Georgia Long Term Care Facility Bond: A Comprehensive Guide
January 4, 2022
This guide provides information for insurance agents to help their customers obtain a Georgia Long Term Care Facility bond
At a Glance:
- Average Cost: Between 0.75% to 7% of the bond amount per year based on the applicant’s credit
- Bond Amount: Equal to the amount of all resident funds managed by the facility
- Who Needs it: All Georgia long term care facilities that manage resident funds
- Purpose: To ensure residents will receive compensation for financial harm if the facility mishandles their funds
- Who Regulates Long Term Care Facilities in Georgia: The Georgia Department of Community Health
Georgia statute 111-8 requires all long term care facilities operating in the state to obtain a permit with the Department of Community Health. The Georgia legislature enacted the permitting laws and regulations to ensure that long term care facilities engage in ethical business practices. To provide financial security for the enforcement of the permitting law, long term care facilities that maintain residents’ personal funds must purchase and maintain a surety bond to be eligible for a permit.
What is the Purpose of the Georgia Long Term Care Facility Bond?
Georgia requires long term care facilities that maintain resident funds to purchase a surety bond as part of the application process to obtain a business permit. The bond ensures that residents will receive compensation for financial harm if the long term care facility fails to abide by the regulations set forth in Georgia statute 11-8-50-0.6. Specifically, the bond protects residents if the long term care facility in any way mismanages their personal funds. In short, the bond is a type of insurance that protects residents if the long term care facility acts unethically with their funds.
How Can an Insurance Agent Obtain a Georgia Long Term Care Facility Surety Bond?
BondExchange makes obtaining a Georgia Long Term Care Facility bond easy. Simply log in to your account and use our keyword search to find the “care facility” bond in our database. Don’t have a login? Enroll now and let us help you satisfy your customers’ needs. Our friendly underwriting staff is available by phone at (800) 438-1162, email, or chat from 7:30 AM to 7:00 PM EST to assist you.
At BondExchange, our 40 years of experience, leading technology, and access to markets ensures that we have the knowledge and resources to provide your clients with fast and friendly service whether obtaining quotes or issuing bonds.
How is the Bond Amount Determined?
Georgia statute 11-8-50-0.6 dictates that the bond amount must be equal to the amount of all funds in the residents’ account that are maintained by the long term care facility.
Is a Credit Check Required for the Georgia Long Term Care Facility Bond?
Surety companies will run a credit check on the owners of the long term care facility to determine eligibility and pricing for the Georgia Long Term Care Facility bond. Owners with excellent credit and work experience can expect to receive the best rates. Owners with poor credit may be declined by some surety companies or pay higher rates. The credit check is a “soft hit”, meaning that the credit check will not affect the owner’s credit.
How Much Does the Georgia Long Term Care Facility Bond Cost?
The Georgia Long Term Care Facility Bond can cost anywhere between 0.75% to 7% of the bond amount per year. Insurance companies determine the rate based on a number of factors including your customer’s credit score and experience. The chart below offers a quick reference for the bond cost on a $20,000 bond requirement.
$20,000 Long Term Care Facility Bond Cost
|Credit Score||Bond Cost (1 year)|
|625 – 719||$200|
|600 – 624||$500|
|575 – 599||$600|
|550 – 574||$1,000|
|500 – 549||$1,400|
*The credit score ranges do not include other factors that may result in a change to the annual premium offered to your customers, including but not limited to, years of experience and underlying credit factors contained within the business owner’s credit report.
Who is Required to Purchase a Bond?
Georgia requires all long term care facilities that maintain resident funds to purchase a surety bond. Georgia statute 11-8-50-0.6 defines a long term care facility as any intermediate care home, skilled nursing facility, or intermingled home.
How Do Georgia Long Term Care Facilities Apply for a Permit?
Long term care facilities in Georgia must navigate several steps to obtain a permit. Below are the general guidelines, but applicants should refer to the application packet for details on the process.
The below steps focus solely on how to obtain a Georgia Nursing Home Permit
Permit Period – All Georgia Nursing Home Permits do not expire unless suspended, suspended, or revoked. However, nursing homes must apply for a new permit whenever ownership of the facility is transferred.
Step 1 – Purchase a Surety Bond
Nursing homes that maintain residents’ personal funds must purchase and maintain a surety bond in an amount equal to all funds in the residents’ account that are maintained by the nursing home
Step 2 – Purchase Insurance
Nursing homes must either purchase liability insurance (limits not specified) or obtain a self-insurance trust
Step 3 – Complete the Application
- Application form
- Affidavit of Personal Identification
- Certificate of Need that reflects the number of beds the facility has been approved for
- Bill of sale, deed, or lease confirming legal control of the property the facility is on
- Disclosure of Ownership and Control
- Fire Safety Inspection report that approves the proposed bed count
- Nursing Home Patient Transfer Agreement
- Proof of insurance
- Facility’s floorplan including a bed breakdown form (only applicable to nursing homes located in a new building)
Do Georgia Nursing Homes Need to Renew Their Permits?
No, all Georgia Nursing Home Permits do not expire unless suspended, suspended, or revoked. However, nursing homes must apply for a new permit whenever ownership of the facility is transferred.
What are the Insurance Requirements for Nursing Homes in Georgia?
Georgia requires nursing homes to either purchase liability insurance (limits not specified) or obtain a self-insurance trust. Nursing homes that maintain residents’ personal funds must purchase and maintain a surety bond in an amount equal to all funds in the residents’ accounts that are maintained by the nursing home.
How Do Georgia Long Term Care Facilities File Their Bond?
Long term care facilities should submit their completed bond form, including the power of attorney, electronically here. The surety bond requires signatures from both the surety company that issues the bond and from a representative of the nursing home. The surety company should include the following information on the bond form:
- Legal name of entity/individual(s) buying the bond
- Surety company’s name and address
- Bond amount
- Date the bond is signed
What Can Georgia Long Term Care Facilities Do to Avoid Claims Against Their Bond?
To avoid claims on their bond, long term care facilities in Georgia must adhere to the following provisions:
- Do not in any way mishandle resident funds
- Make accurate and timely reports regarding resident funds
What Other Insurance Products Can Agents Offer Long Term Care Facilities in Georgia?
Georgia requires long term care facilities to either purchase liability insurance or obtain a self-insurance trust. Bonds are our only business at BondExchange, so we do not issue any other types of insurance, but our agents often utilize brokers for this specific line of business. A list of brokers in this space can be found here.
How Can Insurance Agents Prospect for Georgia Long Term Care Facility Customers?
Georgia conveniently provides a public database to search for active long term care facilities in the state. The database can be accessed here. Contact BondExchange for additional marketing resources. Agents can also leverage our print-mail relationships for discounted mailing services.