When you hire a new nanny, you hope they will stay with the family for many years. You might dream of watching this individual grow alongside your children.
Retaining competent, qualified domestic staff members means going above and beyond to ensure their comfort and happiness. One way to accomplish this is by providing your nanny with health insurance. This extra layer of consideration will provide peace of mind. Furthermore, it will demonstrate that you care for your nanny as an individual.
We’ve created this guide to explain your options for offering your nanny health insurance and benefits. We’ll explore the pros and cons of each option. Continue reading to learn how to earn loyalty and retain your cherished domestic childcare staff.
How to Give Your Nanny Health Insurance
As an employer, you are not required to offer health insurance to your domestic employees. With that said, the top domestic employers tend to offer benefits to their nannies and childcare staff. There are four basic ways to contribute to your nanny’s insurance. You’ll be taking the burden off one of your most dedicated, hardworking employees.
1. Contribute to Their ICHRA
ICHRA stands for “Individual Coverage Health Reimbursement Arrangement.” In essence, you will provide a monthly, tax-free allowance to cover the cost of medical insurance. It is an ACA-compliant option that offers your nanny a sense of freedom over their coverage. There is no upward limit to how much you can contribute.
The allowance can cover insurance or other medical expenses. This includes Medicare Parts A and B or Medicare Part C.
The only potential negative is that ICHRA only covers individual health insurance. A nanny cannot participate in their spouse’s group plan unless you also employ their spouse. You must offer an ICHRA contribution to every employee in a given class of employees.
2. Contribute to Their QSEHRA
QSEHRA stands for “Qualified Small Employer Health Reimbursement Arrangement.” This is an annual, tax-free contribution of up to $5,850. These funds go toward health insurance premiums or other health expenses. Your nanny must provide a receipt so you can provide reimbursement.
Employees have the choice to opt out of receiving QSEHRA funds. As with ICHRA, they get to retain a great deal of freedom over their healthcare. However, you cannot offer QSEHRA with a group plan.
You must have fewer than 50 full-time employees in order to offer this benefit.
3. Paying For Nanny Health Insurance With a Stipend
If your nanny is your only household employee, you may choose to contribute to their health insurance premiums directly. This is essentially non-taxable compensation for both you and your nanny. This can save both you and your nanny the burden of paying taxes on those funds each year.
If you choose this option, you will make payments directly to your nanny’s health insurance company. This is efficient and protects you in the event of an audit.
4. Provide SHOP Insurance to All Domestic Staff
SHOP stands for “Small Business Health Options Program.” You will set up a group policy via the official healthcare.gov insurance marketplace. If you choose this route, you must offer insurance to all of your employees.
As a bonus, you may qualify for a generous tax credit. You can receive this perk if you contribute to your employee’s health insurance premiums.
Meet Your New Favorite Staff Member
Offering your prospective nanny health insurance will attract more knowledgeable, qualified candidates. These warm, competent individuals will offer your children a higher level of attention and care.
Plus, when nannies have everything they need to live comfortably, they will be more likely to remain with your family for years. It is one of the simplest steps you can take to increase retention and workplace satisfaction.
The first step is finding high-quality talent. At Household Staffing, we take the work out of discovering your ideal nanny, newborn care specialist, or nanny-housekeeper. Our attention to detail will ensure you can meet and vet strong candidates every time. Many of our clients hire a new staff member within a week.
Begin the hiring process today and watch your family thrive.