Nanny Insurance: Teens Need Protection Too

While it is not a legal requirement for teenage nannies to have liability insurance, it is worth considering the benefits of having this type of insurance. Liability insurance can cover legal costs if a nanny is found at fault for child neglect, damage to property, or any related injury. This type of insurance can also cover medical bills and support costs in addition to any pre-existing health insurance policies. For parents, having insurance for their teenage nanny can give peace of mind and show the nanny's professionalism.

Parents' home insurance

Parents who are considering hiring a nanny or are already employing one should think about insurance. When interviewing a nanny, discuss insurance expectations. Find out if the candidate already has insurance, and establish what coverage you wish to provide or are required to provide.

Workers' Compensation Insurance

In most states, families are required by law to carry a workers' compensation insurance policy for their nannies. Even if not mandated, it is advisable to obtain this policy to cover the nanny's medical bills and lost wages if they are injured on the job. For example, if your nanny falls down the stairs or is hurt while playing with your child at the park, workers' compensation insurance will cover their medical expenses and lost wages. This insurance can be purchased from private insurers or provided by the state. In New York, for instance, domestic workers who work 40 hours or more per week or live at the employer's home must be covered by workers' compensation insurance.

Additional Auto Insurance

If your nanny drives your children in your vehicle regularly, you may need to add them to your insurance policy and increase your liability coverage. Contact your insurance provider to ensure your policy meets the minimum requirements in your state. If your nanny uses their own car, you should reimburse them for mileage and ensure they have adequate liability coverage.

Employment Practices Liability Insurance (EPLI)

EPLI is a type of liability insurance that covers families if they are sued by their employee for alleged wrongful employment practices, including discrimination, sexual harassment, wrongful termination, invasion of privacy, breach of contract, emotional distress, or wage and hour law violations. This insurance can typically be added to an existing workers' compensation policy for a relatively low annual cost.

Health Insurance

Although not required, some families choose to contribute funds to their nanny's health insurance plan. This can be done through various arrangements, such as an Individual Coverage Health Reimbursement Arrangement (ICHRA) or a Qualified Small Employer Health Reimbursement Arrangement (QSEHRA). Alternatively, you can agree to dedicate a portion of the nanny's payroll towards a policy of their choice.

Parents' medical insurance

While it is not a legal requirement for teenage nannies to have liability insurance, it is recommended to give parents peace of mind and ensure the nanny is covered in the case of any accidents. Nanny insurance can cover legal costs if the nanny is found at fault for child neglect, damage to the home, or any related injury. It can also cover possible workers' compensation for any bodily injuries that occur on the job.

Now, onto the topic of parents' medical insurance for nannies.

When hiring a nanny, parents become the nanny's employer, and as such, there are several human resources-related items to manage, such as taxes, payroll, and insurance. While it is not required to provide health insurance for a nanny, many families choose to contribute funds to their nanny's plan. This is a great benefit to offer and can help attract more serious candidates to the role.

There are a few options for setting up health insurance for a nanny:

• Individual Coverage Health Reimbursement Arrangement (ICHRA)
• Qualified Small Employer Health Reimbursement Arrangement (QSEHRA)
• Small Business Health Options Program

With these options, the bill can be sent directly to the parents, or the parents can agree with the nanny to have a portion of their payroll dedicated to a policy of their choice. It is recommended that parents contribute $50-100 per month for part-time nannies and 50%-100% of the premium for full-time nannies.

When contributing to a nanny's health insurance, this dollar amount is considered non-taxable income, meaning neither the parents nor the nanny will pay taxes on this sum. It is important to note that the contribution cannot be more than what the nanny is paying for the premium, and the nanny must share proof of their policy with the parents for their records.

In addition to health insurance, there are a few other types of insurance parents may want to consider when hiring a nanny:

• Workers' compensation insurance: This is required by law in most states and will cover the nanny's medical bills and lost wages if they are injured on the job.
• Additional auto insurance: If the nanny drives the children in the parents' vehicle regularly, the parents may need to add them to their insurance policy and increase their liability coverage.
• Employment Practices Liability Insurance (EPLI or ELPI): This covers families in the event they are sued by their employee for alleged wrongful employment practices, such as discrimination, sexual harassment, or wrongful termination.

Parents' umbrella insurance

Parents should consider purchasing umbrella insurance to protect themselves and their teenage children from liability claims. Umbrella insurance is a type of personal liability insurance that provides extra coverage beyond the limits of standard homeowners, auto, or watercraft policies. It covers injury to others or damage to their property and is relatively inexpensive compared to other types of insurance.

Umbrella insurance can be particularly useful for families with teenage children who are more likely to be involved in accidents or incidents that could result in liability claims. For example, if a teenage son gets into a car accident and the cost of injuries to other drivers exceeds the auto insurance liability limit, umbrella insurance can help cover the additional expenses. Similarly, if a teenage daughter is accused of libel or slander, umbrella insurance can provide coverage for legal fees and damages.

Umbrella insurance can also provide peace of mind for parents who employ household staff, own rental properties, or have teenagers living at home. In the event of a civil lawsuit, umbrella insurance can help cover legal fees and damages, protecting the family's assets and financial future.

When considering umbrella insurance, it is important to review the existing coverage provided by homeowners and auto insurance policies. Umbrella insurance typically requires a minimum amount of liability insurance on underlying policies, which may result in higher premiums for those policies. It is also important to note that umbrella insurance does not cover damage to the policyholder's own property or liability due to intentional or criminal acts.

Overall, umbrella insurance can be a valuable addition to a family's insurance portfolio, providing extra protection and peace of mind in the event of unexpected incidents or liability claims.

Nanny's health insurance

While it is not a legal requirement for nannies to have liability insurance, it is strongly recommended that they do so. Accidents can happen, and liability insurance can cover legal costs if a nanny is found at fault for child neglect or damage to property. It can also provide peace of mind for both the nanny and the family they are working for.

Now, regarding health insurance for nannies, there are a few options available:

Group, or Employer-Sponsored Insurance

Also known as employer-sponsored health insurance, this option allows the nanny and the employer to split the cost of health insurance premiums. This is an attractive benefit for nannies and can help employers attract and retain talented caregivers. However, it is not a common practice for nannies to be offered health insurance in this way.

Qualified Small Employer Health Reimbursement Arrangement (QSEHRA)

A QSEHRA is a tax-free health benefit that allows employers to reimburse employees for healthcare expenses, including individual health insurance premiums, dental and vision premiums, and prescription drugs. There is a yearly maximum set by the government for how much an employer can reimburse. This option is specifically designed for small employers who may not offer group insurance, making it a common choice for families employing nannies.

Individual Coverage Health Reimbursement Arrangement (ICHRA)

An ICHRA is another tax-free health benefit that allows employers to reimburse employees for healthcare expenses. With an ICHRA, employers can set a cap on the allowance, but there are no laws governing how much they can reimburse. To participate in this program, nannies must purchase their own individual health insurance plan.

Individual or Family Health Insurance

If a nanny is not offered health insurance or reimbursement for healthcare expenses by their employer, they may need to purchase their own individual or family health insurance plan. eHealth, the nation's first and largest health insurance brokerage, can assist with finding the right plan to meet specific budgetary and healthcare needs.

In terms of how much employers should contribute to their nanny's health insurance, it is recommended that for part-time nannies, employers contribute $50-100 per month. For full-time nannies, contributing at least 50% of the health insurance premium is advised, with an ideal contribution of 100%. These contributions are considered non-taxable income, meaning neither the employer nor the nanny will pay taxes on this amount.

Workers' compensation insurance

Additionally, workers' compensation insurance safeguards employers from potential financial disasters. Without this insurance, employers may be held liable for their nanny's medical bills and lost wages, resulting in significant out-of-pocket expenses. For example, consider a scenario where a caregiver sustains a back injury in a car accident while running errands for their employer. The absence of workers' compensation insurance would leave the employer responsible for covering all the medical expenses and lost wages, which could amount to thousands of dollars.

Another advantage of workers' compensation insurance is the legal protection it affords. When an employee accepts benefits under this insurance, they typically waive their right to sue the employer, regardless of who is at fault. This provision offers employers peace of mind and mitigates the risk of facing costly lawsuits related to workplace injuries.

While homeowners' insurance may provide some coverage for workers in specific states like California and New Jersey, it is generally not designed to cover employees. Therefore, it is essential for employers to obtain separate workers' compensation insurance to ensure their nannies or caregivers are adequately protected.

The cost of workers' compensation insurance varies by state, but it typically only costs a few hundred dollars annually in most cases. This insurance can be purchased as a standalone policy or added to existing homeowners' or renters' insurance.

Frequently asked questions