8820 / If a QSEHRA does not cover all of an employee’s health insurance premium, can the remaining balance be paid with pre-tax money?

Yes. Eligible employers are permitted to allow QSEHRA participants to pay the remainder of a health insurance policy cost (beyond that which is covered by the QSEHRA) via an after-tax payroll deduction.

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Planning Point: While allowing an after-tax payroll deduction as a means for covering the remainder of any health insurance policy premium cost is technically permitted, employers must be careful to ensure that they are not endorsing any particular health insurance policy or carrier (in order to avoid the conclusion that the employer is sponsoring a group health plan).

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Self-employed individuals are not allowed a deduction for any month in which a family member is provided a QSEHRA that would pay or reimburse premiums or medical expenses of the self-employed individual.