How to start a home care agency in California

Updated October 22, 2026 · CensusDesk research

California at a glance

Fees and forms change. Check the CDSS Home Care Services “Application Fees” page and the latest HCS 281 instructions before you pay anything.

Step 1. Decide what kind of agency you are

A California Home Care Organization arranges non-medical care: help with bathing, dressing, toileting, meals, light housekeeping, errands, companionship, and reminders to take medication. HCOs and their aides can’t provide medical services. If you plan to offer skilled nursing or therapy, you’re a home health agency instead, licensed by a different state department. This guide covers the non-medical path.

Decide one more thing early: private pay, public programs, or both. Private-pay families pay you directly. Public programs have their own enrollment and rules, separate from your license. Many owners start private pay because the money comes in faster and the paperwork is lighter.

Step 2. Form your business

Any adult, partnership, corporation, or other business can apply for an HCO license. If you form a corporation or LLC, CDSS asks for your formation papers (such as articles of incorporation and bylaws, or your operating agreement) and a board resolution that authorizes the application. Get a federal EIN from the IRS and open a business bank account before you apply.

Step 3. Get your insurance and bond

California law requires every HCO to carry three things:

1. General and professional liability insurance of at least $1,000,000 per occurrence and $3,000,000 in the aggregate.
2. A workers’ compensation policy that covers your home care aides.
3. An employee dishonesty bond, including third-party coverage, of at least $10,000 (CDSS form HCS 402).

Talk to an insurance agent now. You’ll need proof of all three in your packet.

Step 4. Mail your application packet

CDSS’s own instructions (form HCS 281) for an HCO license:

1. Read the HCS 281 instructions.
2. Download the current Section A forms from the CDSS site, starting with the HCS 200 application.
3. Fill them out completely and gather the Section B supporting documents.
4. Pay the fee by check or money order made out to the California Department of Social Services.
5. Mail the fee and every Section A and B document together, as one packet, to the Home Care Services Branch in Sacramento.

After you mail the packet, you attend a CDSS orientation ($50, non-refundable), and every owner with a 10% or greater stake completes a Live Scan background check before the license is issued. CDSS doesn’t publish a fixed timeline. Complete is the fastest path.

Step 5. Hire registered aides

Every caregiver you send to a client must be on California’s Home Care Aide Registry. That means a background check, a tuberculosis clearance, and training. Under the Health and Safety Code, an aide finishes at least five hours of entry-level training before working with a client, then at least five hours of training every year. Those are the 2026 rules: a new version of that section (SB 412) takes effect January 1, 2027, so check CDSS for the current hours. Aides register through CDSS’s Guardian system, and registration costs $35.

What it costs to get licensed

Getting your first clients

A license doesn’t bring families to you. Here’s what the research says about where clients come from, and what that means for a new California agency.

• Referrals lead. Current and past clients are the top referral source for private duty home care, followed by discharge planners, home health, hospice, and rehab. A new agency has no past clients yet, so the referral engine starts slow.
• Families search first. Most families looking for senior care start with a generic search like “home care near me,” and few search an agency by name. If your agency has no website, those families find someone else.
• Directories charge per lead. Lead directories and paid search often run $50 to $150 per lead, and the family may be shopping three agencies at once.
• Speed wins. On average about a third of home care inquiries become clients. A family coming home from the hospital may have only a day or two to decide.

What one client is worth in California

That’s why the first thing a new agency needs after its license is a front door that works when you can’t pick up the phone: a real website, a way for families to get answers at night, and every inquiry in your inbox the minute it happens.

Sources

• CDSS Home Care Services, “Application Fees” (HCO license fee and term, branch phone and email), read October 22, 2026
• CDSS Home Care Services, “Home Care Organization Application Process” (Section A and B forms, mail only), read October 22, 2026
• CDSS form HCS 281, “Application Instructions for a Home Care Organization License” (packet, payment, signatures, mailing), found October 22, 2026
• CDSS, “Fact Sheet: Licensed Versus Unlicensed Home Care Services” and “Fact Sheet: Home Care Services” (license before services, aide registry, non-medical scope), found October 22, 2026
• CDSS Home Care Services, “Home Care Aide Application Process” (Guardian, $35 registration), read October 22, 2026
• CDSS, “Home Care Organization License Application Steps” (the $50 orientation, Live Scan for owners), read October 22, 2026
• California Health and Safety Code section 1796.42 (insurance, workers’ comp, dishonesty bond) and section 1796.44 (aide training, 2026 version), via California Legislative Information, read October 22, 2026
• CareScout Cost of Care Survey 2025, median hourly cost of non-medical in-home care by state
• HCAOA Private Duty Benchmarking, via Activated Insights (referral sources)
• Caring.com search behavior figures, via CoreCubed (generic search)
• Home Care Pulse, via Home Health Care News (inquiry conversion benchmarks)
• Sagapixel (directory and paid search cost per lead estimates)