With the home care industry expected to grow even more competitive in 2025, agency owners and senior leaders are searching for ways to better scale their workforce, attract top talent, and grow their business without sacrificing their bottom line.
In this webinar we dive into the most common strategies we're hearing from home care agencies looking to accelerate their growth in 2025.
Transcript
Brian Cottone Jr.:
Good afternoon everyone. Welcome to today's webinar and thank you for joining. I will be talking today about the home care staffing crisis and how you can overcome hiring and retention headaches in the new year. My name is Brian Cottone Jr. I'm the Vice President of Sales at Vitable and I'll be guiding you through this session today. So as we all know, before we get into the agenda, the home care staffing crisis has created significant challenges for agencies across the country. From caregiver turnover to endless compliance mandates, staying competitive has never been more important and challenging. So our session today aims to tackle each of those topics and provide actionable insights to help you sustain and grow your agency with confidence.
So here's what we'll be covering today. First, attracting and retaining employees. Arguably the most important piece of your business is your people. Second, we'll be talking about navigating compliance during growth. We all know about growing pains and there's no gain without pain during growth. Third, we'll be talking about improving time to hire and onboard. Speed is the name of the game in the home care industry. And finally, we'll wrap up with a live Q & A session, time permitting. So be sure to stick around and have your questions ready to go. You can also add them into the chat throughout.
So if you haven't heard of us before, Vitable is an affordable ACA compliant health benefit program made specifically for home cares frustrated with expensive and complex insurance plans. Our founder and CEO, actually his family owned a home care company and he saw the struggle up close and personal, mainly around three things. Health insurance options for home cares are scarce, expensive and really hard to get set up. Two, many employees make too much to be eligible for Medicaid but not enough to afford traditional health insurance. And then three, the pre-employment testing during hiring hindered companies to a point, in the home care industry specifically, to a point where it affected the growth of the company. So that's how Vitable came to be. And if you're curious, Vitable is a play on the words vital and affordable.
So before we dive into this first topic of attracting and retaining top talent, we're going to do a poll. Okay, so the poll is "What is the biggest barrier to growing your agency?" Here are the choices. One, difficulty attracting and recruiting quality talent. Two, difficulty retaining quality employees. Three, slow new hire onboarding process and four, just can't afford benefits like health insurance. So we'll give about 20 to 30 seconds here to vote. I know it might be tempting to select most of these, but we're looking for one answer. Okay, so here are the poll results. Looks like the top choice was difficulty retaining quality employees. Next was can't afford benefits like health insurance - just too costly. Third was difficulty attracting and recruiting quality talent, and finally slow new hire onboarding process. So we'll touch on all of these today. Thanks to those who participated in the poll.
So let's dive into the first key topic here, attracting and retaining employees. So according to a benchmark report by Activated Insights, the average turnover rate is nearly 80% for caregivers, which is a silent but deadly hidden cost, often amounting to losses as high as $252,000 annually. That's really unattainable for a business that continues to grow. So to address this, agencies must prioritize not only offering better benefits but improved employee experience with those benefits. There's two other reports we wanted to reference here, one by OnPay and another by Paychex, an HR and payroll leader. Health insurance consistently ranks as the number one desired employee benefit, yet many agencies struggle to even find cost effective plans given how razor thin the margins are in the home care space. So quality benefits and affordability are number one and number two, in almost every case when I talk to home cares. Despite all of this supporting data, many agencies still don't offer benefits and I think we talked about some of the reasons why: hard to find, not cost effective. Less than 50% of agencies with less than 85 employees, as you see here under agency size and a major health insurance plan that's less than 50%, are offering any sort of health benefit. In comparison, other industries across the board, closer to 67% of companies in that size are offering health benefits to their hourly employees. We believe the main reason, aside from the obvious cost and fit for home care employees, is lack of innovation. And lack of innovation specifically in the home care space, which is why Vitable is here today.
So we got through attracting and retaining top talent, very, very important. Next we want to talk about navigating compliance as you continue to grow your business, this is arguably just as important as attracting and retaining top talent and you'll see why here. Poll number two: "What is your biggest challenge in offering affordable health benefits that employees actually value?" The first option would be the high cost of health benefit plans. Second would be limited options tailored to caregiver needs. Third, lack of employee interest in benefits. And finally, difficulty navigating the ACA compliance portion of offering health benefits while staying within budget. We'll give you about 15 to 20 seconds here.
Alright, let's see how we did. Looks like the high cost of health benefit plans. Number one, not a surprise. Cost is usually the biggest hindrance for companies in the home care space to get health benefit plans. Second, difficulty navigating ACA compliance while staying within budget. Third, limited options tailored to caregiver needs. And then finally, lack of employee interest and available benefits. This is what we see when we talk about what's important when it comes to offering benefits. We talk about cost, we talk about quality service and employee interest. And employee interest is always very important, but it's not the thing that's stopping home cares from offering. It's more so the cost and the fit of the benefit plan. So another reason to offer benefits as they are sought after by the job market.
Did you know compliance with ACA requirements is really critical. One in four home care agencies were audited for non-compliance with the ACA in 2023. These fines can reach up to $4,350 per employee for certain violations. Understanding how you fit into the ACA compliance is very important, such as calculating full-time equivalents, offering minimum essential coverage plans and essentially avoiding these penalties altogether should be a top priority. And we'll talk through some of these fines, how they work and the cost that potentially could fall on your shoulders. So home cares are most likely or more likely to be audited by the IRS due to a couple things. And why are home cares being singled out? Well here's why. One high count of hourly workers, two, there's high turnover rates which could affect the amount of full-time employees that a company has. It's fluctuating constantly. Third, low operating margins and four, data collection errors.
So let's look at the ACA, short for Affordable Care Act, and let's make sure we understand what's inclusive of this. So there are three parts to consider that Uncle Sam, AKA the IRS, are in charge of enforcing. The first is applicable large employers. So an applicable large employer, also known as an ALE is an employer with an average of at least 50 full-time employees. An applicable large employer may be a single entity or it may consist of a group of related entities. We'll talk about common ownership shortly and how that affects if you do have multiple businesses. Second, minimum essential coverage. So this is the base plan that will give your employees basic levels of healthcare for preventative care and wellness services. This has to be offered to at least 95% of all your full-time employees. So essentially everybody who's full-time, which is 30 or more hours per week, must be offered minimum essential coverage plans if you are 50 plus full-time employees. And then finally, minimum value. So there is a minimum value component alongside minimum essential coverage. So this requires employers to offer additional healthcare services for things like physicians and in-patients. And there needs to be an affordability threshold, which essentially tells you that you can't charge your employees more than 2025's rate of 9.02% of their annual income.
So when I'm talking to home cares and I've met with over 1500 in the last four years at Vitable, a lot of times I'll get, after we talk through a slide like this is: "Am I an ALE? How do I know?" So let's talk about that. How do I calculate the full-time equivalent employees at my agency? So full-time employee counts. It's essentially an equation of how many total hours worked during a year. So this could be part-time or full-time employees because as you see here, it's a full-time equivalency, not just a full-time employee divided by the number of available full-time hours in a year. That will equate to your FTEE number or full-time equivalent employees. A pro tip here, we're not asking you to do this math equation for your entire payroll. Pro tip is if you have a payroll service, they have a report that you can generate that will pull your full-time equivalency for any given period. And if you don't have a payroll service right now and you're thinking about switching from doing it manually or in-house to a payroll service, we have a lot of home care payroll providers that we work with that we can definitely refer you to.
So we talked about a company that owns multiple home cares. So common ownership, let's talk about that. If you own multiple businesses or agencies and collectively among those agencies or businesses you are over the 50 FTE mark, you would be considered an ALE and must offer ACA compliant health benefits to your businesses. So an example would be if you had 35 employees at one and 31 at another and you are the sole owner of both, that would be considered common ownership and you would add those two numbers together and that would be if it is over 50, in the example I gave it is, you would be considered an ALE for both of those businesses.
So what are the implications if one of your employees receives healthcare subsidies from the marketplace? So in short, what are the implications of these penalties if I am flagged or if the IRS catches on that, I might be over 50 and I'm not offering anything? Well the reason we have this slide titled this way is when an employee goes to the healthcare exchange or the marketplace and they go shop for health benefits, that will potentially trigger the IRS based on how they respond to a few questions when they go through the enrollment process. Does your employer offer minimum essential coverage? Do they offer a minimum value of services? If they respond no to those questions, you could potentially be flagged for either of these two penalties. So a lot of times agency owners might be at 50 plus and never receive a letter from the IRS and businesses running smoothly.
Why do this? I haven't been flagged by the IRS yet. I think the chance of your employee or any of your employees going to the marketplace could potentially flag you at any given time. And the IRS is wrapping up 2023 and we'll be looking at 2024 very soon. So if you're at 50 or close and you don't have a minimum essential or minimum value ACA compliant plan in place, this should be top of mind to make sure you are steering clear of these penalties. So here are the two fines you'd be subject to if you don't offer healthcare to your team. So there's a part A and a part B. So let's talk about the part A. So the part A penalty for 2025 is $2,900 per employee. So this will be incurred to the employer if they fail to offer a minimum essential coverage, or otherwise known as MEC plan, to at least 95% of their employees and dependents.
The last sentence there, and we'll do a quick example of this, but they will fine you 2,900 per employee if you fail to offer that MEC plan. And they'll take the first 30 off the top. So it's basically minus 30 of your FTE, you'll be fined 2,900 per employees. Part B on the other hand is a little different. So this will only be incurred if two things happen. One, you do offer a plan but it's not affordable and you're charging your employee too much money, which is over the 9.02% of their annual income or it does not provide minimum value. Or if you're not offering any benefits and you're over this mark, if an employee goes to the marketplace and receives subsidized coverage, you would potentially be fined $ 4,350 for 2025 for that particular employee. And if you have 10 that go and you're not covered for part B, you could be looking at a fine of 4,350 times 10, which is over $43,000.
So part A penalties, I was referring to this, this is often referred to as the sledgehammer penalty for obvious reasons. This is levied when an employer does not offer a MEC plan to at least 95% of their full-time employees and dependents. And remember this is if in this example you have 60 full-time employees, so they're going to take 30 off the top and they would only penalize you for the remaining, which would be 30 in this case. 30 x 2,900, which is the penalty for the part A. You're looking at an $87,000 penalty. Now, the IRS looks at each year you were out of compliance. So if there's been more than one year, this fine could increase for years past. For any agency on the call, most of you are probably trying to grow your business. This type of penalty can be detrimental to your business.
It could really get you stuck in the mud. So we really put a high focus on this for the folks that are not too familiar with ACA or are not familiar, or in the know, with how many full-time employees they have and the equivalency. Next up is part B. So the part B penalties, these are incurred if your company's employer sponsored coverage is either unaffordable or does not meet the minimum value standards. So this fine is given when an agency has an employee go to the marketplace, they receive a subsidy, also known as a premium tax credit. You'll see PTC here for short. If that person goes and the IRS deems that the coverage is unaffordable or there's no coverage that meets the minimum value, you would be fined 4,350 times the amount of employees that got a subsidy premium tax credit through the healthcare exchange. In this example, we're looking at two employees and you'd be looking at another penalty potentially if you had nothing in place, the 87,000 plus 8,700. All of these numbers are too big. We want to make sure that you have $0 in penalties so you're fully prepared and compliant for the ACA mandate in 2025.
I wanted to share a success story here. This was a company I worked with directly. They came to us looking for an affordable ACA compliant health plan. The initial thing that got them thinking about health benefits was back in April of 2023, a lot of their employees lost Medicaid access and they started to see a lot of caregiver churn, almost double of what they saw before. So they started to think maybe benefits can help retain these employees. But the tipping point was a letter from the IRS for ACA non-compliance of $191,000. So that was a bad letter to receive and they reached out to us right away. The owner not only wanted to stay competitive with hiring and retaining those employees that were losing Medicaid coverage, but they wanted to avoid any, what I call existential, IRS penalties for the business. This motivated them to contact us and when we rolled the plan out and got them compliant, not only did we keep them covered from future penalties, but we were able to decrease their caregiver turnover over the last year by 206%. And we did the math on that. That's about $130,000 in savings. So very impactful for that home care of 200 plus employees in Pennsylvania.
Okay, we're almost there. So we are at the fourth bullet here, which is improving time to hire and onboard. So we're going to start with another poll. It's our last poll, I promise. What is your biggest bottleneck in the pre-employment testing process for caregivers? One, limited access to convenient testing locations. And when we talk about pre-employment testing, this could be drug testing, physicals, TB testing - it varies by state. Second option, high costs associated with the required testing. Three, delays in getting tests completed and getting the results back to the company. And then finally, complexity of managing compliance and documentation around the testing.
Give you about 10 seconds to answer here. All right, let's see where we're at. We had a very close call with high costs associated with required testing coming in at number one. Next up was delays in getting tests completed and processing results. Limited access to convenient testing locations was three. And then finally, complexity of managing testing compliance and documentation came in four. So we're going to talk about this now. If I had a nickel for every time an agency told me that pre-employment screenings during their hiring process was a headache, I'd probably be on the beach somewhere.
So caregivers, and this is a poll that was done, caregivers who said they had a good onboarding experience were 88% more likely to feel secure in their roles and employment with the company. That sense of security translates directly into increased engagement and lower turnover. So choosing the wrong method, we're going to focus on TB testing here, which varies by state, but this is a very common test that's required. So there's different types of TB tests, there's QuantiFERON Gold, which is a blood draw. That's the suggested test for a couple of reasons that we'll talk about. Next is probably the more common two-step PPD. We have you with a sign there, think twice about this one. It's a very antiquated test, takes multiple visits to get complete and it's very, very clunky. And then finally x-ray. We don't advise this. This is better for positive readings and kind of a second step if there is any sort of positive reading.
But the QuantiFERON Gold test, the reason this is the preferred and suggested test, is that there's only one visit required. It's a blood draw and with Vitable results are delivered electronically directly to your business via an online portal in just three to five days. This also doesn't cause boosting, which doesn't affect the BCG vaccine, which a lot of caregivers have, which if you do the two step, there might be a false positive if that vaccine was given to the individual at some point in their life. So not only is the two step requiring multiple visits prone to false positives, it requires a lot of manual work to make sure the employees are going back to get the second step, which has to be done within a two to three day period. Once that's missed, they have to start over. So it's very clunky. Then we talked about x-rays. This is also an outdated method. Trouble with early detection is one thing, but exposing employees to radiation is no good, so we don't advise.
So re-imagining caregiver onboarding. So we talked about the problem with two-step PPD, and we like to break this up into the current state versus the ideal state. So the current state is most home cares are using a two-step PPD. A lot of times they're not involved at all with the process and they just have their new hires during the onboarding process go out and find a two-step PPD, whether it's through their doctor, the clinic or an urgent care. The problem with that is that's leaving too much to chance and there's no real process there. This usually drags out the onboarding time and you see a lot of drop off within your candidates. I've seen as high as 60 to 70% of candidates dropping off when there's no process in place and they're required to do the two step. This is ultimately going to lead to slow billable hours and it's going to affect your growth as a company, most specifically the revenue because if you have the clients to fill cases with and you're not able to hire fast enough to keep up with those cases, you're leaving a lot of money on the table. So the ideal state is replacing the antiquated two-step PPD or even the x-ray with single step QuantiFERON Gold blood draw.
Through our platform caregivers will automatically receive a lab voucher and a list of testing locations near them they can walk into during normal operating hours. Once the lab and the test is completed, the company will receive those particular results and it happens within three to five business days. So it's a very tight process and it's the ideal state for home cares that are looking to grow quickly. Okay, we've got about three minutes, we're right on time. So by streamlining TB testing, home care agencies can increase caregiver retention by 3X and more importantly I think is decreasing the time to onboarding by up to 12 days, which is essentially two weeks. If you think about how many people you're bringing in or potentially could have as applicants, you can get 30 to 50% more of them to get the test and start with the company in a three to five day window versus 50% of those applicants taking two to three weeks. Think about how much money that means for the business and your growth objectives.
And that is our webinar today with two minutes to spare. I believe we have some time for Q&A, but before we jump into that, my name again is Brian Cottone Jr. I'm the vice president at Vitable. That's my direct cell phone number there and my email. You could also scan the QR code if you want to get time on my calendar directly. I really appreciate you joining today and hoping we can help, even if it's just consulting with you about how we can improve some aspects of your home care or if you're interested in any of our services. We're happy to talk.
.jpg)
