March 9, 2018 at 1:55 am #164125
I am researching the new QSEHRA regulation and considering using your company.
I do not want to start offering the plan if I am (personally) not eligible for the plan.
It is an PLLC company (one owner) using S corp status for tax purposes with 6 employees.
The owner is working full time with the company – receives W – 2.
There is confusing information regarding my eligibility. According to some publications online, S shareholders (owners) are not eligible for participating in QSEHRA.
Now IRS published a new Q/A clarification on 10/17/2017 regarding QSEHRA plans and please read Question # 3 / and Q # 9. – https://www.irs.gov/pub/irs-drop/n-17-67.pdf
The way it is written – does it mean that the owner is eligible for QSEHRA if he is a full time employee?
Thank you for your help,March 9, 2018 at 2:09 am #172753
Funny, I was just writing an article on this. It sure looks like the answers to question 3 and 9 are in conflict on this IRS document: https://www.irs.gov/pub/irs-drop/n-17-67.pdf
Since we’re not certified as attorneys or licensed tax advisors, and your question is very specific, I recommend you talk to your payroll tax accountant to see if they can sort it out. My gut says that if the owner is getting paid via W-2, there should be no issue, but the IRS doc seems to read otherwise.
(Sometimes owners can’t participate in benefits, while their employed non-owner spouse can). Not sure if that’s an option.
Good luck with your research and if you get a better answer, please share it! You may find resources in this article on HRAs attached (although it’s due for an update). Perhaps a rep at a certified benefits company like Zane Benefits, Blue Cross or United Health can assist.
Laura, HR Writer