Qualified small employer HRA · Under 50 employees
QSEHRA for Michigan small businesses
A QSEHRA is the simplest way for a small employer with no group plan to give tax-free help with health costs. Here are the rules, the limits and how far the money goes in Michigan.
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- 2026: $6,450 / $13,100
- Under 50 full-time
- No group plan needed
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QSEHRA rules in plain English
- Who can offer one: employers that aren’t an applicable large employer (fewer than 50 full-time employees, counting full-time equivalents) and that don’t offer any group health plan, including a health FSA or another HRA.
- Employer-funded only. No salary reductions.
- Same terms for everyone eligible. Amounts can vary only by age and family size. You may exclude employees with under 90 days of service, under age 25, part-time or seasonal staff, union employees whose benefits were bargained, and certain nonresident aliens.
- Proof of coverage. Reimbursements are tax-free when the employee has minimum essential coverage, such as a Marketplace plan.
- Notice and reporting. Written notice 90 days before each plan year (and to new hires when eligible), and the permitted benefit goes on Form W-2, box 12, code FF.
Sources: IRS Publication 15-B (2026); HealthCare.gov small-employer HRA page; IRS Notice 2017-67.
QSEHRA limits
| Year | Self-only | Family |
|---|---|---|
| 2024 | $6,150 | $12,450 |
| 2025 | $6,350 | $12,800 |
| 2026 | $6,450 ($537.50/mo) | $13,100 ($1,091.66/mo) |
| 2027 | Not yet published by the IRS as of October 14, 2026 | |
Source: HealthCare.gov; IRS Pub. 15-B. We’ll update this when the IRS releases 2027 limits.
Check QSEHRA for my businessWhat the cap buys in Michigan
At the 2026 self-only maximum of $537.50 a month, a QSEHRA covers the full lowest-cost Silver premium for a 40-year-old in most large Michigan counties, but only about half for a 60-year-old. The tax-credit interaction matters too: an employee’s Marketplace credit is reduced by the QSEHRA amount, and an “affordable” QSEHRA can remove it. [CMS PY2026; HealthCare.gov]
| Where employees live (2026) | Insurers | Plans | Lowest Silver, age 30 | Lowest Silver, age 40 | Lowest Silver, age 60 |
|---|---|---|---|---|---|
| Kent (Grand Rapids) | 7 | 80 | $418.55 | $471.29 | $1,000.84 |
| Wayne (Detroit) | 5 | 64 | $450.83 | $507.63 | $1,078.03 |
| Ingham (Lansing) | 5 | 51 | $394.93 | $444.69 | $944.36 |
| Washtenaw (Ann Arbor) | 5 | 59 | $430.84 | $485.12 | $1,030.21 |
| Saginaw | 4 | 42 | $518.29 | $583.59 | $1,239.32 |
Source: CMS QHP Landscape Individual Market Medical file, plan year 2026, computed by county. Monthly full price, one non-tobacco adult. The lowest-cost Silver plan is the one used in the ICHRA affordability test. 2027 prices post when HealthCare.gov window shopping opens.
QSEHRA vs. ICHRA vs. a group plan
| QSEHRA | ICHRA | Small-group plan | |
|---|---|---|---|
| Employer size | Under 50 full-time (incl. equivalents) | Any size | 1–50 in Michigan’s small-group market |
| Annual cap | Yes (IRS limit) | No cap | Your share of premiums |
| Different amounts by class | No (age and family size only) | Yes, by permitted class | Contribution rules vary by insurer |
| Can sit alongside a group plan | No | Yes, for different classes | – |
| Employees choose | Their own coverage | Their own individual plan | From the plans you pick |
Outgrowing the cap or want classes? See ICHRA for Michigan employers. Want one shared network? See small-group options. Also on your list: Michigan’s Earned Sick Time Act now covers employers with 10 or fewer employees (since October 1, 2025).
2-minute advisor Q&A
QSEHRA in 2 minutes
A Nexus advisor answers the questions we hear most. (Video coming soon.)
- Who can offer a QSEHRA?
- QSEHRA or ICHRA?
- How does it affect employees' tax credits?
Frequently asked questions
What is the QSEHRA limit for 2027?
The IRS had not published the 2027 limits as of October 14, 2026. For 2026 the limits are $6,450 for self-only coverage and $13,100 for family coverage. We'll update this page when the 2027 figures are released.
Can I offer a QSEHRA and a group health plan?
No. A QSEHRA is only for employers that don't offer any group health plan, including a health FSA or another HRA. An ICHRA can sit alongside a group plan for different classes of employees.
Do employees need health insurance to use a QSEHRA?
To get reimbursements tax-free, the employee needs minimum essential coverage, such as a Marketplace plan, and must give proof of coverage.
Does a QSEHRA affect Marketplace tax credits?
Yes. The QSEHRA amount reduces the employee's premium tax credit, and an affordable QSEHRA can remove it. Employees report the QSEHRA when they apply on HealthCare.gov.
How do I report a QSEHRA?
Report the permitted benefit on each eligible employee's Form W-2 in box 12 with code FF, based on what the employee was entitled to, not what they claimed.
Will you sell my information?
No. It goes to one licensed Michigan advisor at Nexus and is never sold.
Where are you on the benefits ladder?
Keep exploring
Small-business pages by region
- Grand Rapids · Kent & Ottawa
- Detroit metro · Wayne, Oakland & Macomb
- Lansing · Ingham, Eaton & Clinton
- Ann Arbor · Washtenaw
Buying coverage for yourself or your family? See Michigan Open Enrollment 2027.