Wednesday, September 18, 2013

Just Issued New Rule: Home Care Companies Must Pay Overtime

The US Department of Labor has issued it's ruling on the "companionship exemption" for overtime and minimum wage for home care workers.  We've been watching this discussion for several years now, and we knew the rule was coming.

It's here!

The US Department of Labor web site shows that effective January 1, 2015, all home care companies will need to pay overtime for personal care aides, home health aides, and certified nursing assistants who work more than 40 hours per week. Fact Sheet #25 issued by DOL specifically for Home Health Care gives details of the old rule which is in effect until January 1, 2015.  It then takes you to a Fact Sheet outlining the new Rule.

What are People Saying?

"Today's home care workers are lumped into the same category as teenage baby sitters when it comes to how much they make.  This is wrong and unfair.  Receiving a fair wage will further stabilize and professionalize a critical line of work that is suffering from a shortage of workers."
Tom Perez,
Secretary of Labor

"Businesses will have trouble because customers won't be able to afford the care.  In the end, the people who will be likely to suffer will be the workers who can't get the work they had before."
Marc Freedman
Executive Director for Labor Law Policy
U.S. Chamber of Commerce

"While intended to help caregivers, this rule will have the opposite effect.  Home care companies will have little choice but to employ workers part-time rather than full-time as Medicaid payment rates and consumers with limited incomes cannot afford higher costs.  Caregivers in the end will receive less pay."
Andrea Devoti
National Association for Home Care and Hospice

"The move will benefit the largely female, minority, and low-wage workers who provide these essential services."
Richard Trumka

"The Obama administration has made good on its promise to extend wage and overtime benefits to home care worker.  It is important that agencies and states not make shortsighted changes to their programs that could reduce benefits or deprive consumer of the consistency of care they receive from their providers."
Mary Kay Henry
Service Employees International Union

While we are just beginning to review the 350+ page final regulation (and supporting materials), our initial review indicates that the Labor Department was not responsive to the majority of concerns raised by HCAOA or others in the home care industry.  For example, the final rule, like the proposed rule, states that the companion care exemption may not be used by third party employers.

The one bit of good news is that the rule’s effective date is January 1, 2015.  In addition, the delayed effective date gives us time to fully consider all of our public policy options and determine how we can best help our members understand the regulation and successfully navigate the new requirements.

While we may not be pleased with the new rule announced today, it is important to acknowledge that HCAOA, its members, and our partners made an incredibly important contribution to the public policy debate around this rule.  We not only made this decision difficult for policymakers, but our efforts are likely at least partially responsible for the delayed effective date.  In addition, we have sensitized policymakers to our concerns and created relationships that could be helpful down the road.  We want to thank all of our members for their hard work in challenging the Labor Department’s proposal."
Peter Ross
President, and
Gale Bohling
Legislative Chair
Home Care Association of America

The Final Regulation - all 358 pages - may be downloaded from the Labor Department's Web site. 

What Does This Mean to YOU?

Owners of home care companies will be hit with a double whammy on January 1, 2015.  First, you will need to pay overtime to your caregivers for more than 40 hours of work.  Second, you will need to either purchase health care insurance for your caregivers or pay a penalty to the government under the provisions of the Patient Protection and Affordable Care Act.     

In our view, these two new laws will have the following effects:
  1. Caregivers will make less money because they will not be able to work more than 40 hours for one employer
  2. More caregivers will have to work two jobs so they can work more than 40 hours
  3. Clients and families will have to pay more for home care services
  4. Home care companies will see increased costs of doing business.  These include:
    • Paying overtime
    • Paying minimum wage and overtime for live-in caregivers
    • Paying for health insurance or paying the penalty
    • The increased cost of recruiting, selection, training, and retention of caregivers.
There are many unintended consequences from these two bills that the legislators and regulators have not considered.  The combination of these two laws will have negative financial impact on clients, caregivers, and home care company owners.

However, be assured that it's not the end of the world.  A number of states already have laws which override the companionship exemption, and Massachusetts has required health insurance for several year.  Home Care companies are resilient, and have managed to survive and prosper in those states.  However, the hourly rates charged to clients are higher in those states than in other states. 

We'll watch these developments closely and keep you informed on the best practices in the industry as you adapt to change. 

Tuesday, September 17, 2013

How do People Pay for Home Care?

Research conducted by The Academy for Private Duty Home Care® shows that there are millions of seniors in the US and Canada who have the personal net worth to pay for home care services on a private pay basis.  This is shown by the number of live-in and 24/7 cases served by private duty home care companies all across the country.

However, we are also seeing an increasing number of people who are tapping into alternative sources of funding such as long term care insurance and reverse mortgages.  Another option that few people really know about is converting an existing live insurance policy into a private market long term care benefit.

Converting an existing life insurance policy into a long term care benefit plan is not to be confused with a long term care insurance policy. We learned about this process from our Resource Associate, Life Care Funding.  They showed us how an existing insurance policy can be converted to a trust fund to pay for home care services.

Here's a great video that gives you a specific example of how one insurance policy holder converted his life insurance after his wife passed away.  Take a look.  Then let us know what you think.

Friday, September 6, 2013

Take the Guess out of Guesswork in Selecting and Hiring Caregivers and Office Staff

By Diane West

By asking the right questions,  you can help determine if your job applicants are a good fit for the job you want them to do.  Whether you are hiring caregivers, office staff, or sales professionals, asking the right questions is critical to your success.

What are the right questions?

To get a clearer understanding of that, we've been working with PeopleClues, a leading psychological testing firm for over six years in the development of the Caregiver Quality Assurance® program.  CQA is your source for information, ideas, and tools for recruiting, selection, training, and retention.  Using the proven assessment tools from PeopleClues, we've helped hundreds of home care companies do a better job of recruiting and selection.

Now, we want to give you a chance to learn more of what PeopleClues knows about asking the rights questions.  By asking the right questions PeopleClues can help you determine if applicants are a fit for what you need.  Plus, PeopleClues does something that other behavioral tests don’t do – They compare an applicant’s answers to statistically proven benchmarks by industry and role to give a true measure of best fit.

Join Julie Moreland, Senior Vice President of PeopleClues, and Meghan Graves, Human Resources Manager at Continuum, on Thursday, September 19 at 1:00 p.m.ET/10:00 a.m. PT for a live web conference to learn how PeopleClues:

·         Helps you screen applicants to find better candidates
·         Assesses performance of your current team members
·         Helps home care companies employ awesome talent 

About our Special Guests

Julie Moreland is Vice President of the PeopleClues Divison of People Matter, based in Charleston, SC.

Julie's division provides behavioral assessments designed to measure job fit, attitude, and level of engagement of candidates and current employees.  She has over 20 years of experience and is a nationally recognized authority on the practical business applications of assessment technologies.

Meghan Graves is the Human Resources Manager of Continuum, Inc. a highly successful home care company in St. Louis, MO.  Meghan is involved in all aspects of the selection and hiring process.  She has nine years of experience in human resources and recruiting for health care, IT, and home care.

Join us at NO Cost!

As a service to the home care industry, Leading Home Care is bringing you this highly interactive web conference at no cost  so that you can get a better understanding of the latest trends in pre-employment assessment design and technology.  While we would obviously love to have you become a member of Caregiver Quality Assurance®, there is no obligation and this is not a 60  minute commercial.  This is your opportunity to learn more about the science of behavioral assessment, and how to ask the right questions in your interviewing and selection process based on proven and validated technologies.

Register now for this FREE webinar,

Have a prior commitment. No worries.  Register for the webinar and we'll send you a link to view the recording at your convenience.  But you have to be registered before the program to get the link.

Don't delay. 

Wednesday, September 4, 2013

You Take Care of Mom, but WHO will take care of YOU?

A recent study by the American Association for Retired Persons Public Policy Institute has uncovered an alarming trend in the number of family caregivers who will be available to care for aging Baby Boomers.  The report is focused on studying the number of potential caregivers between the ages of 45 and 65 for each person 80 or older.

The report, The Aging of the Baby Boom and the Growing Care Gap:A Look at Future Declines in the Availability of Family Caregivers contains some data that will be valuable to owners of private duty home care companies, and shows the huge potential for the future of our business over the next twenty years as today's baby boomers go into retirement and need caregivers of their own.  

Take a look at this infographic that presents the highlights of the study.

Then take some time to read the full report.