Employers providing health insurance - anyone use Small Business Health Options Program (SHOP)? RSS feed

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[Post New]06/24/2014 07:38
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Anonymous
First-time employer here. We would like to provide our nanny with an option for health insurance which we would pay 100%. We've been researching ways to do this and it seems there is a tax credit if we go through the healthcare.gov Small Business Health Options Program (SHOP). Any employers out there used this? If you pay for your nanny's health insurance, do you record the premium amount on her pay stub? (I'm thinking not, since it's not coming out of her pay.) Any experience or advice would be appreciated. Thanks!
[Post New]06/24/2014 07:48
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Anonymous
No advice, but I'd think lots of nanny employers would like to look into that option. Sounds good like a good thing.
[Post New]07/01/2014 15:59
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Anonymous
I'd also appreciate some advice with this.
[Post New]07/01/2014 16:45
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Anonymous
I'm not familiar w/ SHOP. But we do subsidize our nanny's healthcare, and we helped her find good coverage. But - I think healthcare is a personal thing and not necessarily something you need or want to be this involved in.

Your nanny can find/select/purchase health insurance through the exchange and probably qualify for significant discounts based on income. You can then reimburse her for the cost of the monthly premiums. That reimbursement is not considered taxable income so you handle it separately from payroll.

This lets your nanny remain in control of healthcare decisions, keeps you from getting overly involved, and allows you to offer the benefit.
[Post New]07/02/2014 14:53
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Anonymous
I don't use that program. Our nanny found a plan she likes and I write a check directly to the insurance company for the premiums every month. The accounting firm we use for our "nanny taxes" told us that there is nothing to report and that me just paying the insurer directly is the simplest. Payment of health insurance premiums by an employer is excluded from income tax so she doesn't need to pay taxes on it. They also told me there is no tax advantage like a credit or deduction on my end.

Now I wish they had told me about this option! I knew the program existed but I thought it didn't apply to household employers of one.

If you do go this route, will you return just to let us know your experience? I'd be interested!
[Post New]07/02/2014 16:52
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Anonymous
Anonymous wrote:I'm not familiar w/ SHOP. But we do subsidize our nanny's healthcare, and we helped her find good coverage. But - I think healthcare is a personal thing and not necessarily something you need or want to be this involved in.

Your nanny can find/select/purchase health insurance through the exchange and probably qualify for significant discounts based on income. You can then reimburse her for the cost of the monthly premiums. That reimbursement is not considered taxable income so you handle it separately from payroll.

This lets your nanny remain in control of healthcare decisions, keeps you from getting overly involved, and allows you to offer the benefit.


This is what we have done for years. Write a separate check for the exact amount with a notation what it is for. We have her print out a monthly statement and keep a copy of her policy for our records in case we were audited.
[Post New]12/02/2014 17:44
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Anonymous
Bumping this thread. Has anyone (especially anyone in Maryland) used the SHOP to buy insurance for a nanny? We used to JUST reimburse our employee for her health insurance premiums, having been advised by various nanny payroll services / websites / etc over the years that this was not taxable income. However, this is NO LONGER the case. Such reimbursements are now considered taxable now and (at least theoretically) you can be fined $100 a day for handling such reimbursements improperly:
http://www.irs.gov/uac/Newsroom/Employer-Health-Care-Arrangements

From what I've gathered, if one wants to reimburse an employee for an individual policy premium now, one MUST treat it as taxable income. That means that my employee's $250 premium is going to have to be grossed up to $350 (to net out to $250 at her tax rate) and on top of that we will have to factor in roughly 10% more to cover employer taxes (FICA etc). So her $250 premium is suddenly going to cost us about $385 a month. (OR an extra $1600 a year.)

In theory, anyone with at least one employee is supposed to be able to purchase coverage for that employee through their state's SHOP (and deduct part of the premium from their own taxes). This seems like it should be the solution to our problem. Frustratingly, though, Maryland requires employers to go through brokers, and so far the few brokers I've contacted in Maryland don't want to bother with a "group" policy for one employee.
https://www.marylandhealthconnection.gov/assets/mhc_smallbiz_english_r2.pdf

Anyone BTDT? I'm desperate for some advice or insight here. Tia!
[Post New]12/02/2014 19:17
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Anonymous
I thought about going through SHOP, but for our nanny (24 years old, non-smoker), the premiums were about 1/3 higher, thus eating up the tax credit. They also only offered 3 plans, while healthcare.gov offered dozens.

This may vary by state, so you should check.

I pay her premium directly to the insurer. Like any employer, I do know who her insurer is and what plan she has. I don't think that's some huge invasion pf privacy, and this way if the IRS ever asks, it is clear the policy never lapsed and the money was only for health insurance.

Do you already have a nanny? My only hesitation in promising to cover someone at 100% is that if someone has a dependent or a spouse, she may expect that means you will pay for family coverage which can be considerably more expensive.

For our single nanny, a HHI of $38,000/yr meant she was not eligible for subsidies.
[Post New]12/02/2014 19:35
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Anonymous
Anonymous wrote:I thought about going through SHOP, but for our nanny (24 years old, non-smoker), the premiums were about 1/3 higher, thus eating up the tax credit. They also only offered 3 plans, while healthcare.gov offered dozens.

This may vary by state, so you should check.

I pay her premium directly to the insurer. Like any employer, I do know who her insurer is and what plan she has. I don't think that's some huge invasion pf privacy, and this way if the IRS ever asks, it is clear the policy never lapsed and the money was only for health insurance.

Do you already have a nanny? My only hesitation in promising to cover someone at 100% is that if someone has a dependent or a spouse, she may expect that means you will pay for family coverage which can be considerably more expensive.

For our single nanny, a HHI of $38,000/yr meant she was not eligible for subsidies.


Pp here - This is all very thoughtful and helpful; thank you. We laid our previous nanny's premium directly to kaiser, just as you are doing. The problem is that the irs is now saying that this is no longer allowable
[Post New]12/02/2014 20:22
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Anonymous
Here's why it's no longer ok to reimburse for premium:
http://mobile.nytimes.com/2014/05/26/us/irs-bars-employers-from-dumping-workers-into-health-exchanges.html?referrer=&_r=0
[Post New]12/03/2014 11:03
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Anonymous
But if you pay the insurer directly, you're not reimbursing for anything. It's additional money. No one is eligible for a subsidy, either. The question is, does it now have to be taxed?
[Post New]12/04/2014 09:21
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webbkathy

Member Offline
Anonymous wrote:But if you pay the insurer directly, you're not reimbursing for anything. It's additional money. No one is eligible for a subsidy, either. The question is, does it now have to be taxed?


It doesn't matter - if you pay for a policy from the individual marketplace it is taxable income. To keep it non-taxable you have to go through the SHOP.

http://www.irs.gov/uac/Newsroom/Employer-Health-Care-Arrangements
[Post New]12/04/2014 12:39
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Anonymous
I posted on the other thread. I think we're going to do SHOP as long as her doctor is in the plan it offers (only one plan through SHOP; lots offered through the exchange).
[Post New]12/10/2014 11:30
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webbkathy

Member Offline
Anonymous wrote:I'm not familiar w/ SHOP. But we do subsidize our nanny's healthcare, and we helped her find good coverage. But - I think healthcare is a personal thing and not necessarily something you need or want to be this involved in.

Your nanny can find/select/purchase health insurance through the exchange and probably qualify for significant discounts based on income. You can then reimburse her for the cost of the monthly premiums. That reimbursement is not considered taxable income so you handle it separately from payroll.

This lets your nanny remain in control of healthcare decisions, keeps you from getting overly involved, and allows you to offer the benefit.


Sadly if you provide financial premium support for a policy your nanny purchased on the individual exchange that IS taxable income to her. The only non-taxable route is the SHOP.

Links to the IRS and US DOL "from the horses mouth" guidance on this are found here: http://www.info.4nannytaxes.com/blog-0/bid/104545/household-employers-a-conversation-on-the-affordable-care-act
[Post New]12/10/2014 11:30
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webbkathy

Member Offline
Anonymous wrote:But if you pay the insurer directly, you're not reimbursing for anything. It's additional money. No one is eligible for a subsidy, either. The question is, does it now have to be taxed?


Yes, if the policy was purchased on the individual exchange (not through SHOP) the additional money is taxable income to the nanny.
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