Why Use An Agency
Why use an agency vs you as the employer with private caregivers or 1099 companies?
DISCLOSURE: We are a Home Care Agency designed to care for and help the Elderly. We are not licensed Attorneys, CPAs, and Financial Advisors etc… but we have used all of their expertise and advice to gather this information. The information found in this article is for your reference only.
Know the Law:
- It is a requirement, by law, to file a 1099 form if you pay for any services over $600.00 per year, to any one individual.
- Stiff IRS penalties apply if you are not in compliance.
- Not reporting all income you paid to private individuals or not reporting all income you received, is an unlawful act of tax fraud.
- IRS considers it your duty to report suspected tax fraud and supplies a hotline for it.
- If you hire a Caregiver, who states she is an independent contractor it is the Family/Client responsibility to make sure the Independent Contractor meets the strict legal criteria.
- 1099’s are like plumbers & repair people:
1. They set the schedule they have available, they show up in a window of time;
2. They provide all of the tools & knowledge required to do the job;
3. They do not have hours/ schedules, direct management to do the job, from you;
4. NO training is ever provided by you;
5. They do not depend on your job only, have several jobs and locations, and have a variety of clients for whom they provide a service;
6. They cover their own insurance and can provide certificate of insurance/ workers comp;
7. They pay taxes independently and don’t require you to manage their tax deductions or payroll reporting.
- If you hire an independent contractor who does not pay or remain current on their tax obligations it may fall back on the family/responsible party/ and/or client to pay for those obligations, regardless of any previous understanding/agreement between the Caregiver/Independent Contractor and the Family/Client, whether it is an oral or written agreement.
- If the Caregiver, acting as an Independent Contractor, does not fulfill their tax obligations, as agreed, it will involve back taxes, civil fines, possible criminal penalties, and attorney fees as well as time and due diligence from the Family/Client. How it is finally reported/ discovered will determine who bares more of the burden.
The Risks You Assume as the Employer (A Good Company Protects Your Rights/ Limits Liabilities):
- As an Employer: you are responsible for background checks and Due Diligence.
- As an Employer: you are required to have a tax identification number.
- As an Employer: you are responsible for social security, unemployment, and payroll taxes you must pay into monthly.
- As an Employer: you are responsible for having a separate account for withholding taxes and forward it to the government on a monthly basis- if you do not do this and file a Schedule H at the end of the year, you will be responsible for the entire withholding $ plus interest and possible late fees, all due in a large lump sum.
- As an Employer: you are responsible for having/maintaining a workers compensation policy (as an individual you do not have the benefit of a group workmen’s comp policy. Individual policies are at a higher cost and due up front – payment plans are not available)
- As an Employer: you are responsible for any work related injury, proof of injury basis, the cost of medical expenses, any disability payments that occur, as well as legal counsel that may be necessary to sort out these issues
- As an Employer in this industry, the high risk for injury (especially without training) relates to high workers comp rates. Including activity involving bathing, transferring from bed to wheel chair, toileting and walker assistance. A fall risk for the Client is a risk for the Caregiver. Cooking, driving, and aggressive/combative behavior from the Client as well as communicable disease risk are all issues you bare responsibility for.
- As an Employer: you have a responsibility/liability for the person who receives care as well as anyone else who is on premise. If the Caregiver causes an accident in which others, including other family members, suffer harm you are responsible for all compensation, costs, legal fees, medical expenses etc.
- As an Employer: you have a responsibility/liability for visitors, invited by the Caregiver or the Client, who come on the premise such as family members, friends who are offering a ride or children of the Caregiver.
- As an Employer: you have the burden of proof and responsibility even when the claim is bogus and the person just wants a pay off, at your expense.
- I Need An Angel provide detailed statements/records to use for tax benefit purposes
- I Need An Angel meets the standard for deducting your home care expenses, 100% subject to normal limitations of individual tax liabilities- a deduction you can not take for services paid to a relative, spouse, or other individual. Code sec. 213 k-2101 allows that an individual who is a licensed health care practitioner has certified that the individual meets either of the following descriptions in order to be fully deductible:
1) is unable to perform at least 2 daily activities of daily living without substantial assistance from another individual for at least 90 days, due to a loss of functional capacity including eating, toileting, transferring, bathing, dressing, and incontinence
2) requires substantial supervision to be protected from threats to health and safety due to severe cognitive impairment.
- There is no ceiling on this deduction
- Deductions (rev rule 76-106, 1976-1-cb71) for additional lodging/room expenses as well as additional utility or meal expense for home health care outside of maintaining a normal household are also deductible
- Home improvements made for the main purpose of medical care per publication 502 is also deductible.
- I Need An Angel Insurance Description
- Non Owned Auto
- Professional Liability (errors/emissions/errors in judgment)
- General Liability (includes defamation of character)
- Property Damage
- Bodily Injury
Peace of Mind Home Care Services
- As an Employer: you are responsible for the background check, criminal history check, public records check, as well as reference checks.
- I Need An Angel does background checks for anyone who comes on premise and enforces strict policies that Caregivers are not allowed to invite anyone in to visit the Client, without authorization, not even to use the bathroom (when most theft or injury is likely to occur).
- I Need An Angel does exploratory background and criminal checks including social security checks, public records reports, and multi-state reference checks.
- As an Employer: you are responsible for the supervision of the Caregiver.
- As an Employer: you are responsible for the due diligence required to provide an employee, who cares for your loved one, instructions that does not put them at risk, or be found incompetent yourself, if a complaint or injury occurs and the authorities become involved.
- Amicable agreements between Caregivers and Family/Clients go awry for crazy reasons- it is better to let a professional/trained I Need An Angel rep handle issues and prevent them from becoming disputes
- I Need An Angel protects the Client/Family from other lawsuits if a visitor is injured and also protects the privacy and belongings of the Client. See below detail of the impressive amount of insurance we cover below.
- As an Employer: You are responsible for scheduling, covering any emergencies, getting involved with personal requests and/or for schedules that you may have to accommodate
- I Need An Angel sets all schedules and has formal procedures for requests for time off, running late, emergencies and as an “Extension of Your Family” I Need An Angel staff makes sure you are never without care for your loved one.
- I Need An Angel staff is available 24 hours/ 7 days a week – we are available for Client emergencies/schedule issues and Caregiver support- not your Attorney, Accounting/CPA, or Dentist does that 365 days a year.
Supervision /Care Plan:
- As an Employer: you are responsible for all issues that arise from the daily routine as well as setting up rules & requirements to avoid misunderstandings.
- As an Employer: you are responsible for the emotional support caregivers often need when they are dealing with a difficult situation such as a sudden change in care, other family member disputes, aggression from the Client, sudden declining of abilities, emotional attachment to the Client, challenging family decisions/choices, regardless of your own geographic distance from your loved one.
- I Need An Angel provides a Lare log book and typed daily care requirements that is changed as often as needed and includes personality preferences, meal likes/dislikes, areas of conflict for the Client and how to handle these, transportation needs, etc.
- I Need An Angel helps prevent conflicts by managing little things that can become big deals.
- As an Employer: you are responsible for knowing/catching the warning signs of a strained relationship, inability of the Caregiver to handle additional responsibilities either physically or mentally, or the Caregiver becoming so emotionally attached that they are causing family conflict, or a relationship that has developed into one that takes advantage of the Client, who is vulnerable, or the family who is vulnerable.
- As an Employer: you are responsible for looking for signs of manipulation or exploitation.
- I Need An Angel coordinators go with the Caregiver to do a Meet n’ Greet and show the Caregiver around- like where the coffee is, likes/dislikes, procedures on how things should be taken care of, etc.
- I Need An Angel will intervene on your behalf if a caring relationship has now changed.
- I Need An Angel staff looks for sign of fatigue or signs of increased level of care that the caregiver is not physically or mentally prepared to provide.
- I Need An Angel offers the support and training to get a Caregiver to the appropriate level of care necessary, if that is a possible option
- I Need An Angel offers coaching support to improve the well being of its Caregivers – when employees feel supported and have the tools to be happy then they are better employees.
- I Need An Angel monitors care log notes, weekly check list, care highlights and monitors any conflict like eating preferences, schedules or expectations of the Client or the Caregiver.
- I Need An Angel makes sure an appropriate match is made based on the level of care and experience, a clean track record, an advanced back ground/criminal check, and reference checks.
- Letting dishes air dry versus drying them immediately and putting them away could be a source of stress for a Client,. Driving a different way to the grocery store can create an issue with wasting mileage, wanting spoons and forks set at the table in restaurant style, negotiating hours/schedules can all seem like small issues but a good agency helps you with this and so much more, to avoid small things turning into big deals.
Training/ Increase Level of Care:
- As an Employer: you are responsible for training and making sure the Caregiver is confident in their job duties.
- I Need An Angel provides several levels of training including Policy & Procedure training (which can omit many conflicts/misunderstandings) CPR/First Aid requirements/training, training in equipment use like wheel chair, walker, gait belts or hoyer lifts etc or bathing, special diets, signs of manipulation, or exploitation and support as a disease progresses and how to cope on a daily and ongoing basis, coaching classes, how to improve financial stability, employee recognition and rewards. It is often the supervisory role that makes challenging situations work. It helps both the Client and the Caregiver to have a means of arbitration to fix minor issues before they become major issues.
- I Need An Angel helps with long term care insurance, bodily injury insurance forms and other criteria requirements for private reimbursement of expenses.
"But there are also unknown unknowns, the ones we don't know we don't know." - Donald Rumsfeld
You should be in the "know"!
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