hungry for extra? Check out the reimbursement guidelines chapter of our helpful new QSEHRA Guide!

This submit was initially printed in 2019 and has been up to date with new data and insights for 2023.