Can a Texas home care agency skip workers' comp?

Legally, yes — Texas is a non-subscriber state. Practically, most agencies purchase either statutory work comp or a non-subscriber occupational-accident + stop-gap program to protect against negligence lawsuits from injured caregivers.

What's the minimum GL for an HHSC-licensed agency?

HHSC license minimums vary by license type (often $300K–$500K), but Medicaid and hospital contracts push the practical floor to $1M/$2M. We recommend $1M/$2M as the starting point for any Texas home care agency.

Are 1099 caregivers allowed in Texas?

Texas does not have a state ABC test, but the IRS and DOL still scrutinize caregiver classification. Most home care aides fail the 20-factor test and should be W-2. Misclassified 1099 caregivers create insurance and audit exposure.

Texas Requirements

Texas Home Care Agency Insurance Requirements

Texas home care agency insurance requirements are shaped by HHSC (Health and Human Services Commission) licensing and Texas's unique status as the only U.S. state where private employers may opt out of workers' compensation. Here's exactly what HCSSA, PAS, licensed home health, and hospice programs need to carry in 2026 — and how to weigh the non-subscriber tradeoff.

✓HHSC license minimums start at $300K–$500K GL
✓Non-subscriber work comp is legal — but risky without a stop-gap program
✓$1M/$2M GL is the practical floor for Medicaid & hospital contracts
✓Professional liability required for skilled HHA & hospice

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HHSC license minimums by provider type

HHSC licenses several distinct provider types — Home & Community Support Services Agencies (HCSSA), Personal Assistance Services (PAS), Licensed Home Health, and Hospice — each with its own coverage floor. License minimums typically start around $300K–$500K GL, but virtually every Medicaid MCO and hospital referral contract pushes the practical floor to $1M/$2M.

Texas workers' compensation — subscriber vs non-subscriber

Texas is the only state where private employers may opt out of workers' compensation. Non-subscribing agencies save on premium but lose statutory tort immunity — employees can sue for negligence, and the employer forfeits common-law defenses like contributory negligence and the fellow-servant rule. Most non-subscribers offset this with an occupational-accident policy plus a stop-gap employer liability policy. KTL runs the subscriber vs non-subscriber comparison at every renewal.

General & professional liability minimums

HHSC does not mandate $1M GL, but Texas Medicaid STAR+PLUS, STAR Kids, and hospital referral contracts (Baylor Scott & White, Houston Methodist, Memorial Hermann, HCA) almost universally require $1M/$2M GL, $1M professional liability, primary & non-contributory additional insured status, and a waiver of subrogation. Larger health-system contracts can push $2M/$4M plus umbrella limits.

Non-owned & hired auto

Texas caregivers routinely drive personal vehicles between clients. Personal auto policies exclude business use, so an accident on the way to a shift can flow straight to the agency without non-owned & hired auto coverage.

Sexual abuse & molestation coverage

Texas hospital systems and Medicaid MCOs increasingly require a dedicated abuse & molestation limit — often sub-limited or excluded on standard professional liability forms. KTL confirms whether abuse is embedded or needs a standalone endorsement on every Texas placement.

Caregiver classification

Texas does not have an AB 5-style test, but the IRS 20-factor test and DOL enforcement still make 1099 caregivers risky. Misclassification triggers back workers' comp premium (or non-subscriber losses), wage claims, and license risk. Plan for W-2 classification when budgeting your Texas insurance program.

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Frequently asked questions

General liability, professional liability, non-owned auto, and either subscribed workers' comp or a non-subscriber occupational-accident program with stop-gap employer liability. Medicaid MCO and hospital contracts almost always add cyber, abuse & molestation, and umbrella limits.