Ohio Nursing Facility Bond: A Comprehensive Guide

February 1, 2022

Ohio Nursing Facility Bond

This guide provides information for insurance agents to help their customers obtain an Ohio Nursing 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: Greater than or equal to all resident funds held by the facility at any given time
  • Who Needs it: All Ohio nursing facilities that hold residents’ personal funds
  • Purpose: To ensure that residents will receive compensation for financial harm if the facility mishandles their funds
  • Who Regulates Nursing Facilities in Ohio: The Ohio Department of Human Services

Background

Ohio statute 3721.02 requires all nursing facilities operating in the state to obtain a license with the Department of Human Services. The Ohio legislature enacted the licensing laws and regulations to ensure that nursing facilities engage in ethical business practices. To ensure that residents’ rights are not violated, nursing facilities that hold resident funds must purchase and maintain a surety bond to be eligible for licensure. 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 Ohio Nursing Facility Bond?

Ohio requires nursing facilities to purchase a surety bond as part of the application process of obtaining a business license. The bond ensures that residents will receive compensation for financial harm if the facility fails to abide by the regulations outlined in Ohio statute 3721.15. 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.

Ohio Nursing Facility Bond Form

Ohio Nursing Facility Bond Form

How Can an Insurance Agent Obtain an Ohio Nursing Facility Surety Bond?

BondExchange makes obtaining an Ohio 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? 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.

Is a Credit Check Required for the Ohio Nursing Facility Bond?

Surety companies will run a credit check on the owners of the nursing facility to determine eligibility and pricing for the Ohio 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 Ohio Nursing Facility Bond Cost?

The Ohio Nursing Facility bond can cost anywhere between 0.75% to 7% 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 $20,000 bond requirement.

$20,000 Nursing Facility Bond Cost

Credit Score Bond Cost (1 year)
720+ $150
625 – 719 $200
600 – 624 $500
575 – 599 $600
505 – 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 the Bond?

Ohio requires all nursing facilities that hold resident funds to purchase a surety bond as a prerequisite to obtaining a business license. To paraphrase Ohio statute 3721.01, a nursing facility is an institution that provides personal care and/or skilled nursing services to three or more unrelated residents.

The term “nursing facility” includes all nursing homes, residential care facilities, homes for the aging, and veteran’s homes.

How Do Nursing Facilities Apply for a License in Ohio?

Nursing facilities in Ohio must navigate several steps to secure their license. Below are the general guidelines, but applicants should refer to the application packet for details on the process.

License Period – All Ohio Nursing Facility Licenses expire annually and must be renewed before the expiration date

Step 1 – Obtain a Certificate of Need

Applicants seeking to construct a new nursing facility, renovate an existing one, or transfer beds between facilities must first obtain a Certificate of Need (CON) authorizing the project to take place. To obtain a CON, nursing facilities should mail their completed application to the following address:

Ohio Department of Health
Division of Quality Assurance
Certificate of Need Program
246 North High Street
Columbus, Ohio 43215

Applicants must submit all required documents, and pay an application fee that is either $5,000 or 1.5% of the renewable portion of the capital expenditure proposed, whichever is greater, to a maximum requirement of $20,000.

Step 2 – Pass Inspection

Nursing facilities must pass an inspection conducted by the State Fire Marshal prior to submitting their license application

Step 3 – Purchase a Surety Bond

Nursing facilities that hold resident funds must purchase and maintain a surety bond

Step 4 – Complete the Application

After obtaining their CON, nursing facilities may apply for licensure. All Ohio Nursing Facility License applications should be mailed to the following address:

Ohio Department of Health
Revenue Processing #3212
PO Box 15278
Columbus, Ohio 43215

Nursing facilities must complete the application in its entirety, and submit the following items:

    • The applicant’s CON
    • 8½” x 11” drawing of the facility clearly showing all baths, toilets, rooms, room numbers, and the number of beds in each room
    • Copy of the facility’s Certificate of Occupancy
    • Copy of the facility’s fire inspection report
    • Notice of Readiness 

All applicants must pay a $320 fee for every 50 beds the facility holds.

Step 5 – Enroll as a Medicare/Medicaid Provider

Nursing facilities that wish to receive Medicare/Medicaid reimbursements must enroll as Medicare/Medicaid providers. To enroll as a provider, nursing facilities must complete the following forms:

All forms must be mailed to the following address:

Ohio Department of Health
OHAL/BRO – Certification Unit
246 North High Street, 3rd Floor
Columbus, OH 43215

The Ohio Department of Health will conduct an on-site survey of the facility to ensure that the facility is in compliance with all applicable requirements prior to accepting its provider enrollment.

How do Ohio Nursing Facilities Renew Their License?

Nursing facilities in Ohio should mail their completed renewal application to the following address:

Ohio Department of Health
Revenue Processing #3212
PO Box 15278
Columbus, Ohio 43215

All Ohio Nursing Facility Licenses expire annually and must be renewed before the expiration date.

What are the Insurance Requirements for Ohio Nursing Facilities?

Ohio does not require nursing facilities to obtain any form of liability insurance as a prerequisite to obtaining a business license. Nursing facilities that hold resident funds 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 Ohio Facilities File Their Bond?

Nursing facilities should mail their completed bond form, including the power of attorney, to the following address:

Ohio Department of Health
Revenue Processing #3212
PO Box 15278
Columbus, Ohio 43215

However, nursing facilities that are enrolled as Medicare/Medicaid providers should mail their bond to the following address:

Ohio Department of Health
OHAL/BRO – Certification Unit
246 North High Street, 3rd Floor
Columbus, OH 43215

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, address, and Medicaid provider number of the entity/individual(s) buying the bond
  • Surety company’s name and state of incorporation
  • Bond amount
  • Date the bond goes into effect
  • Date the bond is signed
  • Witness signatures for the facility and the surety company

What Can Ohio Nursing Facilities Do to Avoid Claims Against Their Bonds?

To avoid claims on their bonds, nursing facilities in Ohio 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 Ohio?

Ohio 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 Ohio Nursing Facility Customers?

Ohio 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.

2022-03-15T17:47:32-04:00