Costs to Operate


 

A Personal Care Agency is responsible to pay matching employer taxes, workman compensation policies, general liability policies, federal unemployment, state unemployment, $20,000 Surety Bond, $50,000 Surety Bond, Paid Time Off and Holiday Pay. 

These costs break down as follows per hour:

$.29      Workman Compensation Cost Per Hour

$1.01     Matching Federal Tax Cost Per Hour

$.80     FUTA Cost Per Hour (up to $7000 earned per employee)

$.16       State Unemployment Cost Per Hour

$.40     PTO Cost Per Hour 

That Totals $2.66 per hour per employee above an beyond their hourly wage. 

As of 2019 all Choice (majority of MN clients) PCAs have a wage floor of a minimum of $13.25 per hour. On average it costs a Personal Care Agency $15.91 per employee per hour. 

Minnesota reimbursement rate for PCA services is currently $17.80 per hour.

After paying to employ a Personal Care Assistant there is a total of $1.89 per hour per employee leftover. 

That $1.89 an hour does not include the $.60 per hour it costs to supply general liability.

That $1.89 an hour does not include employing a mandatory Qualified Professional (with an average cost of $35,000-$50,000 per year).

That $1.89 per hour does not include administrative staff to complete the compliance duties as mandated by MN DHS, payroll, hiring processes and overall agency management.  

To place in perspective if an agency were to bill 4000 hours in a pay period they would have $7500 leftover after paying PCAs.

$7500 to pay the following:

$1700     Average Qualified Professional

$1000     Average Office Staff

$1700     Average Administrator

$3500+ Rent, Lights, Phone, Utilities, Office Supplies, EHR Software 

These costs drop the leftover amount down to $1.41 minimally per hour. 

Note: These are just the absolute basic costs to operate. MN DHS requires each employee complete a background check paid for by the agency. MN DHS requires a PCA Provider Number which can take from 30-60 days to obtain. The PCA Agency is responsible for paying for the employee during this waiting period without being able to bill for the hours they are working. This could be anywhere from $500-$4000 biweekly that comes off of the $7500 operating funds. This, in itself puts a major strain on an agency.