Agencies and Registries
Homecare providers are classified, fiscally, into two types. Agencies and Registries. The classification is driven by the employment status of the caregivers which, in turn, has major implications for the supervision of your loved-ones care.
Agencies employ their caregivers. For example, Four Seasons Healthcare is an Agency.
Registries do not employ their caregivers – they use independent contractors.
So what are the issues?
Cheap is not always cheerful - know the risks
Consumers are often unaware of the personal risks when they hire care through a registry or independent contractor. This can, unfortunately, result in less-than positive outcomes for seniors and their families.
The following information details some of the risks associated with hiring an independent contractor or using a registry for home care.
There are many unexpected or hidden issues that consumers and workers face when dealing with companies that place workers they do not employ. One major issue is that there IS an employer-employee relationship that is created in most of the care situations - it is between the worker and the consumer. Consumers, in most cases, are not aware of this. Referring registries and independent contractor agencies often don’t communicate to the worker and consumer that this arrangement could result in the creation of an employee-employer relationship. Because of this, both the worker and consumer can suffer significant financial liabilities.
When the consumer is considered the employer of the home care worker, the consumer is responsible for the employer-paid Social Security, Medicare, Federal and State unemployment, and State and Federal payroll taxes for the worker. If these taxes are left unpaid, the government may sue the consumer or his or her estate for back taxes, interest and penalties as well as potential civil fines and criminal penalties.
Workers’ compensation protection is required as law in nearly every state, and it may be surprising to learn that homeowner’s insurance does not typically cover an employee in the home. If a worker sustains an on-the-job accident, such as back issues from heavy lifting, the medical costs and disability payments for that worker could cause financial hardship for even a very wealthy patient. If the consumer is unable to pay these costs, the worker could be left with no help for a devastating injury.
And finally, of course, it’s all about the Supervision.
A professionally supervised care plan is the cornerstone of good home care. A licensed home care agency has a responsibility to provide ongoing supervision of their employees, registries do not. If the registries did provide supervision they would have to classify their workers as employees and pay appropriate taxes. Supervision is at the heart of good home care – it should be close to your heart too.
Using a registry may sound good to save some money, but both the health and financial consequences could be severe.