Section 105 Medical Reimbursement Plan for Behavioral Health & Therapy Practices in Miami, FL

Miami's Behavioral Health Market: Dense, Growing, and Underinsured

Miami has emerged as one of Florida's most active markets for behavioral health services. As of early 2026, the city hosts at least 112 active behavioral health providers across 13 organizational practices and 99 individual practitioners — making it one of the highest-density mental health markets in the state. Practices ranging from solo licensed mental health counselors (LMHCs) working out of Brickell or Coral Gables offices to multi-therapist group practices in Miami Lakes and Hialeah are all grappling with the same operational challenge: how to offer competitive health benefits to attract and retain licensed staff without committing to the cost and administrative burden of traditional group health insurance.

The answer for most small behavioral health practices in Miami is a Section 105 medical reimbursement plan — specifically a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) or an Individual Coverage HRA (ICHRA). These tools let the practice owner set a monthly budget, reimburse employees tax-free for their individual health insurance premiums and qualified medical expenses, and deduct the full amount as a business expense.

Why Section 105 Plans Matter Specifically for Behavioral Health Practices

Behavioral health and therapy practices have a staffing profile that makes traditional group health insurance especially difficult to implement. Most Miami therapy practices have between one and eight employees — below the ACA's 50-employee threshold for mandatory employer coverage. Many employ a mix of full-time licensed therapists, part-time intake coordinators, and contract billing staff. This composition often makes it impossible to meet minimum participation requirements (usually 70%) that carriers impose on small group plans.

Additionally, Miami-Dade County's highly bilingual, multicultural workforce means therapists often have pre-existing insurance relationships — coverage through a spouse's employer plan, Medicaid, or an individual ACA marketplace plan. A group health plan forcing everyone onto the same carrier disrupts these existing arrangements. A QSEHRA or ICHRA, by contrast, allows each employee to keep their current coverage and receive a tax-free reimbursement on top of it. The practice gets a 100% deduction; the employee gets tax-free cash applied to a plan that actually works for them.

How to Set Up a Section 105 QSEHRA: Step-by-Step for Miami Practices

1. Confirm eligibility: Your practice must have fewer than 50 full-time equivalent employees and cannot offer a group health plan to any employees in the same plan year. Most Miami behavioral health practices qualify easily.
2. Set contribution amounts: Choose a monthly reimbursement allowance up to IRS limits — for 2026, $529/month for self-only and $1,067/month for family coverage. You can offer different amounts to different employee classes (e.g., full-time vs. part-time).
3. Draft a written plan document: Federal law requires a formal written plan document describing benefit terms, eligibility, and reimbursement rules. This document must be created before the plan takes effect.
4. Provide required notice to employees: You must notify eligible employees at least 90 days before the plan year begins (or within 90 days of the employee becoming eligible). The notice must explain the reimbursement amounts and explain how it affects ACA marketplace premium tax credits.
5. Employees submit proof of coverage and expenses: Employees provide their insurance premium statements or qualified medical expense receipts. Reimburse only after reviewing the substantiation.
6. Document and deduct: Reimbursements are deducted as a business expense on your practice's tax return. Employees exclude the reimbursements from gross income on their personal returns.

Florida-Specific Rules and Costs for Miami Behavioral Health Practices

No Florida state income tax: Florida is one of a small number of states with no state income tax, which means every dollar of tax-free reimbursement through a Section 105 plan saves only federal taxes — but saves them fully. A Miami therapist practice in the 24% federal bracket saves $0.24 per dollar of qualifying reimbursement. The employer avoids the 7.65% employer share of FICA on reimbursements as well.

Miami-Dade business tax receipt: Miami-Dade County requires all businesses, including behavioral health practices, to obtain and renew an annual Local Business Tax Receipt. For professional practices, this typically costs $50–$150 per year depending on the business size classification. This is separate from Florida professional licensing fees and is a deductible business expense.

Florida professional licensing: Licensed mental health counselors (LMHCs), licensed clinical social workers (LCSWs), and licensed marriage and family therapists (LMFTs) must renew their Florida licenses every two years. Renewal fees run approximately $125–$155 per license. These licensure costs are deductible business expenses and are separate from the Section 105 plan structure.

ACA marketplace coordination: Miami-Dade County residents have access to a robust ACA marketplace with multiple carriers including Florida Blue, Ambetter, and Molina. When employees enroll in marketplace plans and receive QSEHRA reimbursements, they must reduce their premium tax credit by the QSEHRA allowance amount. This coordination is important to communicate clearly at enrollment time to avoid surprises at tax filing.

For a broader look at Florida small business health insurance options, including which carriers are active in Miami-Dade, visit our small business resource hub. You can also compare individual plans on Florida Plan Finder.

Common Mistakes Miami Behavioral Health Practices Make with Section 105 Plans

• Offering a group health plan simultaneously: A QSEHRA is automatically disqualified if the employer offers any group health plan to any employee in the same plan year. Some Miami practices inadvertently maintain a dental or vision group plan while trying to set up a QSEHRA — this invalidates the QSEHRA. Separate vision and dental coverages generally do not create a conflict, but any major medical group plan does.
• Failing to provide the 90-day advance notice: The IRS requires employees to receive formal written notice of the QSEHRA terms at least 90 days before the plan year begins. Many Miami practice owners set up the plan on January 1 but forget to notify employees in October. Failing to provide timely notice does not invalidate the plan, but it exposes the employer to a $50-per-day-per-employee excise tax.
• Reimbursing employees who lack minimum essential coverage (MEC): QSEHRA reimbursements are only tax-free if the employee is enrolled in a plan that qualifies as minimum essential coverage. Reimbursing an employee who let their coverage lapse triggers income tax and payroll tax on the reimbursed amount. Miami practices should verify employee coverage status at the start of each plan year and periodically throughout.
• Ignoring the ICHRA as an alternative: The ICHRA (Individual Coverage HRA) has no contribution limits and can be offered by employers of any size. For a Miami behavioral health practice that has grown beyond 49 employees, or one that wants to offer different reimbursement tiers to different employee classes, an ICHRA may be more appropriate than a QSEHRA. Many owners set up a QSEHRA at founding and never revisit the structure as the practice grows.

Frequently Asked Questions