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Doctors making house calls may be a thing of the past, but providing healthcare services outside of medical offices and hospitals have grown exponentially over the past few decades. As a result, home healthcare has become an essential business, offering valuable outpatient services to the elderly and as a viable treatment for many other health conditions.
However, one issue that home healthcare companies now face is how they reimburse their aides who use their personal car for work. These workers spend much of their time in the field traveling from one patient’s home to another, and can easily be rack up hundreds of miles per week on their own vehicle.
Unfortunately, many home healthcare companies reimburse their employees below the IRS Standard Mileage Rate. This is why business mileage reimbursement for home health workers has become an important topic that needs to be addressed.
Problems may arise if a home healthcare agency doesn’t compensate their employees appropriately for business miles they drive using their own car. As the Tax Cuts and Jobs Act removed mileage as a tax deduction, employees can no longer use those miles as a tax write off, if those expenses exceed more than 2 percent of their adjusted gross income.
Therefore, if your company is not reimbursing their home caregivers adequately, it may be at risk of violating labor laws. Not to mention, it’s also a benefit that helps retain employees and attract new talent to work for your agency.
Therefore, it’s a good business practice and can save your company money in the long run to offer a mileage reimbursement policy that is relative to the vehicle operation and fuel costs in the area which your company operates, or by using the IRS Standard Mileage Rate.
As with any type of business, time and money go hand in hand. The IRS has specific guidelines on keeping accurate records of business mileage. But luckily, companies no longer need to depend on their employees to keep manual mileage logs.
A trip platform, such as Everlance Business, automatically records the miles your home care aids drive each time they get in their car to travel to a patient’s home. The app can also be used to capture and store receipts for other vehicle expenses such as parking and tolls.
Keeping IRS compliant records guarantees the accuracy for your business accounting and reporting these expenses to the IRS. That saves the company and its employees valuable time. It also makes sure that your agency is not over- or under-reimbursing your healthcare workers for these expenses, which saves the company money, and provides assurance to your staff that they’re being compensated appropriately.
Having your home care staff use an automated mileage and expense tracking app provides valuable insight that can help improve your business. From their routes driven to daily routines, you can see how much time each mobile worker is spending in their car versus caring for patients, and make changes accordingly that can significantly improve the productivity of your aids and the profitability of your healthcare business.
As advancements in health care are continually evolving, so should the way home healthcare companies run their business. Mileage reimbursement is undoubtedly a healthy business practice and one that healthcare agencies should consider implementing with care.
We help people save time and money. At Everlance, we're on a mission to empower mobile workers and businesses. That sometimes leads us to generalize tax information. Everlance team members are not certified tax professionals. If you need help with your specific tax situation, please reach out to your tax advisor.
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