The pandemic has shined a light on a critical fact: affordable healthcare is essential.
This applies to everyone you know, including your nanny. The Affordable Care Act (ACA) says that only employers who have 50 or more full-time employees must provide health insurance to their employees. While household employers are not required to provide health insurance, contributing toward the cost of health insurance premiums may be a way to enhance an employee’s compensation package without increasing your or your employee’s tax liability.
- Health Insurance Stipend
- Health Reimbursement Arrangements (HRAs) in the form of QSEHRA, ICHRA
- Membership to the National Domestic Worker’s Alliance (NDWA)
Let’s discuss these options one by one.
Health Insurance Stipend
The first option is only available to household employers with only one employee. Individual Health Insurance Policy Contribution Household employers with 1 employee can contribute to their employee’s individual health insurance policy premiums and treat the entire amount as non-taxable compensation.
We recommend that families pay the insurance company directly. This will eliminate any possibility of the money being used for other purposes and will make life much easier in the event of an audit. If that’s not possible, we recommend getting copies of the monthly health insurance invoices.
Health Reimbursement Arrangements (HRA): QSEHRA, ICHRA
A Health Reimbursement Arrangement (HRA) is a health spending account that you own and provide to your nanny. The money in the HRA pays for medical, dental, and medication expenses as determined by you. There are some things you need to know about HRA.
- Only you, the employer, can put money into the HRA
- Money that comes from an HRA is tax-free
Two relevant HRA types are qualified small employer health reimbursement arrangement (QSEHRA) and an individual coverage health reimbursement arrangement (ICHRA). Both of these options are made specifically for employers with less than 50 employees. The main difference lies in the reimbursement limits: QSHERAs have a federal cap on how much you can reimburse. ICHRAs have no limits, but your employee must purchase their own health plan to participate.
Take Command Health (QSEHRA and ICHRA)
Take Command Health is a straightforward way to offer an HRA. The setup is simple and involves only three easy steps.
- Create your personal HRA and set up your monthly reimbursement amount. Take Command Health will take care of all the accounting.
- The next step is to onboard your nanny to the platform. They can shop for available plans or bring their own if they have one.
- Your nanny will request reimbursement from you. They can do this by simply snapping a photo on their phone. Take Command Health will send you a report of their expenses at the end of every month.
National Domestic Workers Alliance (NDWA)
For more variety in benefits, your nanny can join the National Domestic Worker’s Alliance (NDWA). NDWA is an association of nannies, house cleaners, and home care workers in the United States. For basic membership dues of $5 a month, your nanny can get a variety of benefits which includes events, entertainment discounts, and health benefits, including:
- Life insurance of $5,000 in case of accidental death.
- Vision discounts (for retail and doctor visits)
- Prescription discounts over an extensive network of pharmacies all over the country
- Discounted hearing tests and hearing aids for themselves and their families.
- Dental discounts from 5%-60% on a wide array of dental services. This type of discount is part of enhanced benefits, which your nanny can choose when they join.
Your nanny is one of your best allies in raising your children. They work hard to make sure your children get the best care. One way of showing they are valued is to ensure they have access to quality healthcare. If you currently employ a nanny, you ensure they are happy and appreciated, and feel their job is sustainable long-term. If you are hiring a nanny, offering insurance will make your job more competitive and desirable.
You can reach out to Seattle Nanny Network to get connected to any of these resources and don’t forget to follow up on social media!