Workers' Compensation for SDP Caregivers: What It Covers and Why It's Required

A caregiver who hurts their back helping someone transfer from a wheelchair is injured at work. Workers' compensation is the insurance that pays for that injury. If you hire a caregiver under California's Self-Determination Program (SDP), somebody has to carry it, and the model you choose decides who.

What workers' compensation does

Workers' compensation is insurance an employer carries for its caregivers. When an caregiver is injured doing the job, the policy pays the medical costs of the injury and replaces part of the wages lost while the person cannot work. The injured caregiver's claim goes to the insurer rather than to the employer personally.

For a family in SDP, that last part is the point. Without coverage, a family that employs a caregiver could be personally liable for a work injury. With coverage, the claim is handled by the policy. The caregiver gets treated and paid; the family is not the one writing the check.

This is general information, not legal advice. What a claim pays and how it is decided are matters for the insurer and the state's workers' compensation system, and we do not quote those rules here.

Why it is required

California employers are required to carry workers' compensation insurance for their caregivers. A caregiver hired by a family under SDP is an caregiver, not a contractor, and the requirement applies. The Financial Management Service (FMS) is responsible for making sure employment and tax compliance is in place for participant-hired caregivers, and workers' compensation is part of that.

The requirement is not optional and it is not a Sentinel Four policy. Every FMS in the program has to deal with it. Where FMS providers differ is in how the coverage is arranged and what it costs.

Who carries it under each model

SDP has three FMS models. Only two of them involve hiring individuals, so only two involve workers' compensation for a caregiver.

• Bill Payer (code 315). No payroll and no individually hired staff. Vendors and agencies carry their own insurance.
• Co-Employer (code 316). The family recruits, hires, schedules and supervises. Sentinel Four handles payroll, tax filings and workers' compensation coverage. The caregiver is covered under our policy. This is the most common model, and for most families it is the simplest answer to the workers' compensation question.
• Sole Employer (code 317). The participant or representative is the legal employer of record, and Sentinel Four is the payroll agent. The family may secure its own workers' compensation policy, or use ours. Families choosing this model for skilled nursing or specialized staff should settle the coverage question before the first shift, not after.

Understanding the Co-Employer model and Caregivers and Self-Determination go deeper on the models.

What it costs and where the money comes from

Workers' compensation is one of the seven components of employer burden, the costs an employer pays on top of wages. In Sentinel Four's published breakdown it is 6.05% of gross wages, one of the two largest lines alongside the employer share of Social Security at 6.20%.

The money comes out of the participant's budget, through the caregiver's line in the spending plan. It does not come out of the caregiver's check and it does not come out of the family's own pocket. That is why the all-in cost of a caregiver runs about 19% to 25% above the wage. Harbor Regional Center's published table lists Sentinel Four at about 21% under Co-Employer and about 15% under Sole Employer; the difference reflects families under Sole Employer who carry their own policy. Employer burden explained shows the full breakdown and the arithmetic.

If the spending plan carries a caregiver at the bare wage, this cost is one of the things that will run the line short before the year ends.

What to do when a caregiver is hurt

What matters most is that the right people know quickly.

1. Get the caregiver medical attention if it is needed. That comes first.
2. The caregiver tells the family the same day. The family is the supervisor and needs to know.
3. The family, or the caregiver, tells the Sentinel Four case manager the same day. The case manager starts the claim with the insurer and tells both of you what forms follow.
4. Write down what happened while it is fresh: date, time, what the caregiver was doing, what was injured.

Do not wait to see whether the injury gets better. Late reports are harder for everyone, and a caregiver who keeps working through an injury for fear of losing hours is the outcome the insurance exists to prevent.

How Sentinel Four handles this

In the Co-Employer model, Sentinel Four carries the workers' compensation coverage for every caregiver on our payroll, pays for it from the employer burden in the participant's budget, and handles the claim when an injury is reported. In the Sole Employer model we set this up either under our coverage or alongside the family's own policy, and act as payroll agent either way.

Your dedicated case manager is the person to call the day an injury happens. They know the caregiver, the family and the policy, and they will tell you what happens next rather than routing you to a claims line you have never spoken to. The workers' compensation service page and the payroll page describe what is included.