Short answer: Yes. QSEHRA funds can reimburse individual-market premiums and other qualified medical expenses tax-free, as long as the employee has minimum essential coverage and substantiates the expense.
A core purpose of the QSEHRA is to let employees buy their own individual coverage and be reimbursed tax-free, up to the annual limit. Employees can also use QSEHRA funds for other qualified medical expenses. Two conditions apply: the employee must have minimum essential coverage, and they must substantiate expenses. Note that a QSEHRA can reduce or eliminate an employee’s premium tax credit depending on whether the QSEHRA is considered affordable.