2024 QSEHRA Limit
For 2024, the QSEHRA Limit is $6,150 (Maximum payments and reimbursements) and $12,450 (Maximum payments and reimbursements, family coverage).
Effective 2024-01-01Source: Rev. Proc. 2023-34 (IRS)Verified 2026-08-29
Compared with 2023
| Item | 2023 | 2024 | Change |
|---|---|---|---|
| Maximum payments and reimbursements | $5,850 | $6,150 | +$300 (+5.1%) |
| Maximum payments and reimbursements, family coverage | $11,800 | $12,450 | +$650 (+5.5%) |
Who it applies to
Small employers that offer a qualified small employer health reimbursement arrangement under IRC § 9831(d) and the employees covered by those arrangements.
What changed this year, and why
The maximum payments and reimbursements for a qualified small employer health reimbursement arrangement are $6,150 for individual coverage and $12,450 for family coverage for taxable years beginning in 2024.
Common questions
- What is a QSEHRA?
- A QSEHRA is a tax-advantaged arrangement under Internal Revenue Code § 9831(d) that allows small employers to reimburse employees for medical expenses and health insurance premiums.
- What are the maximum QSEHRA amounts for 2024?
- The maximum annual payment or reimbursement under a QSEHRA is $6,150 for individual coverage and $12,450 for family coverage.
Every amount on this page is a published figure rather than yours. The QSEHRA reimbursement headroom takes the number you enter and works it out against them, showing which published figure it used.
The four things an arrangement must do to be a QSEHRA
A QSEHRA must satisfy four conditions to qualify under the tax code. First, the employer alone must fund the arrangement; employees cannot contribute through salary reductions. Second, after an eligible employee provides proof of minimum essential coverage, the arrangement may pay or reimburse medical expenses the employee or the employee's family members incur. Third, total payments and reimbursements cannot exceed $6,150 for self-only coverage or $12,450 for family coverage in 2024. Fourth, the arrangement must generally be provided on the same terms to all eligible employees, though certain categories of workers may be excluded. If any of these four requirements is not met, the arrangement fails to qualify as a QSEHRA and the tax benefits are lost.
A QSEHRA is an arrangement that meets all the follow- ing requirements.
Publication 15-B (2024), Employer's Tax Guide to Fringe Benefits (IRS)
Which employers may offer one
To offer a QSEHRA, an employer must satisfy two conditions. First, the employer must not be an applicable large employer, which is defined as an employer that generally employed at least 50 full-time employees, including full-time equivalent employees, in the prior calendar year. Only small employers with fewer than 50 full-time and full-time equivalent employees may establish a QSEHRA. Second, the employer must not offer a group health plan to any of its employees. This prohibition extends to any group health plan, including a health reimbursement arrangement or a health flexible spending arrangement. If the employer sponsors any such plan for any employee, it cannot offer a QSEHRA. These two restrictions ensure that the QSEHRA benefit is reserved for small employers that do not otherwise provide group health coverage to their workforce.
To be an eligible employer, you must not be an applicable large employer, which is de- fined as an employer that generally employed at least 50 full-time employees, including full-time equivalent employ- ees, in the prior calendar year. You must also not offer a group health plan (including a health reimbursement ar- rangement (HRA) or a health FSA) to any of your employ- ees.
Publication 15-B (2024), Employer's Tax Guide to Fringe Benefits (IRS)
The same-terms rule, and who may be left out
A QSEHRA must generally be provided on the same terms to all eligible employees. The employer cannot favor certain employees with higher allowances or better terms. However, the arrangement may exclude certain categories of employees entirely. Employees who have not completed 90 days of service may be excluded. Employees who have not attained age 25 before the beginning of the plan year may be excluded. Part-time and seasonal employees may be excluded. Employees covered by a collective bargaining agreement may be excluded if health benefits were the subject of good-faith bargaining. Finally, nonresident aliens with no U.S.-source earned income may be excluded. These exclusions are optional; the employer may choose to include any or all of these groups, but if they are excluded, the exclusion must apply uniformly across the workforce.
However, your QSEHRA may exclude employees who haven’t com- pleted 90 days of service, employees who haven’t at- tained age 25 before the beginning of the plan year, part-time or seasonal employees, employees covered by a collective bargaining agreement if health benefits were the subject of good-faith bargaining, and em- ployees who are nonresident aliens with no earned in- come from sources within the United States.
Publication 15-B (2024), Employer's Tax Guide to Fringe Benefits (IRS)
What the employer reports on Form W-2
Employers must report the QSEHRA benefit on each employee's Form W-2. The amount reported in box 12, using code FF, is the total amount of payments and reimbursements the employee is entitled to receive from the QSEHRA for the calendar year, without regard to the amount actually received. This means the employer reports the permitted benefit amount, not what the employee actually claimed. For example, if the QSEHRA provides a permitted benefit of $3,000 but the employee only receives reimbursements of $2,000, the employer still reports the full $3,000 in box 12 using code FF. The reported figure reflects the employee's maximum entitlement under the arrangement for the year, regardless of whether the employee uses the full benefit or submits no claims at all during the calendar year.
You must report in box 12 of Form W-2 using code FF the amount of payments and reimbursements that your employee is entitled to receive from the QSEHRA for the calendar year without regard to the amount of payments or reimbursements actually re- ceived. For example, if your QSEHRA provides a permit- ted benefit of $3,000 and your employee receives reim- bursements of $2,000, on Form W-2, you would report a permitted benefit of $3,000 in box 12 using code FF.
Publication 15-B (2024), Employer's Tax Guide to Fringe Benefits (IRS)
How each figure was verified
Each number below was read from a stored copy of the document named beside it, and checked to occur word for word in the quoted sentence. The digest is of that stored text.
Rev. Proc. 2023-34 (IRS)
- Maximum payments and reimbursements
Qualified Small Employer Health Reimbursement Arrangement. For taxable years beginning in 2024, to qualify as a qualified small employer health reimbursement arrangement under § 9831(d), the arrangement must provide that the total amount of payments and reimbursements for any year cannot exceed $6,150
- Maximum payments and reimbursements, family coverage
the arrangement must provide that the total amount of payments and reimbursements for any year cannot exceed $6,150 ($12,450 for family coverage).