Imagine applying for your dream job only to realize that there are no health benefits. Do you take the role and try to pay for health insurance yourself or continue an arduous job search for an employer that values your wellbeing and benefits? For many nannies, family assistants and household managers, this is an all too common reality, and it shouldn’t be a choice anyone has to make.
Caregivers are the backbone of so many households, yet access to nanny health insurance often slips through the cracks, leaving them to shoulder the full cost on their own. Families, on the other hand, are often left asking: How do you even pay for nanny health insurance? Are there real options for health insurance for nannies?
The good news is that there are solutions. And, in today’s competitive market, offering nanny insurance isn’t just doable, it’s a smart investment for families. As an employer, providing health benefits builds trust, helps you retain amazing caregivers, and supports the wellbeing of the person you’re counting on most. If you’re curious about how to add nanny health insurance to your family’s benefits package, you’re in the right place.
👉 Need help navigating health insurance and other benefits? Schedule your intake call today and let Hello Nanny! guide you step by step so you can hire with confidence.
How Do Nannies Get Health Insurance?
There are a few different ways nannies can get health insurance. Here are a few of the most common:
- Pay fully out-of-pocket for their own health insurance premiums through state or federal healthcare platforms like Healthcare.gov
- Qualified Small Employer Health Reimbursement Arrangement (QSEHRA)
- Individual Coverage Health Reimbursement Arrangement (ICHRA)
- SHOP insurance (Health insurance marketplace for small employers)
- Health Savings Account (HSA)
There isn’t a one-size-fits-all answer when it comes to health insurance for nannies, and this list isn’t by any means exhaustive—they’re simply the most common means for nannies to get health insurance.
Related: Nanny Responsibilities: A Comprehensive Overview for Parents
How Families Can Pay for Nanny Health Insurance
While it’s all too common for caregivers to pay entirely for their health insurance out of pocket, families who value a long-term partnership often help cover some (or all) of the health insurance costs. There are a few flexible options that make this possible, even for smaller households:
Qualified Small Employer Health Reimbursement Arrangement (QSEHRA)
A QSEHRA lets families reimburse their nanny for health insurance premiums and qualified medical expenses tax-free. Think of it as setting aside a monthly allowance that your nanny can use toward their health costs. QSEHRA is an arrangement that requires you to have fewer than 50 full-time employees and for 2025, an employer offering a QSEHRA can reimburse up to $6,350 per year for a single employee’s health coverage and up to $12,800 per year for an employee’s family coverage.
Here’s how it works:
- The employer (that’s you) decides the monthly allowance for each employee up to the annual IRS limits. Keep in mind that the IRS updates their limits annually so you must decide at the beginning of the year what your monthly allowance will be.
- Employee (that’s your nanny) buys an appropriate healthcare plan
- Employee submits proof: Your nanny submits a receipt and/or invoice for the premium and other eligible medical expenses.
- Employer reimburses employee: During the next payroll the employer will reimburse the employee for the approved expenses, up to their monthly allowance. Remember that the amount you decide to contribute must be reported on your nanny’s W2 form.
A QSEHRA is a flexible, tax-free plan that works for many families (and nannies). As mentioned above, just be sure to check with the IRS as they update their limits annually. Read more directly from the IRS here.
Individual Coverage Health Reimbursement Arrangement (ICHRA)
An ICHRA works similarly but provides even more flexibility. The most significant difference between ICHRA and QSEHRA is that with ICHRA, there are no contribution limits. Families can set different reimbursement amounts for different roles—helpful if you employ multiple caregivers or household staff.
Here’s how it works:
- Employer (that’s you) sets an allowance: The employer decides on a monthly allowance for eligible employees. Families can offer different amounts to each employee (eg. you can offer one reimbursement amount to your full-time nanny, and another reimbursement amount to your part-time family assistant)
- Employees choose a healthcare plan: Employees select and purchase an individual health insurance plan from the marketplace that fits their needs and budget.
- Reimbursement: Your nanny pays their health insurance premium, then submits proof of payment to you. From there, you reimburse them up to the agreed-upon allowance.
- Unused Funds: If your nanny doesn’t use the full allowance, you can decide whether those funds stay with your family or roll over into the following year, depending on the plan’s stipulations.
In ICHRAs, employees have the option to opt-out and there is no cap to the amount an employer can contribute as an allowance. Employers can deduct the funds contributed to ICHRA as a business expense and for the employees, reimbursements are not taxed as income. Lastly, as the employer, you can choose what exactly you’ll reimburse. For example, you can reimburse dental, vision, and doctor visit expenses but not prescriptions.
Health Savings Account (HSA)
If your nanny has an insurance plan with high deductibles, an HSA may be an excellent option to consider. An HSA can be used to cover deductibles and out-of-pocket medical expenses. Contributions made by you into your nanny’s HSA are tax-free.
The HSA contribution limit is $3,850 for a single nanny and $7,750 for a nanny with a family. Unused funds at the end of a year roll over to the following year, which makes this a convenient option for nanny health insurance.
Small Business Health Options Program (SHOP) Insurance
Small Business Health Options Program (SHOP) Insurance is a health insurance marketplace for small businesses who want to provide health and/or dental insurance to their employees. To purchase SHOP as an employer, your business or non-profit has to have between 1-50 employees and if eligible, you don’t have to wait for any open enrollment period. Employers choose how much they pay towards their employee’s premiums and whether they will cover their dependents. As an employer, you may be able to get the Small Business Health Care Tax Credit. Learn more about qualifications and eligibility here.
Paying the Insurance Company Directly
Some families choose to cover premiums by paying the insurance company directly. Contributing to your nanny’s health insurance premium will save you around 10% and your nanny 15-20% on the amount contributed.
This route can be a bit more hands-on but ensures your nanny’s coverage is consistent and reliable. Be sure to pay your nanny’s insurance company directly and you want to be sure that the money you contribute will not be treated for either you or your nanny as taxable income.
Additional Considerations
Keep in mind that with each new administration and their new policies, health insurance is always a changing landscape with moving goal posts. This can make it hard to create a long-term plan so we suggest checking in with an agency like ours where we make it a point to stay up-to-date on the latest best practices or check in with your own healthcare provider for guidance.
Also good to know that this isn’t an exhaustive list by any means—there are many paths to covering nanny health insurance. But these options are among the most common, and each allows families to show their caregivers that their health and wellbeing are valued.
Related: 11 Standard Nanny Benefits You Didn’t Know
Beyond Health Insurance: The Most Common Types of Nanny Insurance
When families hear the term nanny insurance, health coverage is naturally the first thing that comes to mind, but it’s not the only type worth considering. There are actually several kinds of insurance that help protect both families and caregivers:
- Health Insurance
At the core is health insurance for nannies, which ensures caregivers can access regular care, preventative services, and emergency treatment without the threat of an overwhelming financial burden. - Dental and Vision Insurance
These benefits are less common in household employment but can be a valuable perk. Including them makes your role more competitive and demonstrates a deeper investment in your nanny’s wellbeing. - Workers’ Compensation Insurance
Required in many states, workers’ comp covers your nanny in case of a work-related injury or illness. It also protects families legally and financially should the unexpected happen. - Liability Insurance
Some families opt for liability insurance that covers accidents or damage that may occur in the course of childcare. While not essential in every situation, it adds an additional layer of protection.
Together, these types of nanny insurance create a safety net. Health insurance supports your nanny’s long-term wellbeing, while workers’ compensation and liability insurance safeguard both your caregiver and your household.
Related: Nanny Contracts: Everything You Need to Know
Why Nanny Health Insurance Really Does Matter
You may wonder, “Why should I pay for healthcare for my nanny?” and it’s a perfectly valid question. There are two reasons why contributing to your nanny’s health insurance is a good idea.
First, providing a well-rounded benefits package proves to your nanny you care about them. Offering health insurance for your nanny tells them their health is essential to you. When you have a competitive benefits package, including healthcare, you attract and retain high-quality candidates who are serious about their work and the perfect fit for your family.
Second, contributing to your nanny’s health insurance saves money for both you and your nanny since you are not required to pay taxes on those contributions. To truly understand how to navigate offering health insurance to your nanny, we recommend connecting with our preferred payroll provider which can recommend health insurance and nanny payroll resources.
👉Want help navigating navigating the hiring process? Book an intake call with Hello Nanny! and we’ll walk you through the options that make the most sense for your family.
Nanny Health Insurance: What’s Really Required
In 2025, there is no legal mandate requiring employers to offer health insurance to their nannies or household support staff. Unlike traditional corporate jobs, household employers aren’t bound by the same Affordable Care Act (ACA) requirements that apply to larger organizations.
That said, just because health insurance for nannies is not required doesn’t mean it’s not worth providing. Offering nanny insurance sets you apart as an employer of choice in a competitive market where experienced caregivers are in high demand. Health coverage and additional workplace benefits not only supports your nanny’s wellbeing but also builds loyalty, reduces turnover, and helps ensure consistent, high-quality care for your children.
Setting Up Your Nanny’s Health Insurance: Steps to Get Started
We know that deciding to provide nanny health insurance is a big task to take on as an employer, especially if this is your first time doing so. Before offering health insurance to your nanny or a prospective employee, here’s a simple roadmap to get started:
- Assess your budget before your list your job
Decide how much you’re able to contribute toward your nanny’s coverage and which plan or option you want to provide (eg QSEHRA, ICHRA, etc). Even a partial contribution shows that you’re invested in their wellbeing so decide up front with any key stakeholders in your family, exactly how much you plan to budget for this allowance. - Choose the the option that makes sense for your family
Explore solutions like QSEHRA, ICHRA, direct premium payments, or stipends. Each comes with pros and cons depending on your family’s situation. - Talk with your nanny or prospective employee
Open the conversation and ask about their current coverage, preferences, or needs. Some nannies may already have insurance but would appreciate a stipend or reimbursement. - Work with a payroll or HR provider
Companies specializing in household employment can help you set up contributions properly, ensuring everything is compliant and tax-advantaged. (Psst…we have a preferred payroll provider and we’d be happy to discuss your options with you as you embark on the hiring process). - Review benefits annually
As with any benefit, check in yearly to make sure the arrangement still works for both your family and your nanny. Make changes as necessary.
Offering health insurance for nannies doesn’t have to be extremely expensive; there are various options and tax benefits that make this benefit accessible for even small households. Providing any sort of health insurance benefit doesn’t just check a box—it creates peace of mind, builds stronger working relationships, and reinforces the idea that caregivers deserve the same respect and benefits as professionals in any other field.
Considering Your Nanny’s Wellbeing Means Considering Their Health Insurance
At the end of the day, offering nanny health insurance is about more than checking off a benefit box. Like any job, offering a benefits package, including health insurance, is about valuing your caregiver as the professional they are and providing them with the support they deserve. While it may not be legally required, providing access to health coverage builds trust, strengthens your working relationship, and gives your nanny peace of mind. In turn, your family’s job listing will be more competitive and candidates will see that you as an employer prioritize greater stability, consistency, and a long-term partnership.
Parenting was never meant to be a solo act, and neither is caregiving. By investing in your nanny’s wellbeing, you’re not just supporting them—you’re supporting your entire family.
👉 Ready to offer health insurance and other benefits to your nanny? Schedule your intake call today and let Hello Nanny! guide you step by step.
Nanny Health Insurance FAQs
Can I add my nanny to my health insurance?
Generally speaking, you cannot add any dependents who are not related to you to your health insurance plan. For example, you cannot add a friend or nanny to your current health insurance plan.
How do nannies get health insurance?
While there is no one path to nanny health insurance, the most common ways nannies get health insurance are:
- Pay fully out-of-pocket for their own health insurance premiums through state or federal healthcare platforms like Healthcare.gov
- Qualified Small Employer Health Reimbursement Arrangement (QSEHRA)
- Individual Coverage Health Reimbursement Arrangement (ICHRA)
- SHOP insurance (Health insurance marketplace for small employers)
- Health Savings Account (HSA)
To find out which option is best for your family and your nanny, you’ll want to research the above options, talk to an insurance expert, and consult with an agency like Hello Nanny! Of course, you’ll likely have financial and tax considerations as well so it doesn’t hurt to loop in your accountant/CPA and financial planner, should your family have one.
Is it required for families to provide health insurance for nannies?
It is not legally required for families to provide health insurance to their nannies or household support staff. While it’s not a legal mandate, as an employer, you should consider the benefits of offering health insurance for nannies like TKTK
What benefits should I provide to my nanny?
From health insurance to paid time off, there are a handful of standard industry benefits that all families and nannies should be aware of. Here’s a full rundown and explanation about why industry-standard benefits are important.
I can’t pay my nanny’s whole health insurance premium. Should I just try to cover a portion of it?
Nannies know having health insurance covered under their benefits package goes a long way. Not only does it provide an incentive to work with a family, but it also provides security for them and their own family. Many nannies are accustomed to paying for their insurance. Including nanny health insurance in your benefits makes you stand out from a sea of hiring families. Even if you can’t cover the entire insurance premium, it helps to at least contribute to a portion to show that you understand the value a nanny brings to your family and the benefits they deserve to receive. It also tells a nanny that you’re willing to take care of them and encourages them to stay with you long-term.
Who should I consult when offering my nanny health insurance?
In addition to an agency like ours that can guide you through the hiring process and ensure you uphold standard nanny benefits, we suggest you also consult with an insurance specialist and your accountant, financial planner or CPA, should you have one. Of course, at the end of the day, you always want to consult with your nanny or employee before instituting major benefits changes.
