PeopleKeep Data Shows Employers Offering QSEHRA Increased Allowance Amounts by 47% In Tight Labor Market

PeopleKeep’s fifth annual usage report on the qualified small employer health reimbursement arrangement (QSEHRA) shows that employers are investing more dollars into personalized benefits, with average allowances to employees increasing 28% since last year and 47% since 2019.

With healthcare costs on the rise and the Great Resignation causing employees to quit in droves, small employers are using their QSEHRA benefit to combat these challenges, increasing their contributions in order to recruit and retain top talent.

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The full report, which includes data from over 2,300 small employers, uncovers many details on  how employers used the QSEHRA in 2021, including how reimbursement allowances are used by their employees. In many cases, employees used their QSEHRA benefit to purchase individual health coverage from providers including Blue Cross Blue Shield, Kaiser Permanente, and Medicare.

Other key findings from the report include:

• The average reimbursement for health insurance premiums (including major medical, dental, vision, or Medicare) was $433.
• Out of employees who received reimbursements, 71% of their allowance gets used, leaving the remaining 29% with the employer.
• Employers who have offered a QSEHRA since 2017 provided 26% more in allowances than employers who started offering a QSEHRA through PeopleKeep in 2021.
• The QSEHRA is the first health benefit offered to employees for nearly 9 out of 10 employers.

“As healthcare costs continue to rise, small and medium-sized employers are meeting this challenge by increasing the average allowance amounts they offer to employees year over year,” explains Victoria Hodgkins, CEO of PeopleKeep.

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“For most employers, offering a QSEHRA is a vital ‘on-ramp’ to providing a health benefit. As they gain more experience, they increase allowances and expand the benefit to cover additional costs in subsequent years. This report demonstrates that while small and medium-sized businesses struggle to find a flexible and economical way to start offering a health benefit, once they do, they are generous with their contributions and are able to use it as a valuable retention and recruiting tool.”

As the first company to bring cloud-based QSEHRA administration to market and a leader in personalized benefits solutions for small and medium-sized businesses, PeopleKeep is uniquely positioned to share expert insights on how employers nation-wide used the QSEHRA.

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