Medical Expense✓ Verified · outline & fact-checked · Sep 2026Difficulty 3/5
Which statement correctly distinguishes a QSEHRA from an ICHRA?
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
A Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) is available to employers with fewer than 50 full-time equivalents that do not offer group health coverage; it lets them reimburse employees for medical expenses and individual premiums on a tax-favored basis. An Individual Coverage Health Reimbursement Arrangement (ICHRA) is available to employers of any size and reimburses employees for the cost of individual health coverage. Both are funded only by employer contributions, never by employee salary deferrals.
Why the other options are wrong
- A) Both the QSEHRA and the ICHRA are funded exclusively by employer contributions; employees cannot contribute to them.
- B) The QSEHRA, not the ICHRA, is limited to small employers (fewer than 50 full-time equivalents); an ICHRA is open to employers of any size.
- C) A QSEHRA is for employers that do NOT offer group coverage; it reimburses individual premiums rather than requiring purchase of a group policy.
Memory hook
QSEHRA = small employer, no group plan, reimburses premiums. ICHRA = any employer reimburses individual coverage.