Health Reimbursement Arrangements

If you are offered a health reimbursement arrangement (HRA) by an employer to help pay for health insurance for 2027, you may not qualify for tax credits to help purchase a private health plan through MNsure. There are two types of HRAs that could affect your eligibility for tax credits through MNsure:

An individual coverage HRA (ICHRA)
A qualified small employer HRA (QSEHRA)

One of these terms will appear on the notice from your employer.

You should have received a written notice from your employer explaining the terms of the HRA you are offered. You will need that notice to update your application.

If you applied before July 1 2026, and you have an HRA, you should edit your application to include your HRA information.
After July 1 2026, enter your HRA information when you apply.

You will need to:

provide employer's name and address
specify QSEHRA or ICHRA
enter the maximum monthly amount the employer pays for the HRA for the employee only
enter the date the QSEHRA or ICHRA is available to you

FAQ about HRAs and Tax Credits

What is an ICHRA?
The individual coverage health reimbursement arrangement (ICHRA) is a program that enables employers to set up a company-funded benefit to reimburse consumers for personal health care expenses, including individual market coverage on or off the MNsure marketplace. ICHRAs are available to employers of any size, there are no benefit caps, and employers may vary eligibility and benefit amount by employee class.
- To use their ICHRA, consumers must purchase compatible individual health coverage or be enrolled in Medicare.
- Consumers offered "affordable" ICHRAs, or who accept their unaffordable ICHRA, are not eligible for advanced premium tax credits (APTC).
- For employees who are offered an "unaffordable" ICHRA and are eligible for APTC, the tax credit is generally larger.
What kind of coverage can I get with my QSEHRA or ICHRA?
- To use a plan on MNsure with your ICHRA or QSEHRA, you must choose a plan with “HSA” in the title. You can use “HSA” as a filter while shopping online. HSA stands for Health Savings Account. Only certain plans with high deductibles can be used with most HRAs. Talk to your employer or the HRA provider for more information about the types of plans you can use.
What is a QSEHRA?
The qualified small employer health reimbursement arrangement (QSEHRA) allows small employers to establish a company-funded benefit to reimburse consumers for personal health care expenses, including individual market coverage. QSEHRAs are available to employers with 50 or fewer employees.
- Employees offered QSEHRAs considered “affordable” are not eligible for advanced premium tax credits (APTC).
- If the employee accepts an “unaffordable” QSEHRAs, they must reduce their premium tax credit amount (if any) by the amount of the QSEHRA to avoid having to pay back money when filing taxes.
What if my HRA is "unaffordable?"
If your HRA is not large enough to make health insurance “affordable” based on federal standards, you may qualify for a tax credit to help you buy health coverage through MNsure based on your income and other factors.

Your options are different depending on whether your HRA is an ICHRA or a QSEHRA.

If you have an ICHRA

If you qualify for a tax credit:
- If you enroll with a tax credit, notify your employer that you are opting out of the HRA. You cannot receive both an ICHRA and a tax credit from MNsure. If you receive both, you may owe money back at tax time.
If you don't qualify for a tax credit:
- Your ICHRA can help pay for a plan on MNsure or similar coverage off MNsure. You can also use it if you're enrolled in Medicare. If you enroll in one of these types of coverage, inform your employer that you are accepting the ICHRA.
- If you enroll in any other coverage, including more limited coverage such as a short-term plan, or you decide not to purchase health insurance, you cannot use your ICHRA and must notify your employer that you are opting out.
- If your employer has offered you a "salary reduction agreement" to pay the share of health insurance premium not covered by the ICHRA, you may be better off using your ICHRA to buy an ACA-compliant plan outside of MNsure. Ask your employer about your options.
If you have a QSEHRA
If you qualify for a tax credit:
- You may use the tax credit along with your QSEHRA to help make coverage more affordable. But, to avoid having to pay back money when filing your federal taxes, reduce what you accept for a tax credit by your monthly QSEHRA amount.
If you do not qualify for a tax credit:
- You may still purchase health coverage through MNsure and use the QSEHRA to help pay for it.
Using your QSEHRA
- If you enroll in health coverage through MNsure or in other minimum essential coverage, inform your employer so you can use the QSEHRA.
What will disqualify me from getting tax credits through MNsure?

If your HRA is large enough to make health insurance “affordable” based on federal standards, you will not qualify for a tax credit through MNsure for yourself or any family member who is eligible to benefit from the HRA. But, you can use your HRA to help make purchasing coverage more affordable.

If your HRA is large enough to make health insurance “affordable”, and you wish to buy a plan through MNsure, do not accept a tax credit, or you may owe money back at tax time. You can fill out a MNsure application without financial help.

Note: If your employer has offered you a “salary reduction agreement” to pay the share of the health insurance premium not covered by the HRA, you may be better off using your HRA to buy an ACA-compliant plan outside of MNsure. Ask your employer about your options.