ONE NANNYSHARE, TWO EMPLOYERS, ONE EXPENSIVE PROBLEM
A NannyShare is a great way for two families with similar childcare needs to split the cost of hiring a professional nanny. NannyShares are becoming more popular, but both families need to be on-board with their household employer requirements for it to work professionally and legally.
The SituationTwo families in Maryland, the Andersons and the Bryants, entered into a NannyShare arrangement. On the advice of the Anderson's accountant, both families registered as household employers with the IRS and the state and agreed that childcare for both families' children would be provided in the Anderson's home. Making sure to not cut any corners, the Anderson family also obtained the required workers' compensation insurance policy. The Bryants, not wanting the Andersons to have to foot the entire bill, agreed to pay for half of the workers' compensation cost. With both families satisfied that they had legally set up their NannyShare, they hired a nanny to begin taking care of their children.
The MessThe Anderson family went on vacation. While they were gone, the nanny was working at the Bryant's house when she sustained a serious knee injury while playing with the kids in the backyard. When the nanny went to the doctor the next day, the doctor informed her she would need surgery to repair the damage.
In researching what her next steps should be, the nanny determined that she needed to file a claim for workers' compensation. She completed the workers' compensation claim form, which she found on the Maryland Workers' Compensation Commission website. This form required her to supply basic information surrounding the accident, including the address and a description of where the injury happened. Per the instructions on the form, the nanny then provided the form to the Bryants who told her to talk to the Andersons because they had set up the workers' compensation policy for her.
The LawIn a NannyShare, each family is viewed as a separate household employer in the eyes of the law, even if the care is always provided in one family's home. In many states, this also means both families MUST carry a workers' compensation policy, which assists with lost wages and medical expenses in the event of a work-related injury.
Where required, failing to have workers' compensation coverage is punishable by a fine. In Maryland, it is considered a misdemeanor offense with a fine of up to $5,000 and/or imprisonment for up to one year.
And in all states - whether required or not - if an employee gets sick or hurt on the job and her employer does not have workers' compensation insurance, the employer can be held liable for all bills related to the injury or illness as well as lost wages.
Finally, health insurance policies uniformly contain a provision that treatment for work-related injuries is excluded from coverage.
The OutcomeBoth families reviewed the workers' compensation claim the nanny provided, but were still unsure of what to do. The Anderson's accountant suggested they call Breedlove & Associates because he had several clients using our service and knew we could help. A Breedlove consultant verified that both families needed to have a workers' compensation policy according to Maryland state law. Even though the Bryants were not a client of Breedlove & Associates, we were able to direct them to a workers' compensation solution.
Unfortunately for their nanny, her health insurance company declined to pay for the medical expenses associated with her accident. The Andersons and Bryants felt horrible the nanny was left in a situation where her medical bills would be nearly impossible for her to cover. They worked out an arrangement to split the nanny's bills and have her only cover what her co-pays would have been if her health insurance was accepted. The families also split the cost of the nanny's lost wages for the period of time she was out of work and the cost for hiring a temporary nanny to fill her shoes while she recovered.
How the Whole Thing Could Have Been AvoidedA quick call to a household employment expert - a placement agency, or specialist like Breedlove & Associates - to verify everything was in line could have saved both families thousands of dollars. Breedlove & Associates keeps an updated list of the workers' compensation requirements for all household employers by state on our website at www.breedlove.com.
Additionally, regardless of whether your state requires workers' compensation, Breedlove & Associates can guide families to a solution. In many states, our exclusive partner can write a stand-alone workers' compensation policy available to Breedlove & Associates clients during the online registration process. With free instant quotes, a streamlined application process and expert claim support, this family friendly product makes workers' compensation extremely easy to obtain and manage.