How to start a home care agency in California

Step 1: Set up the business

• Form your LLC or corporation with the California Secretary of State (the application asks for your articles)
• Get an EIN from the IRS and register as an employer with the EDD before your first payroll
• Get a business license from your city or county
• Decide what you will offer: non-medical personal care is an HCO license from CDSS; skilled nursing is a home health agency license from the Department of Public Health

Step 2: Line up insurance before you apply

Health and Safety Code section 1796.37 lets CDSS license an HCO only after it submits proof of three things. Insurance information is its own section of the application (B6), and the bond has its own form (HCS 402), so you need coverage bound or ready to bind when you mail the packet.

• General and professional liability of at least $1,000,000 per occurrence and $3,000,000 aggregate
• A workers' compensation policy covering your home care aides, shown by policy number, dates and carrier
• An employee dishonesty bond with third-party coverage, minimum $10,000, so theft from a client is covered and not just theft from you

Step 3: Assemble and mail the application

The application has two parts. Section A is the state forms: HCS 200 (application), HCS 215 (licensee information), HCS 308 (designation of responsibility), HCS 309 (partnership, corporation or LLC), HCS 402 (dishonesty bond) and HCS 9165 (board of directors statement). Section B is your own documents: articles of organization or incorporation, a job description for each position, personnel policies, a training plan, a program description and your insurance information. Mail everything with the $5,603 fee to the CDSS Home Care Services Branch in Sacramento.

Step 4: Background check and orientation

Once CDSS receives the packet, it sends a notice with your HCO number and instructions for fingerprinting and the online orientation. The applicant must pass the background examination and complete the orientation before the license is issued.

Step 5: Hire, register and train caregivers

• Each caregiver registers on the state Home Care Aide Registry ($35 for two years) and completes a Live Scan background check
• Five hours of entry-level training before their first client visit: two hours of orientation and three hours of safety training
• Five hours of training every year after that; from January 1, 2027 the annual topics must include caring for clients with dementia
• Caregivers are W-2 employees in almost every case. Paying them as 1099 contractors fails California's ABC test and leaves them uncovered by your workers' comp

What insurance costs a new agency

Workers' comp is priced on payroll. California places in-home personal care under class 8827(1), with an approved advisory pure premium rate of $2.794 per $100 of payroll for policies starting on or after September 1, 2026. Two part-time caregivers earning $20 an hour for 20 hours a week is about $41,600 of annual payroll, or roughly $1,160 in advisory pure premium. Carriers add their own expenses and minimum premiums, so real quotes come in higher, but the math shows why small agencies should never be priced on guesses. Pay-as-you-go billing ties each payment to actual payroll, which keeps the upfront deposit low while you grow.