A lot of nannies are looking for benefits packages that include health insurance. However, health insurance for nannies isn’t as straightforward as it might be for your average 9-5 employee.

Many nannies are not offered health insurance or if they are it’s not as straight forward as some health insurance benefits.

Here are some of the caregiver health insurance options you may be offered as a nanny:

• Group, or employer-sponsored, insurance
• Qualified Small Employer Health Reimbursement Arrangement (QSEHRA)
• Individual Coverage Health Reimbursement Arrangement (ICHRA)
• Individual or family health insurance
• Medicaid or other government plans
• Short-term insurance plans

Now let’s take a look at how to navigate the health insurance options for nannies, long-term babysitters and other caregivers.

Why health insurance is essential for nannies and caregivers

Health insurance is crucial for nannies and caregivers, professions that involve significant physical and emotional responsibilities. Given the nature of their work, which often requires physical tasks like lifting and moving, alongside the emotional labor of caring for others, maintaining optimal health is essential. Health insurance ensures that nannies and caregivers can access necessary medical services without hesitation, which is vital not only for their well-being but also for the effective performance of their duties.

Moreover, having health insurance provides critical financial protection against potentially overwhelming medical expenses. Unexpected injuries or illnesses can result in significant costs, and without coverage, these expenses could be devastating. For nannies and caregivers, who may not have high incomes, this financial safety net is essential to prevent medical bills from becoming crippling debts.

From a legal and ethical standpoint, employers who hire nannies and caregivers also need to consider providing health insurance. Offering such benefits is not only a moral responsibility but can also be a legal requirement in some regions. Furthermore, providing health insurance helps in attracting and retaining high-quality staff, ensuring that caregivers are supported and motivated, thereby fostering a stable and committed caregiving environment. Employers who invest in the health and security of their employees can also see a decrease in turnover and an increase in job satisfaction and loyalty among their staff.

Benefits of providing health insurance to caregivers

Providing health insurance to caregivers offers a multitude of benefits, impacting not just the wellbeing of the employees but also the overall functionality and appeal of the workplace. One of the most significant advantages is improved job satisfaction and retention. When caregivers feel valued through benefits like health insurance, they are more likely to stay loyal to their employers, reducing turnover rates and the costs associated with hiring and training new staff.

Health insurance also leads to better overall health and productivity among caregivers. With access to preventive care, regular check-ups, and necessary medical treatments, caregivers are less likely to take sick days and more likely to perform at their best. This not only ensures a higher quality of care for clients but also enhances the caregiving environment as a whole.

Furthermore, offering health insurance helps attract high-quality caregivers. In a competitive job market, benefits like health insurance make positions more attractive to top candidates who seek employers that support their health and well-being. This can be particularly important in caregiving roles, where the physical and emotional demands are high, and the quality of care is critical.

Lastly, there are considerable tax benefits for employers who provide health insurance. In many cases, the costs associated with offering health insurance are tax-deductible, and there are additional tax incentives available under specific healthcare acts and local regulations. These financial advantages make providing health insurance not only beneficial for employee welfare but also a savvy business decision.

By offering health insurance, employers in the caregiving sector can enhance their operational effectiveness, improve caregiver loyalty, and attract the best talent, all while enjoying financial perks through tax benefits.

Types of health insurance for nannies and caregivers

Employer-sponsored health insurance

While it is not common, your position as a nanny or caregiver may come with health insurance benefits. A group insurance plan, also called employer-sponsored health insurance, allows you and your employer to split the cost of your health insurance premiums.

This is an attractive benefit that can help keep and retain talent if you are looking to hire a nanny. If you are looking for a position as a nanny or caregiver, this may be a deciding factor in choosing to take the job as health insurance is one of the top benefits people look for.

Individual health insurance plans

Individual health insurance plans are a popular choice for nannies and caregivers, offering flexibility and a variety of coverage options tailored to personal health needs. These plans are purchased directly from insurance providers or through a broker, and they come in different levels of coverage—bronze, silver, gold, and platinum—each varying in premiums, deductibles, and out-of-pocket costs. This type allows caregivers to choose a plan that fits their budget and healthcare requirements, ensuring that they have access to necessary medical services without being tied to employer-sponsored plans.

Health insurance marketplaces (ACA plans)

The Affordable Care Act (ACA) health insurance marketplaces provide another viable option for nannies and caregivers. These marketplaces offer a range of plans that are standardized to cover essential health benefits like preventive care, emergency services, and maternity care. Shopping through the ACA marketplace is particularly beneficial during open enrollment periods, as caregivers can compare plans from different insurers to find the best rates and coverage. Additionally, depending on their income, caregivers may qualify for subsidies to help lower the cost of premiums, making comprehensive health care more accessible and affordable.

Short-term health insurance plans

Short-term health insurance plans can be a suitable option for nannies and caregivers needing temporary coverage between finding comprehensive plans. These plans are designed to fill gaps in insurance for people who are between jobs or waiting for other coverage to start. While short-term plans typically cost less than traditional health insurance, they cover less and do not offer coverage for pre-existing conditions or include all essential health benefits. These plans are not a replacement for regular health insurance but can provide a temporary safety net. The coverage duration of short-term plans is explicitly temporary, limiting the length of the initial contract term to no more than three months and the maximum coverage period to no more than four months, taking into account any renewals or extensions.

Medicaid and other government programs

For nannies and caregivers with limited income, Medicaid and other government health programs can provide necessary health coverage at little or no cost. Medicaid eligibility is based on income and family size and offers comprehensive coverage including doctor visits, hospital expenses, and even long-term care. Other programs, like the Children’s Health Insurance Program (CHIP), can also be available for caregivers with children, providing extensive health coverage for families who may not qualify for Medicaid but still need assistance. These programs are crucial for offering health support to caregivers who give so much to the well-being of others.

Tax advantaged health benefit options

It’s important to keep in mind that clients and household employees are typically looking for health insurance options that are tax advantaged.

There are two options that you may be offered as health insurance for nannies: a qualified small employer health reimbursement arrangement (QSEHRA) or an individual coverage health reimbursement arrangement (ICHRA).

Both of these types of health insurance arrangements are specifically for small employers who are not necessarily offering group insurance. Since nannies and other caregivers are typically employed by small employers, these are common types of arrangements are offered as a part of the benefits package.

Let’s go over both of them:

Qualified Small Employer Health Reimbursement Arrangement (QSEHRA)

A qualified small employer health reimbursement arrangement, or QSEHRA, is a tax-free health benefit that allows employers to reimburse employees for health care expenses. These reimbursements are typically free of income tax and payroll tax.

With a QSEHRA, you would spend money on qualified health expenses and your employer would reimburse you. It’s also important to note that there is a yearly maximum that your employer can reimburse you for that is set by the government.

There are more than 200 expenses that are eligible for reimbursement through the QSEHRA.

These include:

• Individual health insurance premiums
• Individual dental premiums
• Individual vision premiums
• Copays
• Deductibles
• Prescription and OTC drugs

For a more detailed look at the QSEHRA, you can read our more comprehensive article.

Individual Coverage Health Reimbursement Arrangement (ICHRA)

An individual coverage health reimbursement arrangement, or ICHRA, is another tax-free health benefit that allows employers to reimburse employees for health care expenses.

With an ICHRA, employers can set an allowance cap that you cannot exceed. However, there are no laws that manage how much they can reimburse you for.

If you are offered an ICHRA, you must purchase your own individual health insurance to participate in the program. Continue reading to see how eHealth can help you find the right individual health insurance plan.

Like a QSEHRA, you can be reimbursed for your premiums and other out-of-pocket expenses. To learn more about ICHRAs, read our detailed articles on the topic.

FAQS about health insurance for nannies and caregivers

How do I enroll in individual health insurance as a caregiver?

If you are offered an ICHRA, or you aren’t offered any health benefit, you may need to purchase your own health insurance and not know where to start.

A great place to start shopping for health insurance is with eHealth, which is the nation’s first and largest health insurance brokerage. Our online tools and expert agents can help you find the right caregiver health insurance for your specific budgetary and health care needs.

You can purchase individual health insurance during the open enrollment period. The annual open enrollment period typically runs from November 1st through December 15th of every year for insurance starting January 1st of the following year.

However, some states have expanded this open enrollment period. The following states have permanently expanded their open enrollment period from November 1st through January 31st of the following year:

• California
• Washington D.C.

The only way you can enroll in health insurance outside of the open enrollment period is by qualifying for a special enrollment period by experiencing a qualifying life event.

Some examples of qualifying life events are:

• Your employer offering to help with the cost of health insurance
• Losing coverage through your job
• Moving outside of your plan’s coverage area

This means that if you’re starting a new job, you may be able to enroll in health insurance outside of the open enrollment period. If you qualify for a special enrollment period, you will typically have 60 days to enroll. Get the process started with help from eHealth.

If you need some sort of insurance before you can enroll in health insurance at the end of the year, you can buy short-term health insurance in some states to help bridge your coverage gap.

What are some alternatives to traditional health insurance?

Exploring alternatives to traditional health insurance can lead to cost-effective and flexible solutions for managing healthcare expenses. Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) offer tax advantages by allowing pre-tax dollars to be set aside for medical expenses, applicable to a range of out-of-pocket costs including prescriptions and deductibles. HSAs are particularly beneficial for those with high-deductible plans due to their rollover capability, while FSAs are ideal for use within a calendar year under employer sponsorship.

Additionally, discount health plans and medical discount cards provide an option to access medical services at reduced prices from participating providers, useful for non-insurance holders looking for savings on dental, vision, and prescription costs. Telehealth and virtual care have also emerged as practical alternatives, offering remote consultations and treatments that save time and potentially reduce healthcare costs. These alternatives each have unique benefits, making them suitable for different health needs and financial situations.