Learn how to report the Qualified Small Employer Health Reimbursement Arrangements (QSEHRA).

The 21st Century Cures Act allows certain small employers to reimburse employees for healthcare coverage purchased through the individual market. The law includes stipulations for Qualified Small Employer Health Reimbursement Arrangements (QSEHRA).

We'll tell you all you need to know about it for the W-2 and online payroll.

QSEHRA requirements

Qualifying small employers can initiate reimbursement for medical premiums and qualified expenses, provide the following conditions are met:

  • The plan is solely funded by the employer, without any employee wage contribution.
  • Employee provides proof of coverage.
  • All eligible employees must be allowed to participate.
  •  Funds can be used for payment or reimbursement of eligible employees. Or eligible employee’s family member medical expenses, including health insurance premiums.
  • Payments/reimbursements are limited to $5,050 for an individual. And $10,250 for family (limits will be indexed annually).
  • Reimbursements become taxable for any month the employee does not have coverage.
  • Employer is not considered an Applicable Large Employer (ALE). Meaning less than 50 full-time employees or equivalents.

Report reimbursed health coverage on W-2 forms

 

Intuit Online Payroll

  1. In your To Do tab, under It's time to file forms, select W2, Copies A & D.
  2. You will be asked if you have paid retirement plan outside Intuit Online Payroll. Select Yes or No.
  3. Select go here.
    report reimbursed health coverage on W2 forms in QuickBooks
  4. Enter $ amount per employee under Total for Box 12FF.
    enter health coverage reimbursement amount on W2 forms in QuickBooks
  5. Select Save & Next.
  6. Select View to review the form.
  7. To edit amount, select Need to update your Health Coverage amounts in box 12?
    update coverage amounts in W2 box 12 in QuickBooks
  8. Whenever you're ready, select Submit.

QuickBooks Online Payroll

  1. In your Dashboard, under Task, select Show more beside payroll tax forms outstanding.
  2. Locate W2, Copies A & D (2017) filing. Then select File now.
  3. Select Annual Forms. Then select W2, Copies A & D.
  4. You will be asked if you have paid retirement plan outside QuickBooks Online Payroll. Select Yes or No.
  5. Select Go here.
    report health coverage on W2 form in QuickBooks
  6. Enter $ amount per employee under Total for Box 12 FF.
    enter total amount for W2 box 12 in QuickBooks
  7. Select Continue to proceed.
  8. Select View to review the form.
  9. To edit amount, select Need to update your Health Coverage amounts in box 12?
    report health covers on W2 form in QuickBooks Payroll Tax Center
  10. Whenever you're ready, select Submit.

 

Intuit Full Service Payroll/QuickBooks Full Service Payroll

Contact Payroll Support for assistance.

Employer options

You have two options to settle reimbursements. You can settle with the employee directly or track the reimbursement through payroll.

Track the reimbursement.

  1. Add a Reimbursement pay type. (See Create a reimbursement pay type for instructions.)
  2. Rename reimbursement name to QSHERA.
  3. Amount can be added when running payroll.
Note: Adding this pay type doesn't automatically generate an amount in box 12 with code FF unless you follow the W-2 reporting steps.

Run a report

You can run a report to see the total QSHERS for the year for each employee.

Intuit Online Payroll/Intuit Full Service Payroll

  1. Go to Reports.
  2. Under Employee Reports, select Payroll Details.
  3. Change the Date Range to last year.
  4. Change the All Checks drop-down to Summary by Employee. Then select Update Report.
  5. The total QSHERA for the year per employee will show.

QuickBooks Online Payroll/QuickBooks Full Service Payroll

  1. Select Reports.
  2. Select Payroll Details.
  3. Change Date Range to last year.
  4. Change Employee field to Summary by Employee. Then select Run Report
  5. The total QSHERA for the year per employee will show.

If the QSHERA amounts are incorrect, contact Payroll Support for assistance.