Is anyone using a POP plan to pay for their nanny's insurance?

[Anonymous]

Is a Premium Only Plan the best option for covering our nanny's health insurance premium? Does anyone have experience with how these work? We are new nanny employers and wish to cover our nanny's premium but my understanding is that household employers can no longer directly pay the insurer tax free to do so.

[Anonymous]

We haven't but would be curious to know how this works. GTM payroll offers it. I still think the law is unclear on employers with only one employee. Homepay's guidance still says you can pay premiums directly.

[Anonymous]

OP here. I inquired with GTM and they charge $300 to set up a POP, but they are also who told us the law no longer allows direct pay. Interesting that other payroll services are still saying it is okay to pay directly if you are a single employee household employer.

[Anonymous]

Yes seems this may be a money making thing. Is three also a monthly fee to maintain it?

[Anonymous]

Check with homepay/care.com. Think you can still pay direct for single employee.

[Anonymous]

Anonymous wrote:Yes seems this may be a money making thing. Is three also a monthly fee to maintain it?

OP again, no monthly fee for a POP. I was told there is one for an HSA. Again from GTM. I will check with HomePay.

[Anonymous]

Thanks OP. Would be interested to know what you find out. We agreed to pay our nanny's premiums after Open enrollment in November. So much confusion!

[Anonymous]

You are allowed to pay for ONE household employee's insurance premium tax-free. We reimburse our employee for her premium monthly after she shows us that she paid online.

[Anonymous]

Anonymous wrote:You are allowed to pay for ONE household employee's insurance premium tax-free. We reimburse our employee for her premium monthly after she shows us that she paid online.

A thread a little while back said that this was a "fix" that expires in 2016.

I found this, though, but I can't tell who publishes it. It says if you have one employee, you are still exempt: http://obamacarefacts.com/2015/07/01/fee-for-reimbursing-employees-for-individual-health-plans/

[Anonymous]

Here's who runs Obamacarefacts.com: http://obamacarefacts.com/about/

The problem is that I'm still not sure about next year (2016), and whether the 1 employee loophole still applies.

I am using SHOP right now, but my nanny has a lot more choices on the regular exchange.

[Anonymous]

I found this on an IRS publication, which seems to say employers with one employee are exempt: https://www.irs.gov/pub/irs-drop/n-15-17.pdf

Code § 9831(a)(2) provides that the market reforms do not apply to a group
health plan that has fewer than two participants who are current employees on the first
day of the plan year. Accordingly, an arrangement covering only a single employee
(whether or not that employee is a 2-percent shareholder-employee) generally is not
subject to the market reforms whether or not such a reimbursement arrangement
otherwise constitutes a group health plan.

[Anonymous]

Better link: https://www.irs.gov/irb/2015-14_IRB/ar07.html

[Anonymous]

Anonymous wrote:I found this on an IRS publication, which seems to say employers with one employee are exempt: https://www.irs.gov/pub/irs-drop/n-15-17.pdf

Code § 9831(a)(2) provides that the market reforms do not apply to a group
health plan that has fewer than two participants who are current employees on the first
day of the plan year. Accordingly, an arrangement covering only a single employee
(whether or not that employee is a 2-percent shareholder-employee) generally is not
subject to the market reforms whether or not such a reimbursement arrangement
otherwise constitutes a group health plan.

Agreed! http://info.homeworksolutions.com/blog/update-household-employers-and-the-affordable-care-act

[Anonymous]

Please see IRS publication 969.

You can use what the IRS calls an HRA - Helath Reimbursement Arrangement.
There is nothing to 'set-up'.
All you are required to do is maintain a copy of your nannies current insrance card on file.
There are no other record-keeping requirements.

HomePay by Breedlove/Care.com, GTM and HomeWork Solutions all know how to do this through their nanny payroll services.
And if you do your own payroll it is as easy as writing a separate check to your nanny each month for the amount you want to reimburse.

You can reimburse your nanny 100% (or less) of her monthlyinsurance premiums
and she will receive the money TAX FREE and you will not pay any payroll tax on the reimbursement.

I haven't updated this PDF FAQ in a while, but the same rules apply now:
http://www.4inhomecare.com/HealthIns_Benefits.pdf

Hope that's helpful to you.

Michael Gerard
Executive Director
Childcare Solutions
www.4inHomeCare.com

[Anonymous]

I left out the most important part:
Your reimbursement payments to your nanny for a "qualified" health insurance premium
are TAX DEDUCTIBLE to you.

Anonymous wrote:Please see IRS publication 969.

You can use what the IRS calls an HRA - Helath Reimbursement Arrangement.
There is nothing to 'set-up'.
All you are required to do is maintain a copy of your nannies current insrance card on file.
There are no other record-keeping requirements.

HomePay by Breedlove/Care.com, GTM and HomeWork Solutions all know how to do this through their nanny payroll services.
And if you do your own payroll it is as easy as writing a separate check to your nanny each month for the amount you want to reimburse.

You can reimburse your nanny 100% (or less) of her monthlyinsurance premiums
and she will receive the money TAX FREE and you will not pay any payroll tax on the reimbursement.

I haven't updated this PDF FAQ in a while, but the same rules apply now:
http://www.4inhomecare.com/HealthIns_Benefits.pdf

Hope that's helpful to you.

Michael Gerard
Executive Director
Childcare Solutions
www.4inHomeCare.com