Skip to main content

«  View All Posts

Top 5 Features to Look for in a Payroll Service as a Home Healthcare Agency

November 3rd, 2023 | 5 min. read

By Shelby Betts

There’s no genuine way I can write this article unless I make a few confessions to you.

#1. I do not own a home health care agency.

#2. I am a consultant for a payroll company, so that means I have a strong bias.

#3. I mostly work with growth-minded entrepreneurial owners who have agencies that are focused on growth, care about their employees, and can make changes quickly for their organization.

So, if you’re the HR director of a 500-location conglomerate, this article is a waste of your time. But if you’re a privately held, growing agency, and you don’t mind a little bias, then join me as I share my insights into the top features you should look for in payroll service (based on thousands of conversations with owners just like you!)

Now that’s out of the way, you may be evaluating which payroll company is right for your agency. The three most important questions you need to ask when evaluating is this:

  1. Do I have the right team in place to support a great HR tech?
  2. Do I have good processes in place for managing new hires, training, and developing, paying employees, and managing compliance?
  3. Does the platform I’m considering support my answers to #1 and #2?

The way you answer these questions is crucial as you start evaluating companies. If you don’t have a good team in place, you can buy the most expensive, customizable software, and your team is going to be unable to use it. You might be better off with less software but a more hands-on approach to service. If you are hiring hundreds and hundreds of employees and have a good hiring team, maybe you should look at the cheapest possible solution and rely on an internal team of experts instead of an outsourced team.  There’s nothing more frustrating than buying a Cadillac when a Camry would have done the trick. Really the answer to which company you choose does not lie in the features you need, but in the services you want to outsource like tax compliance, automated payroll, health insurance benefit administration, and more.

As I make my own tech purchasing decisions for my sales team, here’s the lens I use when justifying the expense:

Tech – will this tech reduce my workload, improve our efficiency, and reduce compliance fears?

Process – Does the partner I’m considering have expertise that I can rely on to create, build upon, or improve my current process?

Opportunity – what can that company help me with that I may not be ready for today, but that I might enjoy 18 months from now?

So, let’s finally explore some things I think you should be on the lookout for in terms of Tech, Process, and Opportunities as you grow and expand your agency.

Feature #1: Full Mobile Experience with Automated Payroll Processing

Your employees are always on the go, AND they already have a ton of technology they have to use daily. To avoid tech fatigue, I think it’s best to keep your employee in your EMR system for as many things as possible – so timekeeping, reimbursements, mileage, and of course patient logs should be there. If you run a hospice agency, you may consider using the time and attendance functionality that a payroll company offers, but this is the exception in my opinion. Home care and home health should track visits, shift differentials, and time in their EMR system to make it easy for their staff. There are a few things that need to be done in a payroll system, so be sure these are items that your employee can do on the go with push notifications, apps, and reminders on their phone.

When you work with a payroll company, make sure their platform is optimized for mobile experience so your employees can:

  • Onboard
  • Sign documentation
  • Upload certifications and registrations
  • Fill out their i9, w4, and direct deposit info
  • Request time off
  • Get notified about upcoming classes and training
  • Complete learning certifications and training

This saves your admin team time and reduces errors in your payroll processing by putting the responsibility of data entry on the employee. That frees up your HR or admin person to approve requests, verify data, and ensure accuracy.

Lastly, the benefit of your payroll company calculating wages, deductions, and taxes for caregivers, health aides, nurses, etc. reduces manual errors and ensures compliance with federal, state, and even county tax laws. Good payroll companies will offer various pay options like direct deposit, pay cards, printed checks, and even on-demand pay options. Also, a good service partner should handle your 941s, new hire reporting, and child and wage garnishment support at no additional cost to you.

[fl_builder_insert_layout id=9297]

Feature #2: G/L Coding Recommendations and CPA access

Most agencies have a Medicare cost report to file, and your CPA will usually update your G/L codes and labor fields in your payroll platform so that you’re tracking appropriately all year long. If you’re comfortable, you can provide your CPA access to your payroll system so they can pull payroll reports as they need them. This enables them to make changes as the rules change, pull reporting for your books and taxes, and of course, ensure that the cost report is filed on time. This is absolutely something that both your CPA and your payroll company should work together to do for you. Be sure to ask the payroll company if they understand what labor G/L fields are required, and why you need things set up a certain way. This is an easy and simple way to avoid a lot of work at year-end. If you’re also evaluating bookkeeping and taxes for your agency, Knight Home Care Financial (TX) is the cream of the crop.

Feature #3: Benefits & Health Insurance Administration

It’s not likely you’ll be able to work with a payroll company for your time and attendance needs since most of your visits will need to occur in your EVV system (home care) or your EMR system (home health and hospice.) To reduce the number of partners you work with, find out if your payroll company offers workers’ compensation insurance, group health insurance, cyber liability, key man insurance, and find out about the extent of administrative support they can provide.

If you don’t have a large enough staff internally to effectively manage your people – you can look to your payroll company to offload responsibilities like open enrollments, managing benefit deductions, communicating with your carriers, and managing section 125 compliance. Because your payroll company is withholding deductions from your employee paychecks today, it makes sense for insurance and payroll to be in the same place. You get to avoid being the middleman of “Hey insurance broker, I need you to add this employee to Cigna” and “Hey payroll company, can you create a benefit deduction for XX employee?”

The ease of consolidating these needs is great, but your payroll company can be on the lookout for Affordable Care Act compliance on your behalf. Given the numerous agency compliance responsibilities you must manage, delegating tasks related to HR compliance, such as ACA compliance, is an ideal approach when possible.

Feature # 4: Integration Options with Time & Attendance

Because you manage several shift differentials, visit types, and deductions, you’ll want to find out how you will need to get these weekly or bi-weekly hours into your payroll system.

  • Does this require an import/export?
  • Does your EMR software integrate with the payroll company?
  • Can someone else enter hours, use an .ftp file, or do you need your team to do it?
  • Do they integrate?

There are many ways to get data into your payroll system. All can be good answers. Dive into the specifics with the payroll company and see what suggestions they have. Personally, I have reservations about integrations, as time data is often incomplete or inaccurate before payroll processing. I tend to prefer an import/export method if only to double-check that the wages paid align with what employees are owed. Keep in mind that each payroll company offers different choices, and your level of tech-savviness will determine the most suitable solution for your needs.

Feature #5: Outsourced HR Compliance

You are in a highly regulated, ever-evolving compliance-driven industry, so looking for a payroll partner that can be responsible for federal and state HR compliance is ideal. You don’t need to be worrying about classifying employees, carefully managing overtime hours, and training your team on sexual harassment. Look for a payroll company that can:

  • Create your employee handbook
  • Take a proactive approach to your hiring strategy
  • Supply labor law posters to your offices
  • Offer access to an HR expert when issues arise
  • Ensure compliance with regulations like FMLA, ACA, HIPAA Privacy, CDC, OSHA, and FLSA
  • Maintain proper recordkeeping

Elevate Your Home Healthcare Agency

These are the features that are best to look for if you own a home care agency. Every state will have different compliance rules, so be sure to look for partners who understand your federal and state requirements as well as the intricacies of in-home care.

People are the driving force behind your business's success, so investing in your employees through competitive compensation, well-defined processes, and fostering a "Best Places to Work" culture is essential for attracting and retaining top talent in your agency.

For more home healthcare resources, you can visit our home care page and explore home healthcare pay rates here.