QSEHRA Reimbursement Budget Planner
Introduction
A Qualified Small Employer Health Reimbursement Arrangement, or QSEHRA, lets an eligible small employer reimburse eligible employees for certain medical care expenses, including individual health insurance premiums, when the arrangement is set up and administered correctly. This planner focuses on the cash-budget side: monthly allowances, expected reimbursement utilization, administrative cost, annual trend, and a rough comparison with paying the same dollars as taxable wages.
The calculator is not a plan-design engine and it is not legal or tax advice. It does not determine whether your company is an eligible employer, whether an employee has minimum essential coverage, whether an expense is reimbursable, whether notices and substantiation are correct, or whether premium tax credit interactions apply. Use it to model scenarios, then confirm the design with current IRS guidance, plan documents, and a qualified benefits advisor.
How to use this calculator
Enter the number of eligible employees you expect in the self-only and family tiers, then enter the monthly allowance for each tier. Add the utilization percentage you expect employees to claim and substantiate, the employer payroll tax rate used for the wage comparison, administrative fees, and an annual medical trend assumption. The annual limit fields default to the 2026 QSEHRA amounts listed in IRS Publication 15-B, but they are editable so you can update them for another plan year or for prorated internal analysis.
After you submit the form, review the summary cards first. Then scan the 12-month forecast for cash flow and the utilization table for sensitivity. A warning appears if a monthly allowance multiplied by 12 is above the entered annual limit. The projection still uses the allowance you entered, so the warning is a signal to review the design rather than a hidden adjustment.
Formula summary
The annual allowance pool is the sum of each tier's employee count multiplied by its monthly allowance and by 12. Expected reimbursements apply the utilization percentage to that pool, and the total employer budget adds monthly administration costs and trend-adjusted forecast amounts.
Example to try
Eight self-only employees at $420 per month and four family-tier employees at $860 per month create a maximum allowance pool of $81,600 before utilization. At 82% utilization, expected reimbursements are about $66,912 before administrative fees.
Limitations to check
The planner does not determine employer eligibility, employee coverage status, substantiation compliance, premium tax credit interactions, or final legal limits. Verify the current plan-year rules before adopting a benefit design.
Forecast tables
| Month | Reimbursements | Admin fees | Total monthly cost | Cumulative cost |
|---|
| Scenario | Utilization | Annual reimbursements | Combined annual cost | Equivalent taxable payroll cost |
|---|
Formula and method
The planner starts with a maximum monthly allowance pool:
Base monthly allowance pool = (Nself × Aself) + (Nfamily × Afamily)
It then estimates expected reimbursements from utilization and a month-by-month trend factor:
Expected monthly reimbursements = Base pool × (Utilization ÷ 100) × (1 + AnnualTrend)month / 12
Total monthly cost = Expected reimbursements + Admin fee
Payroll-equivalent cost = Annual reimbursements × (1 + EmployerPayrollTaxRate)
The monthly forecast applies trend gradually from month 1 through month 12. Real premium changes may happen at renewal dates instead, so this is a planning approximation rather than a claim prediction.
Worked example
With the default inputs, 8 self-only employees at $420 per month and 4 family employees at $860 per month create a monthly allowance pool of $6,800. At 82% utilization, the first-month reimbursement estimate is $5,576 before the $120 admin fee. The self-only annual allowance is $5,040 and the family annual allowance is $10,320, both below the editable 2026 warning limits of $6,450 and $13,100.
If the utilization assumption is too low, actual reimbursements can exceed the budget. That is why the scenario table compares utilization 10 percentage points lower, expected, and 10 points higher. The spread between those totals is a practical reserve target.
Current rule context to verify
IRS Publication 15-B for 2026 describes QSEHRAs as employer-funded arrangements that reimburse medical care expenses after proof of coverage, generally on the same terms for eligible employees, and states that payments and reimbursements must not exceed $6,450 for self-only coverage or $13,100 for family coverage for 2026. It also notes that an eligible employer generally must not be an applicable large employer and must not offer a group health plan to employees. These rules are summarized here only to help you interpret the budget model; always verify the current plan-year guidance and any later updates.
For implementation details, IRS Notice 2017-67 is still a key reference for QSEHRA administration topics such as notices, eligible employees, permitted benefits, substantiation, and premium tax credit coordination. This calculator does not apply those rules for you.
Assumptions and limitations
- Budgeting only: the forecast estimates cash outlay and does not determine legal eligibility or tax treatment.
- Limit warnings only: annual limit fields are editable and used for warnings. The calculator does not silently cap or prorate reimbursements.
- No premium tax credit modeling: QSEHRA affordability and premium tax credit interactions are outside this calculator.
- No expense eligibility review: substantiation, documentation, and reimbursable expense rules must be handled by the plan administrator.
- Simplified headcount: the participant counts in the form are for budgeting, not for applicable large employer or eligibility testing.
- Simple payroll comparison: wage-equivalent cost uses only the employer payroll tax rate you enter and does not model employee tax impact.
FAQ
Does this planner enforce QSEHRA annual limits?
No. It shows warnings against the editable annual limit fields, but it does not silently cap the budget. Confirm the applicable plan-year limits and rules before finalizing a QSEHRA design.
What does utilization mean in this calculator?
Utilization is the share of the available allowance pool that employees are expected to substantiate and claim. An 80% utilization assumption means the budget expects reimbursements equal to 80% of the maximum allowance pool.
Is the payroll comparison tax advice?
No. The payroll comparison only applies the employer payroll tax rate entered in the form to show a rough wage-equivalent cost. It does not model employee income taxes, premium tax credits, eligibility, notices, substantiation, or other tax and benefits rules.
Mini-game: receipt run
Catch clean reimbursement signals and dodge budget or compliance traps. The game is optional, but it reinforces the same habits the planner needs: substantiate claims, respect caps, and keep assumptions realistic.
Controls: move your pointer, tap a lane, or use Left and Right arrow keys.
Start the game when you are ready.