West Virginia Nursing Home Bond: A Comprehensive Guide
This guide provides information for insurance agents to help their customers obtain a West Virginia Nursing Home bond
At a Glance:
- Lowest Cost: 0.75% of the bond amount per year, based on the applicant’s credit
- Bond Amount: 1.25 times the average amount of funds managed by the nursing home in the previous fiscal year
- Who Needs it: All West Virginia nursing homes that manage residents’ funds
- Purpose: To ensure that residents will receive compensation for financial harm if the nursing home acts unethically with their money
- Who Regulates Nursing Homes in West Virginia: The West Virginia Department of Health and Human Resources
Background
West Virginia statute 16-5C-6 requires all nursing homes operating in the state to obtain a license with the Department of Health and Human Resources. The West Virginia legislature enacted the licensing laws and regulations to ensure that nursing homes engage in ethical business practices. To provide financial security for the enforcement of the licensing law, nursing homes that manage resident funds must purchase either a surety bond or commercial insurance 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 West Virginia Nursing Home Bond?
West Virginia requires nursing homes to purchase a surety bond or commercial insurance as part of the application process to obtain a business license. The bond ensures that the public will receive compensation for financial harm if the nursing home fails to abide by the regulations set forth in West Virginia statute 16-5C-7. Specifically, the bond protects residents if the nursing home in any way mismanages their funds. In short, the bond is a type of insurance that protects residents if the nursing home acts unethically with their money.
How Can an Insurance Agent Obtain a West Virginia Nursing Home Surety Bond?
BondExchange makes obtaining a West Virginia Nursing Home bond easy. Simply log in to your account and use our keyword search to find the “nursing” 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.
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Is a Credit Check Required for the West Virginia Nursing Home Bond?
Surety companies will run a credit check on the owners of the nursing home to determine eligibility and pricing for the West Virginia Nursing Home 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 West Virginia Nursing Home Bond Cost?
The West Virginia Nursing Home 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 Home Bond Cost
| Credit Score | Bond Cost (1 year) |
|---|---|
| 720+ | $150 |
| 625 – 719 | $200 |
| 600 – 624 | $500 |
| 575 – 599 | $600 |
| 550 – 574 | $1,000 |
| 500 – 549 | $1,400 |
Who is Required to Purchase the Bond?
West Virginia requires all nursing homes that manage resident funds to purchase a surety bond or commercial insurance as a prerequisite to obtaining a business license. To paraphrase West Virginia statute 16-5C-2, a nursing home is a facility that provides 24-hour nursing care to four or more residents in need of extensive and ongoing care.
How do West Virginia Nursing Homes Apply for Licensure?
Nursing homes in West Virginia must navigate several steps to secure a business license. Below are the general guidelines, but applicants should refer to the licensing statutes for details on the process.
License Period – All West Virginia Nursing Home Licenses may be issued for a period not to exceed 15 months and must be renewed before the expiration date
Step 1 – Obtain a Certificate of Need
West Virginia requires nursing homes that are newly constructed or expanding their services to obtain a Certificate of Need (CON). Nursing homes will be ineligible for licensure until their facility has been issued a CON. To apply for a CON, nursing homes must:
1.a File a letter of intent 10 days before submitting a CON application. The letter of intent must specify the nature, scope, cost, timing, location, and name of the facility. All letters of intent should be mailed to the following address:
Director, Certificate of Need
West Virginia Health Care Authority
100 Dee Drive
Charleston, West Virginia 25311
2.a Within 10 days of filing a letter of intent, submit a completed CON application to the following address:
Director, Certificate of Need
West Virginia Health Care Authority
100 Dee Drive
Charleston, West Virginia 25311
Applications must include all items referenced in the CON Application Checklist. Nursing homes must pay the appropriate filing fees when submitting their application.
Step 2 – Purchase a Surety Bond or Commercial Insurance
Nursing homes that manage resident funds must purchase and maintain either a surety bond or commercial insurance in an amount that is equal to 1.25 times the average amount of funds managed by the nursing home in the previous fiscal year. First-time license applicants must estimate this amount for the upcoming fiscal year.
Step 3 – Complete the Application
All West Virginia nursing home license applications should be mailed to the following address:
Office of Health Facility Licensure and Certification
Capitol and Washington Streets, 1 Davis Square, Suite 101
Charleston, WV 25301-1799
Nursing homes must complete the application in its entirety, and submit the following items:
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- Lease or assignment agreement (if applicable)
- Company organizational plan
- Evidence of compliance with all applicable zoning, building, safety, fire prevention, and sanitation laws
- Evidence of approval (CON) by the Health Care Cost Review Authority
Nursing homes must pay a $200 fee when submitting their license application.
Additionally, nursing homes seeking to receive Medicaid reimbursements can apply for a provider enrollment here.
How do West Virginia Nursing Homes Renew Their Licenses?
Nursing homes should mail their completed renewal applications to the following address:
Office of Health Facility Licensure and Certification
408 Leon Sullivan Way
Charleston, WV 25301-1799
All West Virginia Nursing Home Licenses may be issued for a period not to exceed 15 months and must be renewed before the expiration date.
What are the Insurance Requirements for Nursing Homes in West Virginia?
Nursing homes that manage resident funds must purchase and maintain either a surety bond or commercial insurance in an amount that is equal to 1.25 times the average amount of funds managed by the nursing home in the previous fiscal year. First-time license applicants must estimate this amount for the upcoming fiscal year.
How Do West Virginia Nursing Homes File Their Bond?
Nursing homes should mail their completed bond form, including the power of attorney, to the following address:
Office of Health Facility Licensure and Certification
408 Leon Sullivan Way
Charleston, WV 25301-1799
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 and address of entity/individual(s) buying the bond
- Surety company’s name and address
- Bond amount
- Date the bond goes into effect
- Date the bond is signed
What Can West Virginia Nursing Homes Do to Avoid Claims Against Their Bonds?
To avoid claims on their bonds, nursing homes in West Virginia must ensure that they:
- Hold all resident funds in a designated trust account
- Administer all resident funds in a lawful manner
- Accurately report on all resident funds
- Refund all resident funds upon the termination of a deposit
What Other Insurance Products Can Agents Offer Nursing Homes in West Virginia?
West Virginia requires nursing homes to purchase either commercial liability insurance or a surety bond. 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 West Virginia Nursing Home Customers?
West Virginia conveniently provides a public database to search for active nursing homes 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.