Yes, a CNA can start their own business, and many do. The constraint that shapes everything else is scope of practice: your certification covers custodial, non-medical care, so a business built on those services is yours to own and run, while any business offering skilled nursing services requires you to bring in licensed clinicians to supervise that side. Within that boundary, the demand is real and the setup is manageable.
Business Models Open to a CNA
Four models fit the certification you already hold. Each has a different ceiling, a different startup cost, and a different relationship to scope of practice.
A non-medical home care agency is the most direct fit. The services — companion care, help with bathing and dressing, meal preparation, light housekeeping, transportation to appointments — sit entirely within what a CNA is trained and permitted to provide. No clinical supervisor is required on staff, startup costs stay lower than agencies offering skilled services, and demand from an aging population is steady.
A home health agency offering skilled services — wound care, catheter management, medication administration by injection — is a different animal. Federal rules require a clinical manager who is a registered nurse with at least three years of nursing experience, including one year in home health, and an administrator who is a licensed physician, RN, or holds an undergraduate degree with supervisory experience in health care.1eCFR. 42 CFR Part 484 – Home Health Services You can own this business as a CNA. You cannot be its clinical manager.
A healthcare staffing agency avoids the scope question by putting you on the administrative side. You recruit nurses, aides, and therapists, place them in facilities that need contract workers, and handle contracts and payroll. You aren’t delivering care yourself. Startup costs are higher because payroll infrastructure and staffing-specific insurance aren’t cheap, but revenue scales with each placement.
Independent contracting for private-duty care is the fastest launch. You contract directly with clients or families and provide personal care in the home under 1099 tax treatment. You handle your own taxes and benefits, and legal liability sits on you rather than an employer, so your own insurance is non-negotiable.
The Custodial and Skilled Line
This is where CNA business owners most often get in trouble. Federal guidelines define custodial care as non-medical assistance a non-licensed caregiver can safely provide — bathing, dressing, eating, cooking, laundry. Skilled care is medically necessary treatment that only licensed professionals can deliver or supervise, including physical therapy, wound care, intravenous injections, and catheter care.2Centers for Medicare & Medicaid Services. Custodial Care vs Skilled Care
Your business stays on the custodial side unless you hire licensed professionals to supervise the skilled side. Crossing the line without proper oversight is not a paperwork issue. State boards of nursing can revoke your CNA certification, and working outside your scope can expose you to negligence claims your insurance may refuse to cover. When a client asks for something that feels medical, it probably is, and the right response is a referral to a licensed provider.
Keeping Your CNA Certification Active
Your certification is the foundation of the business. If you go 24 consecutive months without performing nursing or nursing-related services for pay, you lose it and have to complete a full new training and competency evaluation program to get it back. Running your care business counts as performing those services. Shifting entirely into an administrative or staffing role and stopping direct care starts the clock. Most states also require continuing education hours for renewal, so check your state’s nurse aide registry for the specific deadlines that apply to you.
Forming the Business Entity
Before you take on a client, set up a legal entity that separates your personal assets from business liabilities. A Limited Liability Company is the common choice for small healthcare businesses: liability protection without the formality of a corporation. An S-Corporation election can trim self-employment taxes once profits reach a certain level, but it adds paperwork and payroll requirements that usually don’t pay off at launch.
You form an LLC by filing articles of organization with your state’s Secretary of State. The filing asks for the business name, physical address, the organizers’ names, and a registered agent — someone with a physical address in the state who accepts legal documents for you. Most states offer online filing, with fees generally running from $50 to $500.
Then apply for an Employer Identification Number through the IRS using Form SS-4. An EIN is a nine-digit number the IRS assigns for tax filing and reporting.3Internal Revenue Service. About Form SS-4, Application for Employer Identification Number (EIN) You need it to open a business bank account, file taxes, and hire employees. The application asks for the legal name of the entity, the Social Security number of the responsible party, and the type of entity.4Internal Revenue Service. Instructions for Form SS-4 Applying online is fastest; you receive the EIN immediately.
State Licensing and Background Checks
If you’re running an agency rather than working solo as an independent contractor, most states require a license from the state health department. The name varies — Home Care Organization license, Home Health Agency permit, Non-Medical Home Health Services license — but the pattern is similar. You submit information about your business structure, ownership, and financial stability, along with an application fee and typically a surety bond. Bond amounts range widely, often from $10,000 to $50,000 or more depending on the services you offer.
Background checks are universal. The Affordable Care Act established a framework for nationwide background checks on prospective direct patient access employees of long-term care facilities and providers, including home health agencies and personal care providers.5Centers for Medicare & Medicaid Services. CMS National Background Check Program Expect fingerprinting for owners and every hire.
You’ll also need a policy and procedure manual covering patient records, emergency situations, infection control, and complaint resolution. Regulators review this manual during the application process and again during inspections after you’re licensed. Plan for 30 to 90 days from application to approval, and expect a site visit or records inspection before the license issues.
Medicare, Medicaid, and Electronic Visit Verification
Accepting Medicare or Medicaid means a separate federal certification on top of your state license. CMS sets health and safety standards that providers must meet as conditions of participation, and state survey agencies conduct the inspections.6Centers for Medicare & Medicaid Services. Quality, Safety and Oversight – Certification and Compliance An agency cannot participate in Medicare unless it meets every condition of participation or achieves substantial compliance. The survey process can take months.
If you provide Medicaid-funded personal care, you’re also subject to Electronic Visit Verification under the 21st Century Cures Act. EVV systems electronically capture the type of service, the individual receiving it, the date, the location, the worker, and the start and end times of each visit.7Medicaid.gov. EVV Requirements in the 21st Century Cures Act States that fail to implement EVV lose a percentage point of their federal Medicaid match, so your state almost certainly has a platform, and often offers it free. Learning it and folding it into your workflow still takes real time.
Insurance You Actually Need
Two policies at minimum, and they cover different things. Professional liability insurance, sometimes called malpractice insurance, responds to claims that you provided negligent or substandard care — if a client develops pressure sores because you failed to reposition them, this is the policy that answers. General liability covers accidents unrelated to professional services, like a client tripping over your equipment bag.
Most states require home care agencies to carry professional liability of at least $1 million per occurrence, though requirements vary. Hire an employee and you also need workers’ compensation in nearly every state, effective as soon as one person is on payroll. Cost depends on your services, location, and claims history. Build it into your budget from day one.
HIPAA — Only If You Bill Electronically
Whether HIPAA applies to your business turns on a single question: do you transmit health information electronically in connection with a standard transaction, such as billing a health plan? If yes, you are a covered entity and HIPAA’s privacy and security rules apply in full.8HHS.gov. Covered Entities and Business Associates Private pay only, no electronic claims, and you may not technically be covered — though following HIPAA anyway is smart practice and often required by state law.
As a covered entity, you develop written privacy policies, designate a privacy official (which can be you), and train every member of your workforce on those policies. Workforce means employees, volunteers, and anyone else whose work you direct.9HHS.gov. Summary of the HIPAA Privacy Rule Reasonable safeguards mean the practical ones: shredding documents that contain health information, locking paper records, limiting access to electronic files. Retain privacy documentation for at least six years.
Vendors who handle patient information for you — a billing service, a cloud storage provider, an IT consultant — each need a Business Associate Agreement. The BAA obligates the vendor to safeguard patient data and spells out what they can and cannot do with it.10HHS.gov. Business Associates Vendors whose work doesn’t touch patient information, like a janitorial service, don’t need one.
Self-Employment Taxes
The move from employee to owner rewrites your tax picture. As a W-2 employee, your employer paid half of your Social Security and Medicare taxes. Self-employed, you pay both halves, a combined 15.3% split into 12.4% for Social Security and 2.9% for Medicare.11Internal Revenue Service. Self-Employment Tax (Social Security and Medicare Taxes)
Nobody withholds tax from your pay, so you’ll usually need to make quarterly estimated payments. If you expect to owe at least $1,000 for the year after any withholding and refundable credits, quarterly estimates on Form 1040-ES are required.12Internal Revenue Service. 2026 Form 1040-ES Missed payments trigger penalties, and new owners consistently underestimate what they owe.
The offset is deductions. You can deduct the employer-equivalent half of your self-employment tax from adjusted gross income.11Internal Revenue Service. Self-Employment Tax (Social Security and Medicare Taxes) Common deductions for home care owners include mileage to clients’ homes, medical supplies, professional liability premiums, continuing education, phone and internet, and a home office deduction if you use part of your home exclusively for business.13Internal Revenue Service. Credits and Deductions for Businesses Keep receipts and mileage logs from day one. The IRS expects documentation for every deduction.
NPI, If You Bill Insurers
Billing health plans electronically means you need a National Provider Identifier, a 10-digit number assigned through the National Plan and Provider Enumeration System.14Centers for Medicare & Medicaid Services. Guidance on National Provider Identifier (NPI) Enumeration You apply as an individual (Type 1) if you personally render care, or as an organization (Type 2) for the business entity. The application asks for practice location, at least one taxonomy code, license number and state of licensure, and contact information.15NPPES. Apply for an NPI
Private-pay only, with no electronic claims, and you may not need one. Planning to accept Medicare, Medicaid, or any private insurance, and you should get this done early in the process, because some payers won’t credential you without it.
Mandated Reporting
Every state except New York requires certain professionals to report suspected elder abuse, neglect, or exploitation, and a CNA providing direct care is almost certainly a mandated reporter. Fifteen states go further and require universal reporting from everyone. State laws set who you report to (usually adult protective services or a designated state agency), how quickly, and the penalties for failing. Learn your state’s specific rules before your first client. Reporting in good faith protects you from liability. Failing to report when required can bring criminal charges.
A Realistic Timeline
From idea to open doors, expect two to four months. The order below avoids backtracking:
- File articles of organization with the Secretary of State and get your EIN from the IRS. A few days to a few weeks depending on the state.
- Bind professional liability and general liability coverage. Add workers’ comp if hiring. Insurers can usually issue policies within a week.
- Apply for the state healthcare license: application, policy and procedure manual, background check documentation, surety bond, and fee. Processing runs 30 to 90 days, with a possible site inspection.
- Handle local permits. Many cities and counties want a separate business license or occupational permit. Usually quick and inexpensive.
- Apply for an NPI and begin payer credentialing if you’ll accept insurance. Medicare certification is a separate federal survey.
- Enroll in your state’s EVV system before delivering any Medicaid-funded personal care.
Once you’re approved, staying approved is its own job. Most states require annual reports with the Secretary of State, periodic license renewals with the health department, and updated background checks for new hires. Put every renewal on your calendar the day the approval lands. Losing a license because a renewal slipped is entirely avoidable, and it will shut the business down as quickly as any other regulatory failure.