New Jersey Nursing Home Bond: A Comprehensive Guide
At a Glance:
- Average Cost: $100 or 1% of the bond amount per year, whichever is greater
- Bond Amount: Greater than or equal to all resident funds held by the facility at any given time
- Who Needs it: All New Jersey nursing homes that hold residents’ personal funds
- Purpose: To ensure that residents will receive compensation for financial harm if the nursing home mishandles their funds
- Who Regulates Nursing Homes in New Jersey: The New Jersey Department of Health (DOH)
Background
New Jersey statute 8:39-2-2 requires all nursing homes operating in the state to obtain a license with the Department of Health. The New Jersey 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 hold residents’ personal 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 patient 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 New Jersey Nursing Home Bond?
New Jersey requires nursing homes that hold resident funds to purchase a surety bond as part of the application process to obtain a business license. The bond ensures that residents will receive compensation for financial harm if the nursing home fails to abide by the regulations set forth in New Jersey statute 8:39-9.5. Specifically, the bond protects residents if the nursing home wrongfully deprives them of funds held by the facility. 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 New Jersey Nursing Home Surety Bond?
BondExchange makes obtaining a New Jersey Nursing Home bond easy. Simply log in to your account and use our keyword search to find the “nursing home” 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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How is the Bond Amount Determined?
New Jersey statute 8:39-9.5 requires that the bond be in an amount large enough to ensure that all resident funds are covered. Nursing homes must ensure that the bond amount is greater than or equal to all resident funds held at any given time.
Is a Credit Check Required for the New Jersey Nursing Home Bond?
No, surety companies do not require a credit check for the New Jersey Nursing Home Bond. Because the bond is considered relatively low risk. The same low rate is offered to all applicants regardless of their credit history.
How Much Does the New Jersey Nursing Home Bond Cost?
The New Jersey Nursing Home bond costs either 1% of the bond amount or $100, whichever is greater.
Who is Required to Purchase the Bond?
New Jersey requires all long-term care facilities (nursing homes) that hold residents’ personal funds to purchase a surety bond. To paraphrase New Jersey statute 8:85-1.2, a nursing home is an institution that provides 24-hour nursing care to residents of the facility.
How Do Nursing Homes Apply for a License in New Jersey?
Nursing homes in New Jersey must navigate several steps to secure their license. Below are the general guidelines, but applicants should refer to the application form for details on the process.
License Period – All New Jersey Long-Term Care Facility Licenses expire annually and must be renewed before the expiration date
Step 1 – Purchase a Surety Bond
Nursing homes that hold residents’ funds must purchase and maintain a surety bond
Step 2 – Obtain a Certificate of Need
New Jersey requires license applicants seeking to construct, relocate, or renovate a nursing home to obtain a Certificate of Need (CON) prior to applying for licensure. The CON requirements were implemented to ensure that the supply of nursing home beds correlates with demand. To obtain a CON, nursing homes must mail a completed application to:
New Jersey Department of Health
Office of Certificate of Need and Healthcare Facility Licensure
P. O. Box 358
Trenton, NJ 08625-0358
The application process is extensive, and nursing homes must submit all required documents that correlate with their facility’s type. Nursing homes are required to pay a $7,500 filing fee if constructions costs are $1 million or less and $7,500 + 0.25% of the total project cost for projects costing over $1 million.
Step 3 – Apply for Licensure
After the nursing home’s CON application has been approved, they may then apply for a business license. New Jersey has separate licensure requirements based on the county the facility is located in. To obtain the licensing standards for their county, nursing homes should call the following number:
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- 609-292-6552 for facilities located in Bergen, Hudson, Mercer, Morris, Passaic, Somerset, Sussex and Warren Counties
- 609-633-9042 for facilities located in Burlington, Gloucester, Hunterdon, Middlesex, Monmouth and Ocean Counties
- 609-292-7228 for facilities located in Atlantic, Camden, Cape May, Cumberland, Essex, Salem and Union Counties
Once the nursing home has obtained the licensing standards, they must then must attend an office conference with the Long-Term Care Licensing and Certification Program to review the conditions of the facility’s licensure. After the conference, nursing homes should mail their completed application to the following address:
New Jersey Department of Health
Office of Certificate of Need and Healthcare Facility Licensure
P. O. Box 358
Trenton, NJ 08625-0358
Nursing homes must complete the application in its entirety, and submit the following items:
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- Certificate of Occupancy
- Written approvals from the Health Care Plan Review Unit of the New Jersey Department of Community Affairs as well as the facility’s local health authority
- Written approvals from local officials of the facility’s water supply or sewage disposal system (if applicable)
- Surveys from DOH representatives indicating the facility complies with all licensing requirements
Nursing homes must pay a $1,500 fee, plus an additional $15 per licensed bed, when submitting their license application.
Step 4 – Enroll as a Medicaid Provider
Most nursing homes receive reimbursements from Medicaid for services provided to enrolled individuals. However, before the nursing home can receive these payments they must first enroll as a Medicaid provider. To enroll as a provider, nursing homes must mail their completed application to the following address:
Provider Enrollment
Gainwell Technologies
P.O. Box 4804 Trenton, NJ 08650
However, nursing homes enrolling as institutional providers must mail their application, including a $631 fee, to the following address:
Division of Revenue
Lockbox 656
200 Woolverton Ave. Bldg.
20 Trenton, NJ 08646
Attention: Processing Bureau
How Do New Jersey Nursing Homes Renew Their License?
Prior to the expiration date, the DOH will send the nursing home a renewal application to be completed and returned. All New Jersey Long-Term Care Facility Licenses expire annually and must be renewed before the expiration date.
What are the Insurance Requirements for Nursing Homes in New Jersey?
New Jersey does not require nursing homes to obtain any form of liability insurance as a prerequisite to obtaining a business license. Nursing homes that hold residents’ 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.
Do New Jersey Nursing Homes Need to File Their Bond?
The obligee on the New Jersey Nursing Home bond is the residents of the facility. Therefore, nursing homes may not be required to file their bond with any government agency. However, nursing homes will most likely need to present the DOH with proof that they have purchased the bond.
What Can New Jersey Long Term Care Facilities Do to Avoid Claims Against Their Bond?
To avoid claims made against their bond, nursing homes in New Jersey must ensure that they do not wrongfully withhold residents of their funds.
What Other Insurance Products Can Agents Offer Nursing Homes in New Jersey?
New Jersey does not require nursing homes 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 New Jersey Nursing Home Customers?
New Jersey 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.
