How to Start a Home Health Care Business in California

Aug 10, 2023 · 6 minutes to read

The need for home health care services is growing nationwide, and California is no exception. Now may be an excellent time to start a home health agency to cater to increasing demand.

This guide outlines the requirements for starting a home health care business in California.

Female home care nurse supports and assists senior woman

Do your research

Before you start a home health agency, it’s important to do some research and planning. These steps can help you build a successful agency and make getting a home health care license easier.

Research is a vital part of starting any small business. For a home health agency, you may want to focus on areas such as:

  • The need for home care services in your area
  • Who your ideal clients are and the services they may need
  • Who your competitors are
  • The services your competitors provide, how much they charge, and how they advertise their business

With research in hand, you can develop a business plan. This document serves as a guide for creating and running your agency. It can help you set business goals, make strategic decisions in the early months and years, and track your success.

A business plan may be required to apply for small business loans and grants or to attract investors.

Become a home health aide

If you are managing a home health agency but not directly working with clients, becoming a home health aide may be unnecessary. However, this is an essential step if you are directly involved in patient care.

You must complete an approved home health aide training program in California. This consists of 120 hours of training, including 20 hours in a clinical setting. You will be tested on your ability to properly care for patients.

After completing the program, you will apply for a home health aide license. These licenses are overseen by the Department of Social Services Community Care Licensing Division. You must pass a background check and pay the application fee to receive your license.

Establish your business

Next, you’ll need to complete the admin of establishing your business. In California, this means applying for a business license and any necessary permits. This can be done online through the CA.gov website.

You’ll also want to decide on a location for your home health agency. Starting a home health agency from home may work if you are a sole proprietor or in a partnership. However, you may want a dedicated office space if you manage employees.

Register for a tax ID number through the IRS. You may also want to set up business-only bank accounts for your agency.

Finally, spend time drafting your business policies and procedures. The home health care license application requires you to submit information, including:

  • Job descriptions for each position you intend to hire
  • Personnel policies, including hiring practices and abuse reporting procedures
  • A training plan for entry-level employees and annual training
  • Your home care organization description

Insure and bond your business

Business insurance is an important requirement for starting a home health care business in California. Your coverage will help protect your business, employees, and clients.

As part of the application process, you must show proof of the following coverage:

General Liability – These policies help protect your business against third-party bodily injury and property damage claims. As of August 2023, you must have coverage of at least $1 million per occurrence and $3 million in the aggregate.

Professional LiabilityThese policies cover mistakes or errors in your work and negligence claims. Like General Liability, you will need at least $1 million per occurrence and $3 million in the aggregate.

Workers’ Compensation – These policies provide protection for employers if an employee suffers a work-related illness or injury. Your policy must cover all home care aides associated with your agency.

California home health agencies must also purchase an employee dishonesty bond to operate in the state.

Apply for a home care organization license

With your research, training and admin out of the way, you can apply for a home health agency license. Getting a home health care license allows you to operate legally in California. It also allows you to accept Medicare and Medicaid patients.

Submit your application and supporting documents to the California Department of Public Health. You’ll need to pay an application fee. It may take several weeks for your application to be processed and approved.

Hire employees

You can hire employees once you’ve received your home health care license. Anyone working directly with patients must have a home health aide certification in California. It is your responsibility as the employer to verify their licensing and request a background check.

If you will be providing entry-level training, it is up to you to ensure that it meets the state’s standards. You will also be able to register home health aides with the state on their behalf after they have received their home health aide license.

Market your business

Finding customers is a struggle that many small businesses face. Home health agencies are no different. You will need to market and advertise your agency to ensure a steady flow of clients and revenue.

There are many ways to grow a home care business, such as:

  • Creating a professional website
  • Listing your agency on Google Maps, other search engines, and directories
  • Setting up social media profiles on relevant platforms
  • Advertising online, on radio or TV, and in local newspapers
  • Staffing a table or booth at local community events
  • Partnering with medical professionals and senior groups for referrals

Cover your home health agency with BizInsure

Starting a home health agency is an exciting venture for those looking to break into the home health care market. With planning and hard work, you may soon grow your home care business into a thriving agency that provides vital services to the community.

Business insurance is a requirement for starting a home health care agency in California, but finding policies doesn’t need to be difficult.

BizInsure has simplified buying business insurance. Compare quotes online, choose your coverage and buy—all in about 10 minutes! With options tailored to the needs of home health agencies, you can have instant coverage that meets California’s licensing requirements.

Compare quotes today and see how much you can save!

This information is a general guide only and does not take into account your objectives, financial situation or needs. Always check with your local licensing board when getting or renewing your [profession] license to ensure you are meeting their current licensing requirements.
As with any insurance, coverage will be subject to the terms, conditions and exclusions contained in the policy wording. The information contained on this guide is general only and should not be relied upon as advice. The number of quotes provided varies between products, occupations and other underwriting factors determined by the insurers.
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