Wednesday, September 25, 2013

We Denied Our Nanny Health Insurance

Once upon a time, we had a nanny. Ok, it was a nanny share. HeyMama was 3 months old, and my friend/coworker had a son who was a few months older. They lived less than a mile away. We decided to share a nanny to care for both kids. 

We're law-abiding citizens who happen to have work benefits that encourage paying childcare on the books vs. under the table. So we payed payroll taxes. We got workman's comp coverage. We enlisted a payroll company to prepare weekly paystubs and make sure we filed all of the appropriate paperwork with the government. We wanted to do it all right, and be good employers to the person who would care for our child. 

So we didn't offer health insurance to our nanny.

This might sound a bit odd. Let me explain.

We live in Massachusetts. We have Romneycare. (It's the inspiration for Obamacare, if you didn't know). So everyone has to have health insurance. Everyone. If you can't afford it, it's given to you, or heavily subsidized. 

Now, in case you've never worked in childcare, let me inform you that nannies don't make much money. Especially if you work for people like us. But that's a good thing in the world of Romneycare. Because that means you qualify for subsidized or free insurance. BUT only if your employer doesn't provide it for you. 

We ran some numbers. If we payed for some of our nanny's insurance, she would have to pay for the rest of it out of the money we paid her. And it was expensive. If we payed nothing towards her insurance, she got the money we paid her AND she got insurance. We had a finite amount of money we could pay her, and it wasn't enough to approximate a reasonable weekly wage PLUS provide insurance. In fact, paying for her health insurance meant that she barely made any money at all. So why would we pay for her health insurance if it hurt her instead of helping her?

We read the rules. As household employers, we were not required to provide insurance. We were required to provide workman's comp coverage. We were required to file payroll taxes. We did these things. We went into the situation expecting to provide all of the benefits that our employers provided us. And them we realized that the healthcare laws of our state actually incentivized us NOT to provide benefits for our nanny. It would actually HURT our nanny if we did. 

So I was not at all surprised when I heard about companies cutting most of their employees to part time in advance of the coming Obamacare changes. If the employees aren't full time, they don't have to be provided with health insurance. I was not surprised at all. Unlike our situation, they're not doing it in the best interest of their employees, just their own company pocketbook. But is anyone really surprised? And what other unintended consequences will we see? What's the likelihood that they will help employees instead of hurting them?

Only time will tell. 

PS. Our nanny share ended when the nanny stole my friend's engagement ring and was seen wearing it in public. But that's a story for another day.

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