How to Start a PCA or CFSS Agency in Minnesota: DHS Enrollment After the 2024 Change

If you are researching how to start a PCA agency business in Minnesota, the first thing to know is that the program has changed. Community First Services and Supports (CFSS) began on October 1, 2024 under Minn. Stat. 256B.85. It replaces personal care assistance (PCA) and the Consumer Support Grant. Agencies now enroll with the Minnesota Department of Human Services (DHS) as CFSS agency-providers, and DHS sets the requirements for who can do it.

This guide covers the business side (forming the entity, bonds, insurance and tax registration) and the DHS side (policies, training and the wage requirement). It is written for an owner who is about to file, not for an agency that is already enrolled. The program is still changing, so the DHS CFSS provider page is the final word on current steps.

Disclaimer: This article is informational content, not legal or tax advice. Work with a Minnesota attorney on your entity and contracts, and with a CPA on your tax treatment, before you file or sign anything. Confirm every DHS requirement directly with DHS.

What changed in 2024 and why it matters for your plan

Before October 1, 2024, many Minnesota home care businesses were built around PCA. Since then, CFSS has replaced PCA and the Consumer Support Grant. A new agency is building to the CFSS framework from day one, not to the PCA-era guidance you may still find in forums, old templates or blog posts. Two practical consequences follow:

• Check the DHS CFSS provider page for current enrollment steps and PCA transition details before you set a launch date.
• Treat older guidance with caution, including bond amounts, policy templates and training requirements you find online.

Materials and information you need before you start

Gather these items before you file anything. Missing one usually means a second round of paperwork.

• Name options. List at least three. An LLC name must contain 'limited liability company' or 'LLC', and may not contain 'corporation' or 'incorporated' or their abbreviations.
• A Minnesota street address for your registered office. A PO box by itself is not accepted.
• Owner information. Names, addresses and ownership percentages for every owner, plus a list of the managers who will run the agency.
• A Medicaid revenue projection. Your prior year Medicaid revenue determines which surety bond amount applies.
• Insurance and bond quotes. Quotes for a surety bond, a fidelity bond, workers' compensation and liability insurance.
• Draft written policies on hiring, training and safety.
• A federal Employer Identification Number (EIN) from the IRS, which is free to obtain.
• A filing budget. Articles of Organization cost $155 online or in person and $135 by mail.

Step-by-step: forming your agency and enrolling with DHS

Step 1: Choose your entity type

Most small agencies form a limited liability company (LLC). Minnesota has no separate LLC franchise tax. An LLC taxed as a partnership or disregarded entity passes its income through to the owners, who pay Minnesota individual income tax of 5.35 to 9.85 percent. An LLC that files federally as a C corporation pays the 9.8 percent corporation franchise tax instead. A corporation is formed with Articles of Incorporation under Chapter 302A and pays the 9.8 percent rate if it is a C corporation.

Minnesota also applies a minimum fee under Minn. Stat. 290.0922 to C corporations, S corporations and partnerships. Single member LLCs that report only on the member's individual return are exempt. The fee is $0 below 1,280,000 dollars of Minnesota property, payroll and sales, and rises in brackets to $12,830 at 51,280,000 dollars and above for 2026. Confirm which bracket your agency falls into with the Department of Revenue or a CPA.

Step 2: File Articles of Organization with the Secretary of State

File through Business Filings Online (the Minnesota Business and Lien System) at mblsportal.sos.mn.gov/Business/Search. Online and in-person filings cost $155 and are treated as expedited service. Mail filings cost $135 and are not expedited. The Secretary of State does not publish a guaranteed turnaround in business days, so build your DHS timeline around a range rather than a single date.

Search the same database before you file. Under Minn. Stat. 322C.0108, your name must be distinguishable from every domestic LLC, LLP, corporation and limited partnership on record. If you need to hold a name while you finish the DHS paperwork, a name reservation costs $55 for 12 months and renews in additional 12 month periods.

Name a registered office. Minnesota requires a registered office, not a registered agent. The office must be a Minnesota street address, and a registered agent is optional for a domestic entity. The registered office does not have to match your principal place of business, which helps if you run the agency from a home or a leased suite you do not want on the public record. Formation of an LLC or corporation requires no newspaper publication.

Step 3: Register an assumed name if you need one

If the agency will operate under a trade name that differs from the legal name, file a Certificate of Assumed Name with the Secretary of State's Business Services office at the assumed name page. It costs $50 online or in person, or $30 by mail. After filing, you must publish the certificate for two consecutive issues in the legal notices section of a qualified legal newspaper in the county of your principal place of business. Failure to publish may render the certificate invalid. Renew it each year at no charge. Newspapers set their own publication prices, so request a quote before you file.

Use the same name on your DHS enrollment that appears on your state filings. Confirm with DHS how it wants the legal and assumed names entered.

Step 4: Register for taxes with the Department of Revenue

Register with the Minnesota Department of Revenue at revenue.state.mn.us to get a Minnesota Tax ID and, if you will make taxable sales, a sales and use tax account. The Department's registration is a tax registration, not a license, and it is required before you make taxable sales. Whether your agency's services are taxable is a question for your CPA and the Department. State sales tax is 6.875 percent, with local taxes added on top. If you will have employees, ask the Department which withholding accounts you need.

Step 5: Check licensing by activity and by city

Minnesota has no general statewide business license. Your Secretary of State filing is a filing, and your tax registration is not a license. Licenses are issued by agency and by activity. The state's central lookup is License Minnesota at mn.gov/elicense. Search it for home care, and ask DHS whether any separate license applies to your CFSS work.

Local rules are a separate layer. Minnesota has 87 counties, about 853 cities and about 1,780 townships. Minneapolis and St. Paul license by category, and neither issues a general business license. Ask your city or township whether a home office or a leased office triggers zoning rules or a category license before you sign a lease.

Step 6: Secure your surety bond

DHS requires proof of a surety bond of $50,000. If your prior year Medicaid revenue exceeded $300,000, the bond must be $100,000. The bond must be renewed annually. A new agency has no prior year of revenue, so confirm with DHS which amount applies to you and how projected revenue is treated. The bond premium is set by the surety company, not the state, so get quotes from more than one provider.

Step 7: Buy fidelity bond and insurance coverage

DHS requires fidelity bond coverage of $20,000 per location. If you open a second location, add coverage for it. You also need workers' compensation and liability insurance. Ask your broker to confirm in writing that the policies meet DHS requirements, and keep the certificates in your enrollment file.

Step 8: Draft the organizational chart and written policies

DHS expects an organizational chart that shows the owners and managers. Keep it consistent with your Secretary of State filing and your EIN records, so names and roles match across every document. You also need written policies on hiring, training and safety. Write them to describe what you will actually do. A policy that describes a process your staff does not follow creates problems during any review.

Step 9: Build the wage requirement into your budget

Under Minn. Stat. 256B.85 subd. 12, at least 72.5 percent of your medical assistance revenue must go to support worker wages and benefits. For example, if your agency receives $100,000 in medical assistance revenue in a year, at least $72,500 must go to support worker wages and benefits. The remaining $27,500 covers everything else, including administration, insurance, bond premiums, rent and software. Confirm with DHS how employer payroll taxes are classified before you finalize the budget. Track the percentage monthly from the first day of billing so you can show it at any time.

Step 10: Complete the required training

Managers and active owners must complete DHS-required training. Put it on your launch calendar rather than treating it as an afterthought. Confirm the course list, format and timing with DHS, because requirements can change as the program changes. Keep a completion record for each person.

Step 11: Submit your DHS enrollment as a CFSS agency-provider

Gather everything into one folder: the Secretary of State filing, your EIN, your tax registration, proof of the surety bond, insurance certificates, the organizational chart, your policies and the training records. Check the DHS CFSS provider page for the current application steps, and submit exactly what DHS asks for. Missing items slow review, so send a complete package and answer any follow-up request quickly. Ask DHS for its current processing times, because this article does not state one.

Step 12: Set up your annual calendar

• December 31: Annual Renewal with the Secretary of State. It costs $0 if the LLC is active and in good standing.
• Each year: Renew the surety bond, and renew any assumed name certificate at no charge.
• Ongoing: Keep training records current, and confirm DHS reporting and renewal obligations on the DHS CFSS provider page.

Common mistakes to avoid

1. Using a PO box as the registered office. Minnesota requires a Minnesota street address.
2. Missing the December 31 Annual Renewal. An LLC that fails to file by that date may be terminated or revoked without further notice under Minn. Stat. 322C.0705. Reinstatement costs $65 by mail or $85 online or in person, per the current Secretary of State fee schedule.
3. Choosing the bond amount without checking the threshold. The $100,000 bond applies when prior year Medicaid revenue exceeded $300,000. Confirm the amount with DHS before you buy the bond.
4. Treating the tax registration as a business license. The Department of Revenue registration does not replace licenses or city requirements.
5. Using 'corporation' in an LLC name. The name rule in Minn. Stat. 322C.0108 applies to the words in your name.
6. Underbudgeting the wage percentage. The 72.5 percent floor applies to your medical assistance revenue, so a budget built around overhead can fall short.
7. Writing policies that limit where workers can go. Agencies cannot bar workers from serving other participants or agencies. Keep that out of your staffing agreements and handbook.
8. Relying on PCA-era guidance. CFSS replaced PCA and the Consumer Support Grant, so check current DHS requirements rather than older templates.

Tips that save time

• Run the name search first. A name that is too close to an existing record is a rejected filing, and a reservation can hold the name while you finish the DHS work.
• Get bond and insurance quotes early. Underwriting takes time, and the premiums affect the budget you need for the 72.5 percent wage floor.
• Match your names everywhere. Use the same legal name, assumed name, owner names and EIN information on every filing and on the DHS application.
• Use free advising. The Minnesota Small Business Development Center Network, administered by the Department of Employment and Economic Development, offers business advising at mn.gov/deed/business/help/sbdc. The U.S. Small Business Administration's Minnesota district page is at sba.gov/district/minnesota.
• Keep a single enrollment folder. Scan every document as it is issued so you can answer a DHS request in one day rather than one week.

What to expect after you file

Most of the work happens before DHS reviews your file. The Secretary of State filing is only the first step, so expect the full process to take longer than the state filing alone. The results you get depend on your staffing, the cost of your bond and insurance, and whether your wage budget holds up through the first months of billing. Following the steps above may put you in a better position to answer DHS questions quickly, but DHS makes the enrollment decision, and nothing in this guide guarantees approval, enrollment timing or revenue.

Cost summary

Item	Amount	Notes
LLC Articles of Organization	$155 online or in person; $135 by mail	Mail filings are not expedited
Annual Renewal (LLC or corporation)	$0	Due December 31; no fee if active and in good standing
Name reservation	$55	Holds the name for 12 months, renewable
Assumed name (DBA) certificate	$50 online or in person; $30 by mail	Plus newspaper publication for two consecutive issues; ask the newspaper for its price
LLC reinstatement	$65 by mail; $85 online or in person	Per the current Secretary of State fee schedule
Surety bond (DHS)	$50,000 or $100,000 in coverage	Premium is set by the surety; confirm the amount with DHS
Fidelity bond (DHS)	$20,000 coverage per location	Premium is set by the insurer
Corporation franchise tax	9.8%	Applies to C corporations
State sales tax	6.875%	Local taxes are added on top

Official resources

• Minnesota Secretary of State: sos.mn.gov, with business filings at mblsportal.sos.mn.gov/Business/Search
• Minnesota Department of Revenue: revenue.state.mn.us
• Minnesota Department of Human Services: mn.gov/dhs. Search for the CFSS provider page for current enrollment steps.
• License Minnesota: mn.gov/elicense
• Minnesota Small Business Development Center Network: mn.gov/deed/business/help/sbdc

This article is informational content, not legal or tax advice. Consult a qualified Minnesota attorney and CPA for your situation, and confirm all DHS requirements with the Department of Human Services before you enroll.