Smart Tax Strategies

All companies want to save on money and pay less in taxes at the end of each taxable year. With the different operating costs businesses deal with every day, it would be nice to get extra income for the company. With Smart Tax Strategies, all of these will be possible.

It is even possible that the savings a company gets also benefits its employees at the same time.

The Qualified Small Employer Health Reimbursement Arrangement (QSE-HRA) is available for businesses without a group health plan with less than 50 employees.

At CPA Solvers, the QSE-HRA is a health coverage plan offered for both big and small businesses. It allows companies to reimburse employees for their medical expenses and health insurance premiums.

It is an affordable alternative for small businesses since it does not require any group health insurance premium. One has to know more about the Employer Tax Saving Strategies and Solutions Order Form to take advantage of its benefits.

QSE-HRA is one of the best ways for companies to save money and providing health benefits packages to employees. Business employers may choose to contribute to the QSE-HRA to be offered equally to all their employees, except for:

  • Employees with a family coverage plan
  • Employees employed for less than
  • Part-time workers
  • Seasonal workers
  • Employees below 25 years of
  • Other factors affected by union contracts and citizenship
HRA

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Things to do by small business employers under the QSE-HRA

As the Plan requires an employer to make contributions, instead of the individual employee, businesses are required to do the following:

Verify the existence of qualifying health insurance

Companies need to verify that their employees have qualifying health insurance before making any reimbursement under the QSE-HRA. They must require the employees to present proof of health insurance coverage.  

Issue written notice

Employers need to issue a written notice to qualifying employees 90 days before the start of the Plan year. The notice must indicate the benefit amount of the Plan coverage.

Adopt a formal plan document and SPD

Employers are required to adopt an official document and Summary of Plan Description (SPD) defining the Plan benefit in writing. It will allow employers to start saving money for their companies.

Exclusively offer QSE-HRA to employees

Employers cannot provide any additional group health insurance to their employees to get the benefits of QSE-HRA.  They should not also give any other HRAs or Health Care Flexible Spending Accounts (FSA).  

Further, they cannot offer Limited Health Care Flexible Spending Accounts (FSA) nor other same plans that provide excepted benefits.

HRA, as a tax-deductible employee benefit for small businesses, gives more reimbursements through other HRA choices that CPA Solvers offer.

ICHRA

The Individual Coverage Health Reimbursement Account (ICHRA) is the most flexible and most affordable health plans for employers. Most companies implementing the ICHRA have only about 20-30 or fewer employees.

Benefits of ICHRA for employers

  • Employers do not need to get or sponsor a costly group health plan for employees
  • Available to businesses of any size, big or small
  • Amount of employer funding has no minimum or maximum limit
  • No employer processing is required. Only the submission of proof of coverage is necessary.
  • Can be integrated with existing Medicare of eligible employees)
  • Works with Flexible Spending Arrangements (HSAs) and health Flexible Spending Arrangements (FSAs)

Benefits of ICHRA for employees

  • Employees can choose their health coverage based on their needs and financial capability
  • They can keep the same health insurance even if they change jobs
  • Can reimburse for qualifying health insurance
  • Premium reimbursement can be split between spouses if both have ICHRA
smart tax strategies

EBHRA

Businesses with employer-sponsored group health packages for employees can choose another type of health coverage. It is the Excepted Benefit HRA (EBHRA), which pays premiums and expenses for excepted benefits like dental and vision coverage.

Employees can participate in an EBHRA even if they don’t participate in their company’s traditional group health plan. It means more savings for employees who have coverage under the spouse or parent health insurance.

The EBHRA reimburses employees for dental, vision, and other excepted medical insurance premiums. Depending on the employer, an EBHRA may also give reimbursement to employees for the following:

  • Short-term limited-duration insurance or STLDI
  • Continuation of coverage premium under COBRA
  • Cost-sharing of co-pay, deductible, and other eligible medical expenses

Companies can also save money under the EBHRA when they design it in a way that any unused amount will be surrendered back to the employer. 

The provision where employees return to the company the remaining package amount is known as “use it or lose it.” It is done at the end of each Plan Year. 

CPA Solvers can assist businesses who may want to avail of this health benefits package for their workers.

Section 105 HRA for 1 Employee or Spouse

This Plan is designed for small businesses with only one employee eligible for health benefits. It is also applicable for business owners whose spouse is legally working for their company or organization. 

Companies benefit through reimbursable family health insurance and medical expenses, which is a tax-deductible expense of the business.

With CPA Solvers’ 15-year experience, you can be assured to get the appropriate guidance on your taxation and accounting needs. CPA Solvers can also guide you to pick the perfect HRA choice your company deserves.