Offering healthcare plans ICHRA & QSEHRA are a powerful way for employers to provide flexible, tax-free healthcare benefits while maintaining cost control all on its own without the need for traditional costly group insurance. But what exactly do they cover?

Common eligible expenses include medical services such as doctor visits, prescription medications, and preventive care. Dental and vision care—like teeth cleanings, eyeglasses, and contact lenses—are also typically reimbursable.

Beyond basic healthcare, ICHRA & QSEHRA plans may also cover mental health services, chiropractic care, and certain alternative therapies. However, eligible expenses can vary based on the specific plan design, making it essential for employers to define clear reimbursement policies.

In this guide, we’ll break down the most common reimbursable expenses, key compliance considerations, and how ICHRA & QSEHRA can help businesses optimize their benefits strategy.

Here are some of the most common eligible expenses & reimbursements:

ICHRA & QSEHRA cover IRS-approved medical expenses outlined in IRS Publication 502.

✔ Medical & Preventive Care

• Doctor visits & specialist appointments
• Preventive care (annual checkups, screenings, vaccines)
• Prescription medications

✔ Dental & Vision Care

• Routine dental exams, cleanings, and fillings
• Eyeglasses, contact lenses, and eye exams
• Orthodontics (braces, retainers)

✔ Mental Health & Alternative Therapies

• Therapy & counseling services
• Chiropractic care & acupuncture
• Smoking cessation & weight-loss programs (if prescribed)

✔ Out-of-Pocket Healthcare Costs

• Health insurance premiums (for ICHRA & QSEHRA)
• Deductibles, copays, and coinsurance
• Medical equipment (wheelchairs, crutches, CPAP machines)

For a full list of eligible medical expenses, refer to the official IRS Publication 502 or check out this IRS-Approved Medical Expenses Chart.

Understanding MEC Requirements for ICHRA & QSEHRA: What Employers Need to Know.

Offering an ICHRA or QSEHRA is a great way for employers to provide healthcare benefits while maintaining cost control. However, understanding Minimum Essential Coverage (MEC) requirements is critical to ensure compliance and avoid tax penalties.

What is Minimum Essential Coverage (MEC)?

MEC is the baseline level of health coverage required under the Affordable Care Act (ACA). It includes:

• Employer-sponsored group health plans
• Individual marketplace plans
• Medicaid or Medicare
• TRICARE, CHIP, and other government programs

MEC ensures that employees have adequate health coverage, reducing the risk of penalties and unexpected medical costs.

Does HRAs plan types ICHRA & QSEHRA Require MEC?

The need for MEC depends on the type of HRA offered. Here’s how MEC applies:

Why Does MEC Matter for HRAs?

For employers, ensuring employees meet MEC requirements is important for:
✔ Tax Benefits – Employees without MEC may have taxable reimbursements.
✔ Compliance – HRAs like QSEHRAs and ICHRAs require employers to verify MEC status.
✔ Employee Health Security – MEC ensures employees have adequate coverage for medical needs.

Maximizing Your Business’s Benefits Strategy with ICHRA & QSEHRA

Healthcare Contribution Plans (HCP) such as ICHRA & QSEHRA offer businesses a cost-effective and flexible alternative to traditional group health insurance, allowing employers to tailor benefits to their workforce while maintaining financial control. Unlike fixed-premium group plans, HCPs enable businesses to set their own budget and reimburse employees only for actual medical expenses, reducing unnecessary spending. Additionally, ICHRA & QSEHRA contributions are 100% tax-deductible for employers and tax-free for employees, maximizing savings for both parties.

By offering an ICHRA or QSEHRA, businesses can attract and retain top talent by providing competitive, personalized healthcare benefits without the administrative burden of managing a complex group plan. This flexibility allows employers to design a benefits package that aligns with their goals while ensuring employees have access to quality healthcare options.