8810 / When is an employee eligible to participate in a QSEHRA?

those who have not completed 90 days of service with the employer;

those who are younger than 25 at the beginning of the plan year;

part-time or seasonal employees (see below);

certain nonresident aliens (with no U.S. source income); and

employees covered by a collective bargaining agreement under which health benefits were the subject of good faith negotiation.

Part-time employees generally include those who work less than 35 hours a week and seasonal employees are those who work less than nine months of the year (if others in similar work with the same employer work substantially more hours or moths). A safe harbor exists for employees who work either less than 25 hours per week or seven months per year.

The QSEHRA may be provided only to current employees, and it may not be provided to non-employee owners. The employer must provide the QSEHRA to an employee on the day immediately following the day following the date an employee is not in a category of excludable employee.¹

Planning Point: Employees may not waive their right to participate in the QSEHRA, meaning generally that the employer must provide the QSEHRA, rather than offer the QSEHRA.

1. Notice 2017-67.