Certain small employers—generally those with less than 50 employees that don’t offer a group health plan—can contribute to their employees’ health care costs through a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA). Show
A QSEHRA allows small employers to provide non-taxed reimbursement of certain health care expenses, like health insurance premiums and coinsurance, to employees who maintain minimum essential coverage, including an individual Marketplace plan. In many states, QSEHRAs allow small employers to provide their employees additional plan choices without managing group health plan coverage. Note: A QSEHRA isn’t a traditional group health plan. For small businesses interested in offering traditional group coverage, learn more about SHOP plans and find out if SHOP is available in your state. Enrolling in SHOP is generally the only way to qualify for the Small Business Health Care Tax Credit, which can save eligible employers up to 50% of their employer contribution for 2 consecutive years. QSEHRA contributionsWith a QSEHRA, small employers can decide what they'll contribute to their employees’ health care costs, up to an annual maximum that is set by the IRS. Employees pay their provider or insurance company for their health care costs, then submit proof of payment to be reimbursed by the QSEHRA. Reimbursement is tax-free. If an employee doesn’t submit a claim, the employer keeps the money, though they may choose to roll it over from year to year while the employee is still employed by the business. Typically, QSEHRA amounts claimed by employees are paid monthly by their employer.
Generally, the QSEHRA amount you provide to your employees will affect the amount of premium tax credit your employees are eligible for with their Marketplace coverage. If you provide the QSEHRA to employees’ dependents, then it will affect the dependent’s premium tax credit eligibility, as well. They may be eligible for some or no tax credit depending on the QSEHRA amount you provide. Visit the IRS website to find out more about QSEHRA rules. How to start a QSEHRASmall employers can set up a QSEHRA at any time. To provide a QSEHRA you’ll need to give written notice to your new employees as soon as they’re eligible to participate and 90 days before the beginning of each plan year for current employees. This notice is required to include certain information–to learn more about what this notice must include, see IRS Notice 2017-67 (PDF, 211 KB). Note: Employees must have qualifying health coverage to use their QSEHRA amount. You may want to consider how your employees can get qualifying health coverage when picking a start date. For example, providing a QSEHRA starting on January 1 allows employees to choose coverage during the individual market’s annual Open Enrollment Period, and in most cases, plan deductibles reset on January 1 each year. If you’re newly providing a QSEHRA, your employees may qualify for a Special Enrollment Period. Newly hired employees who gain access to the QSEHRA may also qualify for a Special Enrollment Period to enroll in or change individual health insurance coverage outside of Open Enrollment. To enroll in coverage through this Special Enrollment Period, employees can submit an application on HealthCare.gov and include information about when their HRA can start. Get help: Talk to a licensed tax professional, benefits specialist, or health insurance agent/broker to find out if group coverage or QSEHRAs are right for your small business. Exploring coverage options?Compare QSEHRAs to other products and services that may be available to help you cover your employees. Take me to the HRA decision guide Employees: Understanding QSEHRAsIf you’re an employee who has been provided a QSEHRA by your employer:
Every New Mexico employer with three or more employees is required to provide their employees with workers’ compensation insurance. This policy covers costs related to workplace injuries and occupational diseases. Who needs workers’ comp insurance in New Mexico?New Mexico imposes strict workers’ compensation insurance rules on employers. All businesses with three or more employees must provide workers’ comp coverage, and construction businesses of any size are required to carry coverage. What determines the number of employees for the “three employees or more” benchmark? The state considers every individual who performs the business entity’s work to be an employee. If you’re a business owner and work in the business, then you are considered an employee for meeting the “three or more” test. Business owners must also count part-time workers, seasonal workers, and out-of-state workers in the coverage requirement. Once you have three part-time employees, they must receive workers’ comp coverage. Which workers are excluded from workers’ comp requirements?New Mexico strives to maintain near-universal workers’ comp coverage. This means that all employees working in the state must be covered by workers’ comp insurance, except for:
The state of New Mexico encourages employers to voluntarily purchase insurance even when it's not required. This will protect their companies from lawsuits. To secure voluntary coverage, employers in an exempt category must first file an Election to be Subject form [PDF] with the WCA. For details, visit the State of New Mexico Workers' Compensation Administration (WCA). Are nonprofits exempt from New Mexico workers’ comp requirements?Nonprofits and religious organizations aren’t exempt. The coverage requirements are identical to all other employees, and employers should adhere to the same safety practices as any other employer. Compare workers' compensation quotes for New Mexico businesses Do New Mexico business owners need to be included in workers’ compensation coverage?Business owners should always consider buying workers' comp for themselves for the financial protection it provides. For example, a sole proprietor's health insurance provider could deny a claim for a work-related injury, leaving them paying for expensive medical bills. Workers' comp helps pay for treatment and also supplies part of the wages lost while recovering and unable to work. As for when it's required by law, it depends on what type of business owner you are. Here’s how New Mexico business owner requirements work: Sole proprietors and partners can opt out, with approval. They can elect to include themselves in their firm’s insurance policy should they find it beneficial. Corporate officers are also exempt. This applies to executives serving as chairman of the board, president, vice president, secretary, treasurer, or other executive officer and only to those owning 10% or more of the corporation’s stock. To activate an exemption, corporate officers must file an Executive Employee Exemption form [PDF] with the New Mexico Workers’ Compensation Administration. Members of a limited liability company (LLC) also qualify for a workers’ comp exemption, as long as they own 10% or more of the LLC. Even though owners and executives can qualify for an exemption, they must be counted as employees to determine whether their firm must provide workers’ comp to its other employees. For example, in a firm with one owner and two other employers, the owner must provide workers’ comp to the two employees. How much does workers' compensation insurance cost in New Mexico? Estimated employer rates for workers’ compensation in New Mexico are $1.32 per $100 in covered payroll. Your cost is based on a number of factors, including:
How does workers’ comp work in New Mexico?Workers' compensation insurance covers the cost of medical care for employees who suffer a workplace injury or occupational disease. In addition, it provides indemnity benefits for employees who miss out on wages due to injury or impairment. The New Mexico Workers' Compensation Act provides benefits to injured workers regardless of who was at fault. Workers' compensation benefits include:
Policies usually include employer's liability insurance, which helps cover legal expenses if an employee blames their employer for an injury. However, the exclusive remedy provision in most workers' comp policies prohibits an employee from suing their employer if they accept workers' comp benefits. For details, visit the Workers' Compensation Administration's Information for Employers page. How is workers' comp coverage purchased in New Mexico?New Mexico business owners can compare quotes and purchase a policy from private insurance companies. Insureon offers this service with its online insurance marketplace. If your firm’s high-risk status makes it impossible to purchase workers’ comp insurance through the voluntary market mentioned above, you can purchase coverage from the New Mexico assigned risk pool. Many new small businesses buy this coverage until they have a track record to apply for insurance in the commercial market. However, assigned risk workers’ comp is more expensive than voluntary-market insurance. The National Council on Compensation Insurance (NCCI) manages New Mexico’s assigned risk insurance pool, serving as the state’s workers’ comp provider of last resort. New Mexico employers who qualify can self-insure their workers’ compensation claims. This means they’ll pay for their own workers’ comp claims rather than submit them to an insurance company. To qualify for self-insurance, you must file an application with the New Mexico Workers’ Compensation Administration and receive written approval from the WCA director. Alternatively, firms in the same or similar industries can band together in a group self-insurance arrangement. This normally occurs under the auspices of an industry association. As with individual-firm self-insurance arrangements, the WCA director must approve the formation of any group self-insurance programs. What are the penalties for not having workers’ comp in New Mexico?The consequences of failing to comply with New Mexico’s workers’ compensation rules include:
Workers’ compensation death benefits in New MexicoIn New Mexico, a deceased employee’s survivors can receive death or survivor benefits if the worker has died as a result of a job-related injury. Death must occur within two years of the injury date. The maximum death benefit is the amount the worker would have received in temporary total disability benefits for 700 weeks. In addition to this amount, New Mexico workers' comp death benefits include $7,500 for funeral expenses. Only spouses, dependent children, or other family members who were dependent on the worker may receive death benefits. Workers’ comp settlements in New MexicoA workers’ compensation settlement is an agreement between the injured employee, employer, and insurer that resolves a workers’ compensation claim. This benefits both the employee and the employer. In New Mexico, many workers’ comp claims end in settlements. This means the parties to the claim – the injured employee, the company, and the insurer – must agree on a lump-sum payment in return for the employee (or the employee’s survivors) agreeing to forgo future payments. Employees who wish to enter into an agreement to take a lump-sum payment in lieu of future benefits, including their right to future medical treatment, must file a Petition for Lump Sum Payment [PDF]. However, the state only grants this petition in a few specific situations. The New Mexico Workers’ Compensation Administration must approve all settlements. New Mexico workers’ compensation law for statute of limitationsIn New Mexico, employees must file a workers’ comp claim within one year after the employer's insurance provider has started (or failed) to pay them. Compare free workers’ comp quotes with InsureonUpdated: August 18, 2022 Compare workers' comp insurance quotes Save money by comparing insurance quotes from multiple carriers. What kind of work do you do? EXPLORE ON INSUREON TOPICS
What is the minimum number of employees needed for a small employer medical expense plan?Have fewer than 50 full-time employees.
What is the minimum number of eligible employees that a small employer can have?Generally, employers with 50 or fewer employees may be eligible to buy coverage through the Small Business Health Options Program or (SHOP Marketplace).
What is the minimum number of employees required to be covered under a group medical insurance plan?Number of employees matters
To be eligible for small business health insurance, a company must have between one and 50 employees. That is considered a small business for purposes of purchasing group health insurance. If you have more than 50 employees, you'll need to: apply for large group coverage.
Does ACA affordability apply to small employers?More In Affordable Care Act
Some of the provisions of the Affordable Care Act, or health care law, apply only to small employers, generally those with fewer than 50 full-time employees, including full-time equivalent employees.
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What is the minimum number of employees needed for a small employer medical expense plan in New Mexico?
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