It’s a big decision, and families often wonder if they should go through an agency or just hire someone directly. Here’s a detailed guide to the risks and responsibilities that come with the do-it-yourself route.

1. Workers’ Compensation Coverage

  • What it is: Insurance that covers medical bills and lost wages if a caregiver gets hurt while working.
  • Why it matters: Without it, the family that hired the caregiver could be responsible for those costs. Even a simple injury — a back strain from lifting, a slip on the stairs — can add up to thousands in medical bills and lost wages.
  • Agency advantage: Agencies carry this coverage, so families don’t have to worry about unexpected expenses.

2. Liability and Legal Risks

  • Licensure limits: Caregivers are trained and licensed for specific tasks. If they step outside those boundaries (say, administering medication such as insulin or handling medical devices they’re not authorized to use), the family could be held liable.
  • Home accidents: If the aide accidentally damages property or injures a visitor, the family may be responsible.
  • Agency safeguard: Agencies monitor licensure and scope of practice, protecting families from these risks.

3. Payroll Taxes & Employment Law

  • Employer status: When you hire privately, you become the employer. That means you’re responsible for withholding Social Security, Medicare, and unemployment taxes.
  • Penalties: Failing to file correctly can lead to IRS fines, back taxes, and even legal action.
  • Overtime rules: Caregivers are often non-exempt employees, meaning overtime pay is required. Families who don’t comply risk wage disputes.
  • Agency clarity: Agencies handle payroll, taxes, and compliance automatically.

4. Medical Bills & Health Insurance

  • No coverage: If your aide gets sick or injured outside of work, they may expect you to help with medical costs — especially if they don’t have insurance.
  • Unexpected claims: Some aides may try to classify personal medical issues as work-related, leaving families to dispute costly claims.
  • Agency safeguard: Agencies provide health benefits or clear boundaries, so families aren’t drawn into medical disputes.

5. Background Checks & References

  • Risk of incomplete vetting: Families may rely on a quick interview or a friend’s recommendation. Without a professional background check, you could miss criminal history, abuse records, or falsified credentials.
  • Reference pitfalls: References provided by the aide may be friends or relatives, not actual employers.
  • Agency safeguard: Agencies run fingerprint checks, verify employment history, and confirm training certifications.

6. Coverage Gaps

  • Direct hire challenge: If your caregiver gets sick, takes a vacation, or leaves suddenly, you’re left scrambling.
  • Continuity of care: A sudden absence can leave your loved one without support, sometimes in unsafe situations.
  • Agency solution: Agencies provide backup staff and continuity of care.

7. Financial & Legal Exposure

  • Wage disputes: If an aide claims unpaid hours or mistreatment, families may face Department of Labor complaints.
  • Unemployment claims: If you terminate the aide, they may file for unemployment benefits, which you, as the employer, must pay into.
  • Insurance gaps: Homeowner’s insurance often doesn’t cover employment-related claims.

8. Emotional & Practical Stress

  • Managing schedules: Families must coordinate shifts, track hours, and handle payroll.
  • Conflict resolution: If disagreements arise, there’s no neutral third party to mediate.
  • Agency support: Agencies handle logistics, compliance, and disputes, leaving families free to focus on their loved one.

9. Homeowners Insurance Gaps

Families often assume their homeowners’ insurance will protect them if something goes wrong with a privately hired caregiver. In reality, coverage is limited:

  • Injury to Caregiver:

    • Standard homeowners’ policies exclude coverage for household employees injured on the job.
    • If a caregiver slips, strains their back, or suffers a serious fall, the family may be personally responsible for medical bills and lost wages.
    • Only a workers’ compensation endorsement workers’ compensation endorsement

  • Liability Claims:

    • Homeowners’ liability coverage may apply if a caregiver sues for negligence (e.g., unsafe conditions in the home).
    • Liability claims are rare (just 2.1% of homeowners’ claims in 2023, per NAIC), but they are among the most expensive, often involving medical expenses and legal settlements.

  • Theft or Dishonesty:

    • Property damage and theft account for 97% of homeowners’ insurance claims overall.
    • Theft by a caregiver is difficult to prove and often excluded unless you carry a fidelity bond fidelity bond or employee dishonesty coverage.
    • Even if covered, payouts may be capped at a few thousand dollars.

  • Medical Payments Coverage:

    • Some policies include small “medical payments” coverage (often $1,000–$5,000) for guests injured in the home.
    • This does not apply to employees, meaning it won’t cover caregiver injuries.

Why This Matters:

  • In 2023, 5.3% of insured homes filed a claim, with average payouts of $20,062 per claim (Insurance Information Institute).
  • Liability claims, though only ~2–3% of cases, are among the most expensive because they involve lawsuits and settlements.
  • Without proper coverage, families hiring privately risk tens of thousands of tens of thousands of dollars in out-of-pocket costs if a caregiver is injured or makes a claim.

Final Thought

Hiring directly may look cheaper on paper, but the insurance gaps are real and costly insurance gaps are real and costly. Homeowners’ policies rarely protect against caregiver injuries or theft, leaving families exposed. Agencies carry workers’ comp, liability, and bonding coverage precisely to shield families from these risks.

State-licensed home care agencies exist to take these worries off your plate, so you can focus on what really matters: your family’s comfort and care.

Medical Consulting and Management – 13600 Aqua Lane, Suite 100, Rockville, MD 20850
(301) 424-5539
info@mcmhomehealth.com