A Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) is the simplest way for a small Florida business to help with health costs without buying a group plan. You set a monthly allowance, employees buy their own coverage, and you reimburse them tax-free — no carrier participation rules, no group renewal, no plan to administer. For a 5- or 10-person Florida business, it is often the lowest-friction option on the table.
QSEHRAs come with firm IRS dollar limits that change each year, and the 2026 figures are now set. The IRS released the 2026 limits in Revenue Procedure 2025-32 on October 9, 2025. Knowing those exact numbers is the starting point for deciding whether a QSEHRA fits your budget.
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2026 QSEHRA Contribution Limits
For plan years beginning in 2026, a Florida small business can reimburse up to $6,450 for self-only employees (about $537.50 per month) and $13,100 for employees with a family (about $1,091.66 per month). Those are increases of $100 (self-only) and $300 (family) over the 2025 limits. The figures are the maximum you may offer, not a required amount — you can set any allowance up to the cap. Employees who become eligible mid-year have their limit prorated for the months they are covered.
Who Can Offer a QSEHRA
A QSEHRA is available only to employers with fewer than 50 full-time-equivalent employees that do not offer a group health plan (including no FSA). That makes it a clean fit for the large majority of Florida small businesses — recall that about 99.8% of Florida employers are small businesses. You must offer the QSEHRA on the same terms to all eligible full-time employees, though you can vary the allowance by family status and by employee age (tied to the cost of insurance).
How Reimbursement Works
Employees buy their own individual coverage — typically an ACA marketplace plan, available in every Florida county through HealthCare.gov — and submit proof of the plan and their premiums. You reimburse them up to the allowance, free of payroll and income tax for both sides. Employees must have minimum essential coverage to receive reimbursements tax-free, and they must attest to that coverage. Unused allowance stays with the business.
Want to see whether a QSEHRA allowance covers a solid Florida plan for your employees? A licensed producer will check 2026 marketplace prices for your ZIP — at no cost.
Get a Business Quote →QSEHRA vs. ICHRA: Which for a Florida Small Business?
Both reimburse individual coverage tax-free, but they differ in important ways. A QSEHRA has IRS dollar caps ($6,450 / $13,100 in 2026) and is limited to employers under 50 with no group plan, but it is simpler and requires no employee-class design. An ICHRA has no dollar cap, allows different contributions by employee class, and can be offered alongside a group plan for different classes — but it carries more administrative structure. As a rule of thumb, the smallest and simplest Florida businesses lean QSEHRA; those wanting higher or class-varied contributions lean ICHRA.
The Subsidy Interaction
A QSEHRA reduces an employee's ACA premium tax credit dollar-for-dollar if the QSEHRA is considered affordable, and only the unaffordable portion preserves any subsidy. For lower-wage Florida employees who qualify for substantial marketplace subsidies, a large QSEHRA allowance can partially offset the very subsidy they would have received — so the allowance should be set with that interaction in mind.
Common Mistakes
- Offering a QSEHRA while also keeping a group plan or FSA — which disqualifies the QSEHRA.
- Exceeding the 2026 caps of $6,450 (self-only) or $13,100 (family).
- Failing to give the required 90-day advance notice to eligible employees.
- Ignoring the subsidy offset for lower-wage staff.
How to Set Up a QSEHRA in Florida
- Confirm you qualify. Fewer than 50 full-time-equivalent employees and no group health plan or FSA in place.
- Choose your allowance. Set any monthly amount up to the 2026 caps; you can vary it by family status and by employee age tied to insurance cost.
- Give 90 days' notice. Eligible employees must receive the required QSEHRA notice at least 90 days before the plan year begins.
- Adopt a plan document. Put the QSEHRA terms in writing; many Florida employers use a QSEHRA administrator to handle notices and reimbursements.
- Reimburse on proof. Employees attest to minimum essential coverage and submit premiums; you reimburse tax-free up to the allowance.
What a QSEHRA Allowance Buys in Florida
Whether a QSEHRA allowance goes far depends on the local marketplace. Because Florida prices individual plans by county rating area, the same $537.50 monthly self-only allowance covers more of a benchmark silver premium in a lower-cost county than in a higher-cost one. For a younger employee, a self-only allowance near the 2026 cap can cover most or all of a bronze or silver premium; for an older employee, whose age-rated premium is higher, the same allowance covers a smaller share. Checking 2026 marketplace prices for your employees' actual ZIP codes is the only way to see what your chosen allowance will really buy.
Frequently Asked Questions
What are the 2026 QSEHRA contribution limits?
For 2026, the maximum QSEHRA reimbursement is $6,450 for self-only coverage (about $537.50 per month) and $13,100 for family coverage (about $1,091.66 per month). These limits, set in IRS Revenue Procedure 2025-32, rose by $100 and $300 respectively over 2025. Employers may offer any allowance up to those caps.
Which Florida businesses can offer a QSEHRA?
Only employers with fewer than 50 full-time-equivalent employees that do not offer a group health plan or FSA can offer a QSEHRA. That covers the vast majority of Florida small businesses. The allowance must be offered on the same terms to all eligible full-time employees, with limited variation allowed by family status and age.
Do employees pay tax on QSEHRA reimbursements?
No — provided the employee has minimum essential coverage, QSEHRA reimbursements are free of income and payroll tax for both the employee and the employer. Employees submit proof of coverage and premiums, and the business reimburses up to the allowance.
Is a QSEHRA or an ICHRA better for a small Florida business?
A QSEHRA is simpler and capped ($6,450/$13,100 in 2026) and suits the smallest employers with no group plan. An ICHRA has no dollar limit and allows class-based contributions, but more administration. Businesses wanting to reimburse more than the QSEHRA caps, or to vary amounts by employee class, generally choose an ICHRA.
Can I offer a QSEHRA to only some employees?
No. A QSEHRA must be offered on the same terms to all eligible full-time employees — you cannot pick and choose individuals. You may vary the allowance only by family size and by employee age (tied to the cost of insurance). If you need to treat different groups of workers differently, an ICHRA with employee classes is the tool that allows it.
Related reading: Gulf Coast small business health plans, our Florida group health insurance requirements guide, and ICHRA for Florida small business. For individual options, see Sunstate Coverage.