BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
AB 1863 (Jones) - Home Care Services Consumer Protection Act.
Amended: July 1, 2014 Policy Vote: Human Services 4-0
Urgency: No Mandate: Yes
Hearing Date: August 4, 2014
Consultant: Jolie Onodera
This bill meets the criteria for referral to the Suspense File.
Bill Summary: AB 1863 would establish "domestic home care aide
referral organizations" as a new licensure category under the
Home Care Services Consumer Protection Act overseen by the
Department of Social Services (DSS), as specified.
Fiscal Impact:
One-time costs to DSS potentially in excess of $100,000
(General Fund) to revise regulations for the new licensing
category.
One-time costs to DSS for information technology (IT)
changes potentially in excess of $400,000 (General Fund)
required by adding a new licensing category.
Ongoing administrative costs to DSS potentially in excess
of $1 million (General Fund), for workload associated with
the 200 to 300 licensees, offset by the authority to charge
initial and renewal fees for licensure, as well as other
reasonable fees necessary to cover administrative costs.
Background: Existing law establishes the Home Care Services
Consumer Protection Act (the Act), enacted pursuant to AB 1217
(Lowenthal) Chapter 790/2013, which provides for the licensure
and regulation of home care organizations and established a
registry of home care aides, as specified. Home care
organizations directly employ home care aides and are
responsible for ensuring that home care aides have received
background check clearances, have been screened for
tuberculosis, and have received a minimum level of training
prior to providing care to a client.
The Act, however, did not provide for the licensure of domestic
home care aide referral organizations (DHCAROs) which are a form
AB 1863 (Jones)
Page 1
of employment agency that refers independent home care aides to
prospective clients, but do not directly employ the home care
aides. Under the DHCARO model, consumers typically establish
"trust accounts" to make payments to the referral agency trust,
in lieu of making two separate payments to the home care aide
and referral agency. The referral agency then retains a fee and
pays the home care aide's wages from the trust account,
providing the worker with an IRS Form 1099 as an independent
contractor.
The Act provides for the voluntary registration of unaffiliated
persons providing home care services but does not prohibit the
provision of such services without registration on the DSS home
care aide registry. This bill would require the licensure of
DHCAROs that meet specified requirements and would require the
home care aides referred by the licensed DHCAROs to be listed on
the home care aide registry. This bill, however, would not
prohibit a consumer from hiring a home care aide directly, nor
would it require all home care aides to be registered.
Proposed Law: This bill would establish DHCAROs as a new
licensure category under the Act, as follows:
Defines "domestic home care aide referral organization"
(DHCARO) to mean an employment agency which is not the
employer of a domestic worker but which offers, refers,
provides or attempts to provide work to a registered domestic
home care aide. Additionally states the DHCARO provides no
training, direction, supervision, tools, supplies or equipment
to the registered home care aide.
Amends the current definition on "home care aide registry" to
include information regarding the DHCAROs with which the
registered home care aide is associated.
Defines "registered home care aide" to mean an affiliated home
care aide or independent home care aid, 18 years or older, who
is listed on the DSS home care aid registry.
Requires an "independent home care aide" to be listed on the
DSS home care aide registry prior to being referred by a
DHCARO to a client.
AB 1863 (Jones)
Page 2
Provides that the DSS-maintained internet website containing
the home care aide registry shall distinguish between
affiliated and independent home care aides for purposes of
informing potential customers and the public about the
differences between the two classifications.
Requires a licensee for a DHCARO to submit an application
providing identification, as specified, and to consent to a
criminal background examination.
Requires DHCAROs to meet specified requirements including but
not limited to maintaining general and professional liability
insurance in an amount of $1 million per occurrence and $3
million in the aggregate.
Requires the DSS to issue a license to a DHCARO applicant that
applies, passes a background examination, provides proof of
general liability insurance and compliance with existing bond
requirements, and has no outstanding fees or civil penalties.
Requires, instead of permitting, DSS to issue a license to a
home care organization that meets the above and additional
requirements, including the provision of a list of affiliated
home care aides and evidence of a valid workers compensation
policy covering affiliated home care aides.
Requires DHCARO licenses to be renewed every two years and
permits providers to obtain multiple licenses.
Requires a DHCARO to do all of the following:
Post its license in a conspicuous location.
Report any suspected of known adult abuse or child
abuse, as specified.
Provide clients with written information regarding
AB 1863 (Jones)
Page 3
the types and hours of available services, the fees
associated with those services and a disclosure that
services may or may not be a covered benefit through
Medicare or Medi-Cal.
Comply with bond requirements that are in existing
law.
Orally communicate to the person seeking home care
aide services the disclosure with specified language.
Within three business days mail a statement with
specified language, printed in at least 10 point type and
in bold or italic to the person seeking domestic
services.
In any paid advertising brochure or on the internet
website of the DHCARO insert a specified statement that
the organization is a referral agency.
Provide a statement of payments made on behalf of
the client to the registered home care aide through the
DHCAROs trust account, upon receipt of a written request
from a client.
Ensure that home care aides are cleared on the home
care aide registry prior to having direct contact with
clients and are free of active tuberculosis disease, as
specified.
Immediately notify DSS with the DHCARO no longer has
a relationship with an independent home care aide.
Requires a home care aide that is being referred by a DHCARO
to demonstrate proficiency, by completing an annual
proficiency exam that includes various topics, as specified,
and provide verifiable work references demonstrating that the
aide has the necessary work experience to provide home care
services.
Requires that the proficiency exam include
department-approved, job-related topics described in this
subdivision and may be provided via an online or written
proficiency examination administered by the DHCARO or its
designee.
Requires a DHCARO to pay a 24-month initial license fee and a
two-year renewal fee in an amount sufficient to cover the
AB 1863 (Jones)
Page 4
reasonable costs of administering the program, as specified,
as well as any other reasonable fees as determined by DSS.
Permits DSS to establish procedures for the receipt,
investigation and resolution of complaints against a DHCARO.
Requires DSS to verify through random, unannounced inspections
that a DHCARO meets the requirements of licensure.
Related Legislation: AB 1217 (Lowenthal) Chapter 790/2013
established the Home Care Services Consumer Protection Act which
provides for the licensure and regulation of home care
organizations that directly employ home care aides and
established the registration of home care aides who are directly
employed by these organizations.
SB 855 (Committee on Budget and Fiscal Review) Chapter 29/2014
made substantial revisions to the Home Care Services Consumer
Protection Act including licensing requirements and DSS
oversight procedures.
Staff Comments: The DSS would incur one-time costs of about
$100,000 to revise regulations to incorporate DHCAROs as a
licensure category under the Home Care Services Consumer
Protection Act. The DSS would also incur one-time costs for
information technology (IT) changes potentially in excess of
$400,000 (General Fund). Ongoing administrative costs are
estimated by DSS in excess of $1 million (General Fund) for
workload associated with 200 to 300 new licensees, offset by the
authority to establish fees to cover the costs of administering
the program. Any additional workload created as the number of
DHCARO licensees increases should be covered by the fee
authority provided in the bill.