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Small Business Employee Benefits and HR Blog

Using HRAs to Offer Health Insurance to 1099 Contractors

1099 health insuranceA common question we receive at PeopleKeep is: "Can I Offer a Qualified Small Employer Health Reimbursement Arrangement (HRA), or Small Business HRA to 1099 Contractors?"

The answer is no. Because 1099 Contractors are self-employed individuals rather than common law employees, they aren't eligible for the QSEHRA.

Instead, 1099 Contractors can deduct the cost of health insurance expenses on Form 1040, line 29. 

The QSEHRA is a good fit for nearly all other employees, though, including full-time and part-time staff and some business owners.

The Comprehensive Guide to the Small Business HRA

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