Does Your Long-Term Care Insurance Permit You to Hire Home Caregivers Directly?

Long-Term Care | May 20, 2014 | Hook Law Center

According to long-term care insurer Genworth, nearly three-quarters of those who require long-term care prefer to receive that service in their own homes.

Perhaps that is because home care can be a relative bargain. According to the firm, the median wage for a home health care aide is just under $20, an amount that has increased 1.3 percent annually in the past five years. The median annual costs of assisted living and a private nursing home room are $42,000 and $87,600, respectively. Those costs have risen 4.3 and 4.2 percent per year, respectively, over the past five years. Long-term care is more expensive outside the home, and the gap is widening.

However, a recent change to the Fair Labor Standards Act may turn the trend and shrink that divide. Home care aides will soon be covered by the law, making them eligible for minimum wage and overtime pay. Most already earn more than minimum wage, but most do not earn overtime pay.

To control the cost of home health care, many families hire independent caregivers, including friends and neighbors, for assistance. But the changes in labor standards may encourage the long-term care insurance industry to require caregivers to be hired through agencies.

Insurers say that the agency requirement would ensure reliability and consistent quality of care. That may be true, but an agency could also act as a middleman, ultimately driving up the cost of care.

If you are in the market for long-term care insurance, consider whether a given policy will permit you to hire a caregiver directly. Or, if you already have insurance, find out what is permissible under your policy before making hiring decisions. You do not want any surprises in either coverage or care.

The elder law attorneys at Hook Law Center assist Virginia families with will preparation, trust & estate administration, guardianships and conservatorships, long-term care planning, special needs planning, veterans benefits, and more. To learn more, visit or call 757-399-7506.

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