In-Home Paid Health Care

Today, many people are planning to age in their homes, which may result in the need for in-home paid health care.  There are many considerations to be made for the protection of the person being cared for, the caregiver, and the family of the aged. 

Are you hiring a companion or a health aide?  The definitions are quite different, with a companion providing transportation, social interaction, and small simple domestic chores.  However, a health aide is responsible for providing hands-on care according to a care plan under the supervision of a medical professional.  A certified health aide is licensed through an agency having medical supervision.  If they are not through an agency, then they are considered to be only a companion. 

Compensation payment is a HUGE consideration.  When you have engaged the services of an aide through an agency, you will be billed by the agency, the aide will be covered by insurance and you will have no income tax consequences.  However, if you opt to hire someone and pay them “under the table”, then you could be faced with some potential problems.  What are the income tax implications to you or to the person providing “services”?  Are you considered an employer responsible for employment taxes and filing certain employment returns?  Are you ethically responsible for reporting the amount paid to that person via a Form 1099?  What happens if you don’t?  What happens if that person becomes injured while caring for the aged – after all, back problems are very common with caregivers. Who will pay the medical bills?  Who could be sued? 

Let’s say that you are using someone that is not through an agency.  What will happen if the caregiver is unable to provide services?  Do you have someone as a backup?  When using an agency, there would be backup available should the need arise.  Not to mention the income tax, insurance possibilities mentioned above would be non-existent. 

If your loved one does not require assistance, but merely is in need of companion services, there is no licensing requirement for this type of service.  Perhaps transportation is all that is needed.  Or maybe social companionship.  This is considered a direct-hire arrangement, allowing you to dictate the terms of employment – as needed, etc. 

Regardless of engagement of companion or health aide services, it is best to check with an attorney regarding what could be needed for the protection of all.  You would not want to find out later that you may have been deficient in tax reporting or could be the defendant of a legal action due to injuries. 

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About the Author

Kay Sowa is a paralegal in the Trusts and Estates Group at Capehart & Scatchard, P.A. She is an IRS Enrolled Agent, an Accredited Estate Planner®, and a Certified Trust and Fiduciary Advisor. She oversees the trust and estate administration practice for the firm. She is an accomplished author and lecturer who has frequently spoken on behalf of a number of organizations including the National Business Institute and the Institute of Paralegal Education.

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