For many small employers, the idea of setting up a QSEHRA for the first time is stressful. The good news: with Salusion, QSEHRA setup takes about 15 minutes. This guide walks through each step in order, explains the reasoning behind each key decision, and covers what to expect at every stage, from configuring your plan to signing your agreements and onboarding your employees. If you'd rather watch than read, our QSEHRA onboarding video covers the core setup flow in under six minutes.
What Salusion Asks During QSEHRA Setup
Step 1 — Enter Your Company Information
The first step asks for basic details about your business: legal name, EIN, address, and plan administrator contact information. This information serves two purposes: Salusion uses it to identify and verify your business as part of its Know Your Customer (KYC) and banking obligations (since Salusion moves funds on your behalf through its ACH reimbursement services), and to generate the legal plan documents and compliance materials associated with your QSEHRA.
Have the following ready before you begin:
- Legal business name and EIN
- Business address
- Plan administrator name and email address
- Intended plan start date (you'll set this in the next step)
Salusion generates your plan document, summary plan description, and required annual employee notices automatically from this information.
Step 2 — Choose Your Plan Year Start Date
A plan year is the defined period during which your QSEHRA operates: allowances accrue, expenses are incurred, and the benefit resets when a new one begins. On Salusion, plan years must begin on the first of a month. During setup, you choose which month you want the plan year to start and whether you want the first plan year to be shorter than 12 months.
Shortening the first year is optional, but it has a practical benefit: it lets you align all future plan years to a specific date. If you start in April without shortening the first year, your renewal date will always fall in April. If you shorten the first year to end December 31, every plan year after that runs January through December.
For premium reimbursements, each month's allowance becomes available on the 17th of the preceding month. More on reimbursement timing in Step 6.
Step 3 — Decide Who Can Participate
All employees are eligible to participate in a QSEHRA unless they fall within a category the employer is permitted to exclude. Employees who remain eligible must be offered the benefit on the same terms. Allowances cannot vary based on role, salary, or tenure, although they may vary based on age and family size, as explained in Step 5.
The IRS permits the following exclusions:
Employees you exclude can't participate in the QSEHRA for the duration of the plan year. For a full overview of eligibility rules, see Salusion's employee eligibility guide.
Step 4 — Choose Which Expenses to Reimburse
This is the most consequential decision in the setup process. A QSEHRA can reimburse two categories of expenses:
- Individual health insurance premiums: the monthly cost of an employee's health insurance policies, including medical, dental, and vision
- Other medical expenses: deductibles, copays, coinsurance, prescriptions, and other expenses eligible under IRS Section 213(d)
Most employers choose to cover both, and the reasoning goes beyond simply offering more options. A QSEHRA is a health benefit designed for the entire eligible workforce; it's not primarily a premium reimbursement vehicle. Because most employers also exclude taxable premiums (more on that below), employees covered under a spouse or parent’s group plan often have no premiums to submit. If other medical expenses are also excluded, those employees may have little or no practical way to use the benefit. Covering other medical expenses is less about expanding the eligible expense list, and more about ensuring every eligible employee can meaningfully participate; otherwise, employers are paying to administer a benefit that a portion of their workforce can't realistically use.
The taxable premium exception. Premiums paid pre-tax through a spouse or parent’s employer cafeteria plan can't be reimbursed tax-free through a QSEHRA. Reimbursing them would create a taxable event, since the employee is already receiving a tax benefit on those premiums. Processing taxable reimbursements also requires running payments through payroll for withholding, which eliminates automated ACH.
Salusion recommends the first option for most employers, and it's the configuration most employers on the platform choose. If you're considering Premiums Only, Excluding Taxable Premiums, note that this configuration tends to leave a significant portion of the workforce without a usable benefit: employees covered under a spouse's group plan have no premiums they can submit, and other medical expenses aren't covered. Employers whose primary goal is reimbursing individual health insurance premiums are generally better served by an ICHRA.
Step 5 — Set Your Allowance Structure
How Allowances Work
A QSEHRA allowance is best understood as an annual benefit that employees access in monthly increments. During setup, you enter a monthly allowance amount; what Salusion is actually creating behind the scenes is the maximum benefit available for the full plan year.
Each month, your allowance amount accrues to the employee. Unused balances carry forward and remain available throughout the plan year. If an employee submits a claim larger than their current accrued balance, Salusion reimburses up to the amount accrued so far. The remaining balance becomes reimbursable when the next month's allowance accrues. For example: if an employee has a $400 monthly allowance and submits a $1,000 claim in February, Salusion reimburses $800 (January and February combined), and pays the remaining $200 automatically when March accrues.
At the end of the plan year, any remaining balance expires. Employees have a 75-day runout period after the plan year ends during which they can still submit expenses incurred during that year.
How Salusion Funds Reimbursements
Salusion doesn't pull the full annual allowance from your bank account upfront. Funds are only drawn when an approved reimbursement is actually being paid, so your cash outflow tracks with employees' actual healthcare spending rather than a fixed annual schedule.
Choosing Your Allowance Design
The IRS sets annual maximums for QSEHRA allowances. For 2026 plan years, those limits are $6,450 for self-only coverage and $13,100 for family coverage, or roughly $537 and $1,091 per month.
Salusion offers four allowance structures. Data from employers on the platform shows a strong preference for simpler designs:
While you can adjust your allowance amount at any time, changes are best made at renewal to avoid administrative complexity mid-year. For a detailed look at how employers on the platform typically set their allowance amounts, see Salusion's allowance benchmark data.
Step 6 — Choose Your Reimbursement Method
Once an expense is approved, Salusion offers two methods for getting funds to your employees:
Automated ACH is the standard choice for most employers. After Salusion reviews and approves an expense (typically the same day it's submitted), the reimbursement is processed according to the employer's selected ACH schedule. Employers can choose processing as expenses get approved or scheduled processing on the 5th and 22nd. For premium reimbursements, the upcoming month's QSEHRA allowance becomes available on the 17th of the preceding month, allowing an approved premium reimbursement to begin processing before the coverage month starts. Funds generally reach employees about five business days after processing.
Manual reimbursement is used when the employer handles reimbursements outside of Salusion, including when taxable reimbursements must be processed through payroll so the appropriate withholdings can be applied. Salusion provides reports showing what each employee is owed. Employers can choose to receive one report each month or reports twice monthly on the 1st and 16th.
Among plans using automated ACH, 72.1% use the daily reimbursement cadence and 27.9% use the twice-monthly cadence.
Beyond convenience, there's a compliance reason most employers choose automated ACH when it's available. Processing reimbursements through Salusion maintains a direct connection between the expense submitted, the approval, and the payment. The platform reconciles what was submitted, approved, and reimbursed, creating an audit trail that documents the full chain. When that process runs through payroll instead, the connection can break down; reimbursement amounts may be added to payroll without confirming that an eligible expense was submitted or that the employee maintained the required coverage. Over time, compliance can drift, and the documentation needed to substantiate payments may not exist if the plan is ever audited.
Regardless of which reimbursement method you use, QSEHRA allowances must be reported on employee W-2s at year end (Box 12, Code FF).
Step 7 — Set Up Your Reimbursement Account
This step asks for the bank account Salusion will use to fund employee reimbursements and charge its administrative fees. If you'd prefer to use a separate account for Salusion's fees, you can designate a different payment method at this step. If your bank uses Positive Pay, ACH filters, or account verification, you'll need to authorize Salusion's ACH Company IDs before completing setup to avoid rejected transactions. Salusion uses two separate IDs:
- Reimbursement funding: ACH Company ID 2844032944
- Billing: ACH Company ID 1844032944
If you're unsure whether your account has ACH restrictions in place, check with your bank before completing this step.
Step 8 — Review and Sign Your Agreements
Before your plan becomes operational, you must review and accept three documents: the Admin Services Agreement, the ACH Authorization, and Exhibit B (Salusion's fee schedule). To complete this step, you'll confirm that you're an authorized signatory for your company and that your business does not operate in a restricted industry. If you're not the authorized signatory, Salusion provides an option to route the documents to the appropriate person.
The Admin Services Agreement isn’t a long-term contract. Because HRAs can be modified or terminated by the employer at any time, the agreement is structured to accommodate that flexibility. For most employers, Salusion's services are month-to-month.
Once this step is complete, your plan is configured and active.
Step 9 — Add and Onboard Your Employees
With the plan configured and agreements signed, the final step is adding your employees. You can add them one at a time, or upload them in bulk using a template Salusion provides. For each employee, you set an eligibility date, mark them as enrolled, and send an invitation.
Once an invitation is sent, Salusion automatically:
- Creates the employee's account
- Sends all IRS-required plan documents and notices
- Collects proof of insurance, and/or connects uninsured employees to individual health insurance options if they don't have coverage
- Collects bank information for ACH transfers (if enabled)
- Reviews and approves submitted expenses on an ongoing basis
When an employee leaves the company, ending their enrollment is a single action in the platform. No further action related to that employee's enrollment is required.
Frequently Asked Questions
Can I start a QSEHRA mid-year?
Yes. A QSEHRA can begin on the first of any month. If you're already running a QSEHRA with a different administrator, you can also move your existing plan to Salusion mid-plan year.
What happens if an employee doesn't have health insurance when I launch the plan?
Employees must have minimum essential coverage before they can receive QSEHRA reimbursements; those without qualifying coverage can't submit expenses until they obtain it. Salusion can connect uninsured employees with individual health insurance options directly through the platform so they can get covered and start using the benefit.
Can I change my QSEHRA allowance after the plan year starts?
Employers can generally modify their QSEHRA settings at any time. The important nuance is that plan design changes are typically applied across the entire plan year rather than from the date the change is made, which can create administrative complexity. For that reason, most plan changes are made at renewal. If you need to make a mid-year change, Salusion's support team can walk you through the implications before you proceed.
What are the 2026 QSEHRA contribution limits?
For plan years beginning in 2026, the IRS maximum is $6,450 for self-only coverage and $13,100 for family coverage. These limits are adjusted each year for inflation. The full history of annual QSEHRA limits is available on the Salusion learning center.
Start Your QSEHRA Today
Every step in the Salusion setup workflow has a clear purpose. Understanding the logic behind each step makes the choices faster and easier, and the platform handles compliance, documentation, and reimbursements from there.
Start Your Company's QSEHRA with Salusion
