How Bill AB 241 Affects Home Care Agencies, CA

Home Care Walnut Creek CA

Home Care Walnut Creek CA

Regardless of how you feel about AB241 bill and the politicians and process who brought it forth and had it passed, the bill is creating a lot of discourse.

AB 241 affects about ½ of the home care agencies in the state- the other half are actually referral agencies that transfer the employer responsibility to the client. The referral agencies were exempted from the bill as were IHHS and services to the developmentally delayed (As the mother of a son who is developmentally delayed I hope this exception continues) As the affected agencies, the employer-employee home care agencies are notifying their workers, clients, the conservators/fiduciaries/trust officers of the elimination of the overtime exemption the unintended consequences of the bill is coming to light.

The CA Professional Fiduciary Association and the private Geriatric Care managers along with families are very concerned with the rapid increase in the cost of home care. One large home care competitor with multiple locations in many states has just notified its clients that they will no longer be providing live in services as of January 1st, 2014 and will instead offer the alternative of two 12 hour shifts a day for a rate of $650 a day. Many other agencies are quickly trying to create home care registries where the client assumes the liabilities while the agency provides the screening, placement and the relief. Some families and fiduciaries are now planning on moving debilitated seniors into facilities. A number of agencies are offering “buy out” options so that families can directly hire the workers. While some families will use regular payroll service, most will not be handling tax payments and the aides will lose their unemployment, disability, workers compensation, Medicare and social security coverage. The next increase in cost comes in July with the minimum wage adjustment and continues until there is an expected increase in home care of over 40% within the next two years . Given that there have been major increases in the cost of long term care coverage (an83% increase in one year for CALPERS) we can expect our aging population and the boomer tsunami to be throw out on the street or sent to facilities such as one that lost its license in Castro Valley. .

While my agency no longer does live-in care, we have one industrious aide who has been working 90 hours a week at $14 an hour and I will have to cut her hours to 45 and gross in half or by $630 a week / $2500 a month and over $30,000 a year . She is the single of four, a legal alien if not citizen , who is trying to house, feed and educate her family in Silicon Valley While one could argue that she could be paid $28 an hour, the average legitimate home care bill rate is $24 to $26 an hour on the SF peninsula through agencies that cover payroll taxes and w/c . The exempted referral agencies charge between $20 and $26 an hour without those costs.. The bill rate must incorporate a 10% workers compensation premium rate, payroll –FICA taxes and in some locations a special payroll tax such as 1.5 percent in SF, plus healthy SF tax/premium and sick pay.

Many of us have 10 and 12 hour shifts in rural, unlit areas and will have to accommodate for the overtime pay while absorbing the costs without a higher charge rate.

By Kathryn C. Janz RN MA

Executive Director

Matched CareGivers Continuous Care