Providing Health Insurance to Household Employees
As household staffing experts in this increasingly competitive market, many families come to us asking, “How can we attract the best candidates?” One way is to consider the benefits that you are offering.
Benefits of Providing Health Insurance to Your Household Employee
A survey by GlassDoor showed that health insurance is by far the most important benefit that candidates are seeking. Offering this in your compensation package will attract a higher caliber of candidates and foster long-term retention.
Furthermore, when health insurance is provided, preventative health care is more achievable. This in turn becomes a benefit to the family by decreasing absenteeism, as small health concerns are less likely to progress into conditions with potentially longer recovery periods.
Can Our Family Really Offer Health Insurance?
While the benefits to both employee and employer are undeniable, many families may not feel that they are in a financial position to provide health insurance. Great news- you don’t have to own a large company in order to provide a comprehensive benefits package to your household employee! Many of today’s household employers are discovering how easy it is with the QSEHRA plan.
A Qualified Small Employer Health Reimbursement Arrangement (QSEHRA) allows families to reimburse individually purchased health insurance policies. Because this arrangement allows reimbursement with tax-free funds, it is more beneficial to utilize a QSEHRA than simply providing a higher salary. In 2019, the IRS allows reimbursement costs of up to $5,150 per year for an individual and up to $10,450 per year for a family.
How Do We Set Up a QSEHRA?
While setting up a QSEHRA might sound daunting, it is fairly easy while keeping in mind a few requirements:
– Employers must provide the household employee with written notice of the QSEHRA
– Employee is required to provide proof of health insurance coverage before becoming eligible to receive QSEHRA funds
– Employer must report the reimbursements to the IRS on each employee’s Form W-2
For assistance with setting up a QSEHRA, please contact a household payroll company such as HomeWork Solutions.
