Knowing the different types of providers is the first step to sorting out the good, the bad and the ugly. The regulatory details vary from state to state. However the concepts outlined below are applicable in most states.
In New Jersey there are two legitimate types of providers and two highly questionable if not illegal types of providers. The New Jersey Department of Law and Public Safety licenses companies as a “Health Care Service Firm” or a “Nursing Registry.” These companies operate under a strict set of guidelines and are held accountable for the performance of their employees. The reason the licensing standards exist is for consumer protection.
Health Care Service Firms generally provide non-medical care and personal care. Some may provide skilled nursing care. Non-medical care entails the tasks that enable a person to live safely and comfortably in their home. Personal care is support of the “activities of daily living” as well as “hands-on” care. Personal care can only be provided by a physician, nurse, certified home health aide or family member. A home health aide’s certification is not valid unless they are working under the general supervision of a Registered Nurse. Technically, they are defined as “unlicensed assistive personnel.” Caregivers working for a Health Care Service Firm are legally and properly employed which is to say that the employer pays the required payroll taxes and insurance contributions. The care recipient does not pay the caregiver directly.
The State also licenses temporary help and placement agencies. These companies support business and industry with the recruiting and hiring process or by providing temporary workers. This process is not intended to place caregivers in a home for on short or long term basis. Beware of the company that says that you save money by paying the caregiver directly. Four key questions are what kind of license does the company have, does the company purchase workers compensation for the caregivers, do the caregivers receive a W-2 from the company and exactly what is included in the company’s insurance portfolio? If the caregivers do not receive a W-2, or if they are not covered by workers compensation insurance, or the insurance portfolio is weak then you will be accepting a significant risk and responsibility.
The last type of provider is the independent or rogue caregiver. While the caregiver may be charming and competent, hiring a rogue is fraught with problems. First, there has not been a complete background check. Second, you have no recourse if the caregiver gets sick or suddenly quits. Third, there is no protection against the costs of an on-the-job injury. Fourth you are liable for the employer’s share of the payroll taxes.
There are innumerable stories of seniors who hired a “friend of a friend” because it was less expensive and then wound up paying a fortune to settle a wage dispute or worker compensation claim. Normally they are too embarrassed to tell anyone what happened so these horror stories never see the light of day. To use the British expression, don’t be “penny wise and pound foolish.”
About the author: Rob Robison is a Certified Senior Advisor and President of Robison & Associates, a firm dedicated to senior advocacy and education. Rob and his wife, Patti, own Comfort Keepers of Central Jersey a licensed health care service firms providing over 5,000 hours of home care per week.
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