The Ohio Adult Care Facilities Association (OACFA) welcomes you to look into the process of becoming an Operator of a Residential Class 2 or 3 Facility (Adult Care Facility). There are many steps to take to ensure that you are on the right track. One of those would be getting registered for the next upcoming New Provider Training, a free training that is hosted by the Ohio Department of Mental Health & Addiction Services (OhioMHAS), whom is the entity that licenses these facilities.
The primary purpose of this training is to introduce you to the “Starting Your Residential Facility Class 2 Toolkit” and to aid you in getting started in the licensure process to become a good Residential Facility Class 2 (ACF). This training should provide you the necessary skills to help you on the path of becoming a licensed home. Starting your own and operating a Residential Facility Class 2 takes time, lots of preparation, and a commitment to serving the unique needs of your residents.
This training will help prepare you for what lies ahead. Getting licensed to operate a Residential Facility Class 2 means that you want to be a business owner. You will learn what is involved in starting, owning, and operating this type of business. This training will go over the basic information and best practices about operating a Residential Facilities Class 2: Business Plan Development; Getting Your Home Licensed; Business Startup; How to Organize Your Business; Staffing Your Business; Paying Your Staff; Business Finances; Marketing; Forms; and Getting Residents.
Frequently Asked Questions (FAQ’s) for Aspiring Residential Class 2 Providers/Operators
Welcome! So, you want to become an owner of a Residential Facility Class 2 in the State of Ohio. The Ohio Adult Care Facilities Association (OACFA) and the Ohio Department of Mental Health and Addiction Services (OhioMHAS) is a great place to get started with the process of becoming a Residential Facility Class 2, or an ‘Adult Care Facility’. The primary purpose of this FAQ’s page is to aid you in becoming a good business owner and to get you started in the licensure process.
Residential Facility Class 2s in Ohio range from one to 16 beds. Owning and operating a Residential Facility Class 2 takes time, lots of preparation, and a commitment to serving the unique needs of your residents. If the primary goal is anything other than to help vulnerable people, then owning, operating, and running a Residential Facility Class 2 probably isn’t for you.
The job requires hard work, long hours, and significant expenses. So, you need to be able to find your reward in the good you’re doing for others. While it is impossible to list all the operational and legal requirements for any business, this template serves as a guide for business owners launching their venture. Business research should be thorough and ongoing to keep up with regulatory changes as they occur.
What is a Residential Facility Class 2?
Residential Facility Class 2’s are residential care facilities licensed by OhioMHAS for the purpose of providing accommodations, supervision, and personal care services to unrelated adults. Residents of these facilities typically require a 24-hour level of support and assistance with daily living skills. The residents of these homes are individuals who, without this level of support, would be homeless, inappropriately residing in nursing homes, have extended hospital stays or would be incarcerated. Facilities receive a two-year license to operate after complying with the statutory requirements prescribed in the Ohio Revised Code and the rules set forth in the Ohio Administrative Code. Homes must have a license prior to accepting residents.
Operators must undergo a comprehensive onsite inspection of the home during which OhioMHAS surveyors verify the safe and sanitary condition of the facility, the capability of the operator and staff to meet their responsibilities in providing supervision and personal care services and the appropriateness of the placement of each resident in the RF2 setting. For examples of Tool Kits for survey periods and other exemplary documentation, please visit here: https://mha.ohio.gov/supporting-providers/licensure-and-certification/types-of-licenses-and-certifications/residential-facility-class2-sitearea/residential-facility-class2-landingpage
You must understand and follow the Ohio laws for owning and operating an RF2 so that you can be sure you are providing your new residents with the care, support and supervision required by law. You can find an exhaustive list of the Ohio Administrative Code here: https://codes.ohio.gov/ohio-administrative-code/chapter-5122-30
If I want to start a Residential Facility Class 2, will I work for the Ohio Department of Mental Health and Addiction Services or is this my own business?
Residential Class 2 and other class facilities are licensed through the Ohio Department of Mental Health & Addiction Services (OhioMHAS). Starting your own facility, though licensed by OhioMHAS, is your OWN business. You should treat this as a small business. We encourage those new Operators entering the ACF industry to get registered for the next upcoming New Provider Training. This training session will go over everything in terms of business structure, certification process and much more! It is completely free to attend, and you will receive a certificate for your attendance, as well as leave with more information on how to start your own Residential Class 2 Facility. You can click here to get registered: https://mha.ohio.gov/about-us/media-center/events/residential-facility-class-ii-new-provider-training
How Do I Obtain an EIN?
The EIN is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to small businesses operating in the United States for the purpose of identification. When obtaining an EIN, you will need to have decided on a type of legal structure.
Most businesses need an EIN. An employer needs an EIN if it has employees, operates a partnership or corporation and/or withholds wages on income. Contact the IRS to obtain an EIN. You can visit the IRS website at https://www.irs.gov/businesses/smallbusinesses-self-employed/apply-for-an-employer-identification-number-ein-online to apply for an EIN.
The IRS uses the EIN to identify taxpayers who are required to file various business tax returns. Banking institutions might require an EIN for you to open a business bank account even if you do not have employees.
Applying for an EIN number online is the easiest method for many business owners. The application for an EIN is free. The online application process is available for all entities whose principal business, office or agency or legal residence (in the case of an individual) are in the United States or U.S. Territories. The principal officer, general partner, grantor, owner, trustee etc., must have a valid Taxpayer Identification Number (Social Security Number, EIN, or Individual Taxpayer Identification Number) to use the online application.
What are some things that I can do to help determine if and how I will start a RF2?
1. Read ALL sections 1-32 of the Ohio Administrative Code 5122-30. The Ohio Administrative Code provides the rules for opening and operating a RF2. https://codes.ohio.gov/ohio-administrative-code/chapter-5122-30
While reading the rules determine any cost that may come from that rule. Upon reading the rules put together several budgets to gain a better understanding of the financial aspects of this business.
Start-up budget taking into consideration the following:
Property acquisition cost, furnishing the home for the appropriate number of residents, linens, refrigerators, any repairs needed to make the home safe and livable, staff startup cost, food cost, utilities, fire safety requirements, fees, etc.
Monthly operational budget taking into consideration the following revenue, fixed and variable cost:
• Number of potential residents and the revenue that may be acquired monthly.
• Food cost
• Home/property maintenance
• Staff cost
• Cleaning supplies/cleaning services
• Monthly housing cost (rent or mortgage) and property taxes if applicable
• Contingency cost to replace or fix any required items.
Annual capital improvement budget for at least 5 years taking into consideration the following and the associated cost:
– Maintaining major systems in the home such as HAVC, plumbing, electrical
• The lifespan of the roof
• The condition of windows and doors
• Wear and tear in common areas and replacing or upgrading spaces such as the bathroom and kitchen.
• Wear and tear on flooring and walls
• Maintaining sidewalks and steps
• Exterior paint or siding repairs
2. Do a self-assessment to explore your knowledge of working with individuals living with a mental illness and how to care for them. From this self-assessment begin taking trainings to help you learn more.
How Do I Get My Home/Facility Licensed?
After you have obtained your building and zoning certificates, you should apply for your Residential Facility Class 2 license. Prior to opening an RF2, you must complete the licensing process through OhioMHAS. Basically, a business license is a document from the government that gives you authorization to start a business. For RF2s, your OhioMHAS license is your business license. When applying for your Residential Facility Class 2 license, you must complete a separate application for each home that you will operate as this type of business. The licensing process involves the following steps:
• Submit a complete initial application for licensure, including the application fee. The application fee is $75 for all Class 2 facilities. You must submit a fully complete application with payment included or your application will not be reviewed.
• The OhioMHAS Bureau of Licensure and Certification will review your application to confirm that you have submitted all required documents.
• The Bureau of Licensure and Certification will contact you to conduct an initial on-site inspection of the home that you propose to use for residential care. Inspectors verify the safety and sanitary condition of the facility.
• The Bureau of Licensure and Certification will interview the proposed facility operator to confirm the capability of the operator and employees to provide supervision and personal care services. They will check the appropriateness of the placement of each resident in the home.
• Residential facilities that serve residents with serious mental illness have an additional obligation to have employees and managers oriented to the care and supervision needs of these residents and to require specific training on an annual basis relevant to persons with a diagnosis of mental illness residing in the facility.
Do I have to own the home that I want to start the RF2 in or can I rent a home?
To operate a Residential Class 2 Facility, you can either rent or own a home to utilize as your facility. If you plan on renting from a landlord, you will want to disclose the information on what the property will be used for. The major difference between owning and renting a facility is the utilization of grant funding. When you rent a property, you cannot make capital improvements yourself to the property, as that is the discretion of your landlord. However, it is their obligation to uphold the property and safety measures, versus if you are owning a property for a facility, contingency planning for emergencies (e.g., a funding reserve), the onus falls upon you as the provider and homeowner to ensure structural integrity and a safe space to live.
How do I determine the size of the home needed to start a RF2?
Most Residential Class 2 Facilities are operated within a single-family home, traditionally with about 3 – 4 bedrooms. Depending upon the dimensions of the room, these rooms can be broken into a ‘shared’ room where 2 residents can occupy. There are also ‘private’ rooms for those who may desire a more private space for belongings and peace of mind. When it comes to determining the size of your home to start a Residential Class 2 Facility, you should look for a property that has a good amount of square footage, and if you intend on working with special populations outside of mental health (e.g., mobility issues, handicap, etc.) have wheelchair accessibility and access to different levels of the property.
How do I determine the number of residents that I may be able to have in my RF2?
Determining the number of residents that you may be able to have in your facility will ultimately come down to what the Ohio Department of Mental Health & Addiction Services (OhioMHAS) Licensure and Certification team will make the final decision on how many residents you are able to take care of, depending on your square footage and home layout. Keep in mind that when you start your facility, you might not have the number of residents that you are licensed to serve. It is possible that your capacity can fluctuate, even within your first couple of months of operations.
How long does it take to get my home licensed?
To get your license for your Residential Class 2 Facility, you will need to have done the following:
• Obtained a building and zoning certificate
• Apply for your facility under a Residential Class 2 Facility license through OhioMHAS (business license)
• Set up an Ohio ID with the LACTS system through OhioMHAS (refer to LACTS User Guide)
• Attend a New Provider training provided free by OhioMHAS and the OACFA (held quarterly)
• Submit a complete initial application for licensure, including the application fee. The application fee is $75 for all Class 2 facilities. You must submit a fully complete application with payment included or your application will not be reviewed
• The OhioMHAS Bureau of Licensure and Certification will review your application to confirm that you have submitted all required documents
• The Bureau of Licensure and Certification will contact you to conduct an initial on-site inspection of the home that you propose to use for residential care. Inspectors verify the safety and sanitary condition of the facility
• The Bureau of Licensure and Certification will interview the proposed facility operator to confirm the capability of the operator and employees to provide supervision and personal care services. They will check the appropriateness of the placement of each resident in the home
Residential facilities that serve residents with serious mental illness have an additional obligation to have employees and managers oriented to the care and supervision needs of these residents and to require specific training on an annual basis relevant to persons with a diagnosis of mental illness residing in the facility. To be prepared for the licensure process, we recommend that you use the OhioMHAS’ Survey Tool that was created to assist you.
Admittedly, there are quite a few steps to take to start operations within your licensed Residential Class 2 Facility. Rest assured, the quicker the items (above) are taken care of, the quicker it will be to begin operations.
Do I have to get my home licensed, or can I just house a few people without being licensed?
To be a licensed Residential Class 2 Facility through OhioMHAS, you will need to have your entire home/facility licensed for the appropriate number of beds that are determined by OhioMHAS’ Licensure and Certification team.
How Do I Get Residents/Clients?
The Ohio Adult Care Facilities Association and OhioMHAS are not responsible for resident referrals nor is OhioMHAS responsible for filling beds to capacity. It is the sole responsibility of the Owner/Operator to get resident references. Some good places to build relationships for potential residents include:
• Behavioral Health service providers
• Discharge planners and social services professionals of local hospitals or health care facilities, and nursing homes
• Local Alcohol, Drug Addiction and Mental Health Services (ADAMHS) boards
• Area Agencies on Aging (AAA)
• Homeless shelters
• Centers for Independent Living
• Departments of Social Services (state offices)
• Vocational Rehabilitation providers
• Physicians specializing in geriatrics, family practice or other specialty groups related to your target population(s)
• The Ohio Adult Care Facility Association (OACFA) Housing Locator: https://ohioadultcarefacilities.org/housing-locator/
Developing relationships with these agencies will help with the sustainability of your home.
How do individuals pay for their housing in an RF2?
An individual can pay for housing in a Residential Class 2 Facility by:
• Private pay
• Receiving supplemental income, such as SSI/SSDI benefits
• Receiving Medicaid—eligible for the Residential State Supplement (RSS)
• The Residential State Supplement (RSS) is Ohio’s Optional State Supplementation program
It provides financial assistance to adults with disabilities who wish to live in the community
Individuals who enroll in RSS have increased needs due to a disability that is not severe enough to require long-term care in an institution, such as a nursing home or hospital
They use RSS, which supplements their income, to pay for Accommodations, Supervision and Personal Care Services in eligible living arrangements (Class Two Residential Facilities) in the community
RSS is one of the Ohio Department of Mental Health and Addiction Services (OhioMHAS) Community Transitions programs that provide resources to individuals by supporting person driven transitions to integrated community settings and facilitating collaboration among local providers who individuals choose to be part of their recovery process
To learn more about RSS, please visit: https://mha.ohio.gov/get-help/recovery-supports/residential-state-supplement
Where and How Do I Get Registered for Mental Health Trainings?
For a current and future list of trainings for Residential Class 2 Facility operators, you can visit here: https://ohioadultcarefacilities.org/become-a-member/training-events/