New York Nursing Facility Bond: A Comprehensive Guide
This guide provides information for insurance agents to help their customers obtain a New York Nursing Facility bond
At a Glance:
- Lowest Cost: 1% of the bond amount per year, based on the applicant’s credit
- Bond Amount: Greater than or equal to all resident funds held by the facility at any given time
- Who Needs it: All nursing facilities operating in New York
- Purpose: To ensure that residents will receive compensation for financial harm if the facility mishandles their funds
- Who Regulates Nursing Facilities in New York: The New York Department of Health (DOH)
Background
New York statute 415.26 requires all nursing facilities operating in the state to comply with the DOH’s licensing and administration standards. The New York legislature enacted the licensing and administrative requirements to ensure that nursing facilities engage in ethical business practices. To ensure that residents’ rights are not violated, nursing facilities must purchase and maintain a surety bond prior to conducting business. Additionally, federal statute 483.10 requires all long-term care facilities that hold resident funds in a trust account to purchase a surety bond or other similar form of security. However, the federal regulation leaves the implementation and enforcement of this requirement to individual states.
What is the Purpose of the New York Nursing Facility Bond?
New York requires nursing facilities to purchase a surety bond as a prerequisite to conducting business operations. The bond ensures that residents will receive compensation for financial harm if the facility fails to abide by the regulations outlined in New York statute 415.26. Specifically, the bond protects residents if the nursing facility in any way mismanages their funds. In short, the bond is a type of insurance that protects residents if the nursing facility acts unethically with their money.
How Can an Insurance Agent Obtain a New York Nursing Facility Surety Bond?
BondExchange makes obtaining a New York Nursing Facility bond easy. Simply log in to your account and use our keyword search to find the “nursing facility” bond in our database. Don’t have a login? Gain access 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.
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Is a Credit Check Required for the New York Nursing Facility Bond?
Surety companies will run a credit check on the owners of the nursing facility to determine eligibility and pricing for the New York Nursing 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 New York Nursing Facility Bond Cost?
The New York Nursing Facility bond can cost anywhere between 1% to 5% of the bond amount per year. Insurance companies determine the rate based on several factors including your customer’s credit score and experience. The chart below offers a quick reference for the bond cost on a $10,000 bond requirement.
$10,000 Nursing Facility Bond Cost
| Credit Score | Bond Cost (1 year) | Bond Cost (1 month) |
|---|---|---|
| 625+ | $100 | $10 |
| 600 – 624 | $250 | $25 |
| 575 – 599 | $300 | $30 |
| 500 – 574 | $500 | $50 |
*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 the Bond?
New York requires nursing facilities to purchase a surety bond to ensure the protection of residents’ personal funds deposited with the facility. To paraphrase New York statute 415.2, a nursing facility is an institution that provides 24-hour nursing services to three or more residents, who are not related to the facility’s operator, that do not require general hospital care.
BondExchange now offers monthly pay-as-you-go subscriptions for surety bonds. Your customers are able to purchase their bonds on a monthly basis and cancel them anytime. Learn more here.
What are the Licensing Requirements for Nursing Facilities in New York?
New York statute 415.26 requires nursing facilities to employ a licensed nursing home administrator prior to conducting business.
How Do Nursing Home Administrators Apply for a License in New York?
Nursing home administrators in New York must navigate several steps to secure their license. Below are the general guidelines, but applicants should refer to the application form for details on the process.
License Period – All New York Nursing Home Administrator Licenses are valid for 2 years from the date of issuance and must be renewed before the expiration date
Step 1 – Meet the Initial Qualifications
New York requires nursing home administrators to satisfy all of the following criteria to be considered eligible for licensure.
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- Be at least 21 years old
- Be of good moral character
- Hold a bachelor’s degree (or higher) from an accredited university that includes at least 15 hours of specific education in the following areas:
- Have completed a 12-month administrator in training internship or have 2 years of qualifying field experience
- Have completed a 3 credit hour nursing home administration course
- Receive a passing score on the licensing examination
Nursing home administrators can register to take their licensing exam online here.
Step 2 – Complete the Application
Once the nursing home administrator satisfies all of the requirements in Step 1, they may then submit their license application. All New York Nursing Home Administrator License applications should be mailed to the following address:
New York State Department of Health
Board of Examiners of Nursing Home Administrators
Bureau of Professional Credentialing
875 Central Avenue
Albany, New York 12206
Nursing home administrators must complete the application in its entirety and submit the following items:
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- Addendum A (only for applicants who have completed an administer in training program)
- Copy of the program plan
- Organizational chart for the training site
- Addendum B (only for applicants who have qualifying field experience)
- Proof of salary and title
- Organizational chart on facility letterhead signed by an authorized representative of the facility
- Job description
- Academic transcripts
- Addendum A (only for applicants who have completed an administer in training program)
Nursing home administrators must pay a $40 fee when submitting their applications. Additionally, all license applications must be signed by a licensed notary.
How do New York Nursing Home Administrators Renew Their License?
Nursing home administrators in New York should mail their completed renewal application, including a $40 fee, to the following address:
New York State Department of Health
Board of Examiners of Nursing Home Administrators
Bureau of Professional Credentialing
875 Central Avenue
Albany, New York 12206
Nursing home administrators must complete a minimum of 48 hours of continuing education each renewal period. All New York Nursing Home Administrator Licenses are valid for 2 years from the date of issuance and must be renewed before the expiration date.
What are the Insurance Requirements for New York Nursing Facilities?
New York does not require nursing facilities to purchase liability as a prerequisite to conducting business. Nursing facilities must purchase and maintain a surety bond in an amount that is greater than or equal to all resident funds held by the facility at any given time.
How Do New York Nursing Facilities File Their Bond?
Nursing facilities should mail their completed bond form, including the power of attorney, to the following address:
New York State Department of Health
Corning Tower
Empire State Plaza,
Albany, NY 12237
The surety bond requires signatures from both the surety company that issues the bond and from a representative of the nursing facility. 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
- Bond amount
- Date the bond goes into effect
- Date the bond is signed
What Can New York Nursing Facilities Do to Avoid Claims Against Their Bonds?
To avoid claims on their bonds, nursing facilities in New York must ensure that they:
- Hold all resident funds in a trust account
- Lawfully administer all resident funds
- Accurately report on all resident funds
- Return the full account balance to residents and their representatives when an account is terminated
What Other Insurance Products Can Agents Offer Nursing Facilities in New York?
New York does not require nursing facilities to purchase any form of liability insurance as a prerequisite to obtaining a business license. However, most reputable businesses will seek to obtain this insurance anyway. 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 New York Nursing Facility Customers?
New York conveniently provides a public database to search for active nursing 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.