The US Department of State requires that ALL G-5 and A-3 domestics be covered by a medical insurance policy with minimum essential coverage while residing in the U.S. Who pays for the G-5 visa domestic servants medical insurance policy must be stipulated in the employment contract. Sponsors are encouraged to reimburse all or part of this policy of insurance, and in fact the World Bank Group and Organization of American States require that the sponsor reimburse the entire cost of the insurance policy. This reimbursement can be completely tax free when a ICHRA Plan is established by the employer.
The G-5 employee obtains health insurance in the state’s Individual Marketplace. When applying for insurance, your covered employee must indicate that they are covered by employer sponsored healthcare.
World Bank Group & OAS staff who sponsor and employ G-5 domestics are required by the respective G-4 Code of Conduct to fully reimburse their G-5 employee Medical Insurance. This is in addition to the agreed compensation and the policy premiums are the financial responsibility of the G-4 sponsor. The US tax code does not require that these premium amounts be reported as income to the G-5 employee when the employer (G-4 sponsor) offers a Individual Contribution Healthcare Reimbursement Arrangement, but it does require that the employee’s Form W-2 properly reflect this reimbursement. Proper reimbursement for required healthcare and W-2 reporting are subject to audit.
The IMF & IADB G-4 Code of Conduct refers to the Employment Contract between the G-4 and the G-5 on this issue. The IMF G-5 Employment Contract must state that medical care in the United States can be very expensive. It must also state whether the G-5 will be offered health insurance reimbursement, and if so the cost to the employee, if any. Medical insurance premiums paid by the G-5 are paid from the net pay (after taxes have been deducted).
The United Nations Code of Conduct states that the employer shall pay the worker’s medical insurance and reasonable expenses. Again, the US tax code does not require that these premium amounts be reported as income to the G-5 employee when the employer (G-4 sponsor) offers an Individual Coverage Health Reimbursement Arrangement but does require that the employee’s Form W-2 properly reflect this reimbursement.
The US Department of State can deny a visa application for a G-5 domestic when, in the sole judgement of the consular office, the resultant wage to the G-5 (wages less the policy of insurance) is deemed inadequate to be considered a “living wage.” This happens with increasing frequency since October 2009, as US medical insurance that conforms with the Affordable Care Act has become quite costly. The G-5 visa is considered a privilege granted to the staff member of these international organizations, and the State Department is keen to ensure that the G-5 never becomes the financial responsibility of the host country in order to prevent human rights abuses—particularly domestic enslavement.
IMPORTANT: We remind staff members that they are responsible to remain in compliance with their respective G-4 Codes of Conduct on this and all terms of their G-5 employment. HomeWork Solutions relies on information supplied by the Sponsoring Organizations and posts this information here at our website as a courtesy.
Last Updated: November 18, 2019
SAMPLE TEMPLATE: ICHRA Plan Document and Reimbursement Form