Using a Salusion ICHRA and QSEHRA with QuickBooks Online Payroll

For QuickBooks Online Payroll users, Salusion delivers a fully automated solution for funding ICHRA and QSEHRA reimbursements—no manual payroll entries required. While QuickBooks lets you process HRA reimbursements through payroll, over 90% of Salusion clients opt to have us handle distributions via ACH.

Why Automate HRA Reimbursements with Salusion?

Automating QSEHRA and ICHRA reimbursements with Salusion offers key benefits:

1. Hands-Free Administration: From plan documents and employee notices to expense capture, substantiation, and ACH reimbursements—every step runs automatically. Once your HRA is set up, there’s nothing left for the administrator to manage.
2. Elimination of Human Error: By removing manual data‑entry and spreadsheet juggling, you eradicate typos, missed submissions, and misplaced paperwork. Automation ensures every claim is processed accurately—every time.
3. Nightly Reconciliation & Audit‑Ready Records: Automated, end‑of‑day matching of expected reimbursements against completed ACH transactions gives you one unified ledger. You’ll have up‑to‑date, error‑proof records for month‑end close and compliance audits.

When Should Employers Use QuickBooks for HRA Reimbursements?

While most employers prefer automated ACH reimbursements, there are situations where using QuickBooks for HRA reimbursements makes sense. Specifically, with a Salusion QSEHRA, employers can choose whether to reimburse taxable premiums (premiums paid through a pre-tax payroll deduction by a spouse or parent through a cafeteria plan) or to exclude them from eligible expenses.

Most employers exclude taxable premiums to simplify QSEHRA administration. However, if you want to reimburse premiums for a spouse’s group coverage, those premiums will be taxable. This means you need to withhold the appropriate taxes, making QuickBooks a practical choice for processing these reimbursements.

Processing Taxable and Non-Taxable Reimbursements Through QuickBooks

If you choose to process taxable reimbursements through payroll, Salusion will provide a report detailing taxable and non‑taxable amounts, which you can upload into QuickBooks using a template customized to integrate seamlessly with QuickBooks.

Tax Reporting Considerations

ICHRA Tax Reporting

For ICHRAs, tax reporting is completely independent of payroll. Employers are required to generate Form 1094-B and Form 1095-B:

• Form 1094-B: This is a transmittal form submitted to the IRS along with Form 1095-B. It provides summary information about the employer's health coverage.
• Form 1095-B: This form is provided to employees and the IRS to report individuals covered under the ICHRA. It includes details such as employee and dependent coverage, start and end dates, and employer information.

Employers must ensure these forms are accurately completed and submitted to the IRS, as well as distributed to employees as required.

QSEHRA Tax Reporting

With a QSEHRA, payroll updates are necessary. Specifically, the employer must report the total amount made available to employees in Box 12, Code FF of the employee’s W-2. Salusion will provide a report with the necessary figures in December each year.

Updating W-2 Information in QuickBooks

1. Select Payroll, then select Payroll Taxes.
2. Select Filings.
3. Select Resources.
4. Select W-2s.
5. From Employee W-2s, select Edit Box 12/13 on W-2 Copies B, C, & 2 (employee).
6. Enter the dollar amount for each employee. Use Box 12FF to enter the allowance you made available to employees.
7. Select Submit.

Note: Add your QSEHRA allowance starting December 2 until you file them with the government.

For more details, refer to QuickBooks’s support guide: Report employer health insurance on W-2s.

Conclusion

Salusion’s automation of ICHRA and QSEHRA reimbursements significantly simplifies the administration process for employers using QuickBooks payroll. However, in cases where taxable premiums need to be reimbursed, integrating reimbursements into QuickBooks’s payroll system ensures proper tax withholding and compliance. By following the provided steps, employers can efficiently manage their HRA reimbursements while staying compliant with tax regulations.

For more information on QSEHRAs, visit our Salusion QSEHRA product page. 

For more information on ICHRAs, visit our Salusion ICHRA product page.