How does paying our nanny's health insurance work?

[Anonymous]

And do we, the employers, get a federal tax credit? We live in California.

Thanks!

[Anonymous]

If you use SHOP, you can get a credit, but it gets smaller as the amount you pay your nanny goes up. You only get the credit for the first two years you do it, too.

If you have only one employee, you can pay her premium tax free using Obamacare.

In either case, the premiums are not taxed as income for either one of you.

[Anonymous]

Anonymous wrote:If you use SHOP, you can get a credit, but it gets smaller as the amount you pay your nanny goes up. You only get the credit for the first two years you do it, too.

If you have only one employee, you can pay her premium tax free using Obamacare.

In either case, the premiums are not taxed as income for either one of you.

Is that just for CA?

[Anonymous]

I would try something cheaper for a plan - use a broker or ehealthinsurance.com. Yes, these are not taxed and you can pay it directly to the insurance company. Probably better for your nanny to get the plan so she keeps it if she stops working for you but you pay the preminums. jJst keep all the documentation.

[Anonymous]

Anonymous wrote:

Anonymous wrote:If you use SHOP, you can get a credit, but it gets smaller as the amount you pay your nanny goes up. You only get the credit for the first two years you do it, too.

If you have only one employee, you can pay her premium tax free using Obamacare.

In either case, the premiums are not taxed as income for either one of you.

Is that just for CA?

No. That's federal tax law.

[Anonymous]

Tax benefits are minimal but payments are not taxed.

[Anonymous]

Not OP, but have a similar question. Our nanny already has her own insurance. We are thinking of offering to contribute to monthly her health plan costs as part of an increase in her salary. The amount we are thinking of is definitely more than 50% of her monthly health insurance costs. Has anyone else done this? How would we set this up? Do we pay the insurance company directly? How often? Do we as the employer pay taxes on the amount we contribute to her health plan? I'm finding stuff online about purchasing insurance for an employee through SHOP, but since our nanny already has insurance and I don't want to change that, I'm not sure how to proceed or even where to look for answers. Thank you in advance!

[Anonymous]

Just pay whatever amount directly to ins company. Keep copies of the checks.

[Anonymous]

Anonymous wrote:Just pay whatever amount directly to ins company. Keep copies of the checks.

No, that's not the legal requirement, but if nanny agrees to that, you may do it that way.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Just pay whatever amount directly to ins company. Keep copies of the checks.

No, that's not the legal requirement, but if nanny agrees to that, you may do it that way.

Anyone have an actual link to the law about this?

[Anonymous]

do a search. this has come up before....

[Anonymous]

Anonymous wrote:do a search. this has come up before....

Discussion has come up, but not a link to the federal(?) law...

[Anonymous]

http://info.homeworksolutions.com/blog/update-household-employers-and-the-affordable-care-act
This cites the regs.

[Anonymous]

Thanks, but isn't there a direct .gov site or something?

I prefer not to go through an agency site. TIA.

[Anonymous]

Anonymous wrote:Thanks, but isn't there a direct .gov site or something?

I prefer not to go through an agency site. TIA.

NP. HWS always gives government links, which you would have seen if you opened it. As you chose not to do so, here it is: https://www.irs.gov/pub/irs-drop/n-15-17.pdf