After assessing the patient’s situation, you must determine whether you want to hire a caregiver through an agency or hire a private caregiver. To make this decision, you must consider two things: management and payment.

• Management:

When hiring an agency caregiver, the agency bears responsibility for recruiting, screening, background checks, reference checks, credential checks, hiring, firing, salary negotiation, and day-to-day management of the caregiver. Without an agency, these responsibilities fall on you.

When it comes to paying the caregiver, an agency will pay wages, withhold taxes, and file required reports with the state and federal government. Without an agency, the care recipient or the family is held responsible for accomplishing these duties.

If an agency caregiver does not show up for his or her shift, the agency will provide a back-up caregiver. If a private caregiver does not show up for his or her shift, it may be difficult to find another caregiver on such short notice. Agencies will often provide training for caregivers, such as CPR and first aid training. This is not the case when hiring a private caregiver. If a caregiver has an accident or is injured on the job, an agency carries a policy covering the caregiver. Without the agency, the care recipient or the family must carry a policy covering the caregiver.

Private caregivers are often less expensive than an agency caregiver and you will have more freedom choosing the perfect caregiver for you or your loved one. If you choose to hire a private caregiver, however, you must consider all of the responsibilities you are accountable for. If you are not willing to take on these responsibilities, an agency caregiver may be a better option for you.

• Payment:

The cost of an agency caregiver ranges from $11-$30 per hour, while the cost of a private caregiver ranges from $8-$20 per hour.
Most agencies accept many forms of insurance for payment. If you wish to make payments with private insurance or Medicare for an acute condition, you must use an agency that accepts these types of insurance. If you wish to make payments with Medicaid or Long Term Care Insurance (LTC), you must also use an agency that accepts these types of insurance.

Private caregivers are often less expensive than agency caregivers, but they seldom accept insurance as a form of payment. The patient or the patient’s family will have to use their own money and assets to pay for care. To pay a private caregiver, you must ensure that they sign a conditional waiver and an unconditional waiver. A conditional waiver will prevent the private caregiver from claiming rights to your property. An unconditional waiver should be signed at every pay period and will prevent any disputes about payment in the future.

When it comes to withholding taxes and filing reports with the state and federal government, you must first complete Form W-9, Request for Taxpayer Identification Number and Certification. You should keep this file in your records after completion. Then, you must complete Form 1099-MISC. This form will report your financial information, payment and due taxes, to the Internal Revenue Service (IRS). Form 1099-MISC must be distributed to your private caregiver by January 31 of the year succeeding payment and to the IRS by February 28. Form 1099-MISC is only required if you expect to be paying your private caregiver more than $600 per year.