To Cover or Not to Cover? Health Care Insurance for Your Nanny

nanny health insurance paper

Updated

When Mike, a 42-year-old marketing executive, got the call from his nanny that she had broken her foot while at a playground with his children, his first thought was logistics.

"I had to get a friend to drive me to the park so I could take her in her car to the hospital, while my friend took my kids home for me," he says. "But when I got to the playground, my nanny refused to go to the hospital because she doesn't have health insurance and preferred to wait until the walk-in-clinic opened the next day."

While his nanny spent a painful night nursing her foot at home, Mike and his wife Laura wondered about the ramifications of the accident.

"Besides having to find backup childcare for as long as it would take her to heal, we weren't sure what our obligations were to her," he explains. "When we first hired her, we had offered a salary package that included contributions to health care, but she preferred to risk it for a higher take-home pay."

While there are no statistics on just how many employers offer their nanny health care, Richard Eisenberg, president of Eisenberg Associates Insurance Agency, an independent insurance broker, says that the recent economic slump has hit his industry particularly   hard.

"During the past two years so many nannies were laid off that there was less pressure to include healthcare as part of a competitive salary package," he explains. "But don't you want the person taking care of your kids to be healthy?"

Ilona Bray, author of Nannies & Au-pairs: Hiring In-home Child Care, agrees. "Someone with healthcare will be more likely to go for routine check-ups, get their flu shots, and treat illnesses early on," she says. "Someone without healthcare may wait until their illness becomes a real crisis." Bray also adds that since the family-nanny relationship is so intimate, it can become very difficult if the nanny comes down with a terrible illness and isn't insured. "You may feel a responsibility to help pay for treatment if your nanny can't afford it otherwise," she says.

Of course, both parents and nannies often take the gamble that nothing catastrophic will occur in order to save money. "People think that paying their nannies off the books helps save money, but the numbers really do even out," Bray says. "Thanks to the healthcare reform bill, there is now a tax credit for small employers, which is worth 35% of the premium you pay."

If you are considering offering your nanny healthcare, Care.com has partnered with eHealthInsurance, to offer you anonymous price quotes and can give you an idea of what you will pay. Eisenberg Associates helps both nannies and parents for free - the insurance companies pick up the tab.

"Healthcare is part of the salary negotiation," explains Eisenberg. "Often, families offer different package options, with their stated financial contribution, so the nanny can choose the policy based upon how much she wants to contribute." Eisenberg says the average cost of health insurance is around $200-$300 per month, although in New York, New Jersey, and Massachusetts premiums are much higher. 

And different policies offer different advantages. Temporary or short term medical policies don't cost nearly as much, but you have to renew every 6 months to a year, and new policies won't cover pre-existing conditions (although under the healthcare bill, insurers won't be able to deny coverage starting in 2014).

"There's also catastrophic insurance, which doesn't cost much but is tough for people with low incomes as it has huge deductibles," says Bray. "It also doesn't offer preventative care such as check-ups." Other families may choose just to pay for walk-in visits, but again, you run the risk that your nanny will come to work ill.

"It pays to get creative," adds Bray. "See if your nanny can piggyback onto her spouse's policy if you pay the premium, which can cost less than taking out a new policy."

For Mike and Laura, their nanny's healthcare scare was a wake-up call. "We're looking into getting her coverage now," he says. Still, she's hesitant, preferring the highest possible take-home pay. Mike's not deterred: "We're trying to convince her that it could save her money in the long run."

* The information contained in this article should not be used for any actual nanny relationship without the advice and guidance of a professional advisor who is familiar with all the relevant facts. The information contained herein is general in nature and is not intended as legal, tax or investment advice. Furthermore, the information contained herein may not be applicable to or suitable for your specific circumstances and may require consideration of other matters.

8 Comments

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Health Choice One

I hope that nannies aren't still having the same issue with this now that the Affordable Care Act is in full effect! Premium and cost-sharing subsidies should definitely take some of the financial burden off of nannies, even if their employer doesn't contribute to their premium.
February 04, 2016 at 3:45 PM
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Mags

Mary W, I hope you found something worthwhile...I cannot understand how doctors could not provide healthcare for you.. Some people are really selfish!!!:(
February 10, 2015 at 1:09 PM
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Mary W.

I currently work for as a 'part time' Nanny for 2 kid's. The family i work for Never offered me health insurance az it's my own 'problem'. I have worked for other employers, & this family i work for pays the Lowest Salary, that I've ever made as a live in. I should of made a 'Nanny Contract', as I'm always organized. One family that was interested in me, Did pay for health insurance plus much more. The pay was extremely high ($550/wk), & I had my own "everything". Days off; vacation, sick, OT pay, pay increase after 3 months, just what anyone would want in a job. The one I'm currently at, Didn't Tell Me Everything about the position. This is Actually a Full-time position. I work ( they say 5-11pm. It's Actually, 9am-11pm, every day, except weekends, then it's 3-11pm. I have only Thursday off. The other nanny is the 'traveling nanny', and so all the days she doesn't work, I must work 16 hour shifts. She can also save them & accrue them for your Own Vacation. Every Tuesday is her day off, so I'm up at 7-7:30am & do her job. Now that the 2 oldest ones r n school, you can pray for 'down time'. I take advantage of 'down time' & my days off. I'm working for 2 very, well to do doctor's, who make A lot of money! But when it comes to paying their nannies, it's below poverty level. They'll tell you ' it's the highest you'll ever make being a nanny. Bull Crap!! It's nice to know that Nannies Do Have Rights! That we can get health insurance through our employer ( I only get paid 1x a month-salary), which i just saved enough to purchase my Own health insurance & to buy the latest Galaxy Android. When I find a better paying position, where the family makes me feel 1 of them, not a 'slave', I'm out of here. The other nanny is also. I've been a Care Giver to the elderly for 21years, but can't lift any longer. I've been a Nanny since 2008, enjoyed it very much till now. I've also been a House Keeper/Nanny to a great family in California (where I'm from). So if a family is looking, I'm Available as of September'13. I have a lot to give, and hope everyone who reads this understands, we are human too, & need to live with decent wages to live by. I have to purchase my own everything, including food, gas in car-if I go somewhere. Thanks Care.com for this Valuable information! ! _ o_O Mary
August 16, 2013 at 1:12 AM
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Sherry B.

I am still a little confused. The original question I had was about Workman's Comp Insurance. I responded to an ad for a senior care position that said they were looking for someone with good references and Workman's Comp Insurance. I had never heard of an employee having Workman's Comp Insurance on him/herself for a Care position. Does anyone know about this? Any comments would be helpful. Thank you.
June 07, 2013 at 7:57 AM
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Heidi Y.

I think that families should provide health insurance for people they employ as nannies full time. In my nanny position I want to be fairly compensated for not only my many years of experience and education but, for benefits that people normally have as part of their benefits package in any other job. Why should this job be any different? As for health insurance being two or three hundred dollars a month...that's unbelievable. Where is that? I am a single woman paying for my own health insurance initially. Two years ago it was 562.00 a month. That coverage was insufficient. many doctors started telling me that they weren't accepting that TUFTS plan any longer. I upgraded my plan to a better one. Its with TUFTS, I have a 1,000.00 deductible and have to pay 683.00 a month. If I switch to the E insurance plan on here I would use it and with a comparable plan save 150.00 to 200.00 each month but, enrollment doesn't allow me to opt in to that plan until May. Perhaps if I had switched in Sept. I could be paying that rate now. Currently my employer pays all but, 100.00 of my current plan. Needless to say I am really looking forward to joining more of a group plan on here asap. Thankyou very much to Care.com!! :-)
January 13, 2012 at 2:04 PM

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