TITLE 22. SOCIAL SERVICES

STATE BOARD OF SOCIAL SERVICES

Proposed Regulation

Title of Regulation: 22VAC40-73. Standards for Licensed Assisted Living Facilities (amending 22VAC40-73-45, 22VAC40-73-50, 22VAC40-73-390).

Statutory Authority: §§ 63.2-217, 63.2-1732, 63.2-1802, 63.2-1805, and 63.2-1808 of the Code of Virginia.

Public Hearing Information: No public hearing is currently scheduled.

Public Comment Deadline: February 13, 2026.

Agency Contact: Daniella Halbleib, Licensing Consultant, Department of Social Services, 5600 Cox Road, Glen Allen, VA 23060, telephone (804) 718-1184, fax (804) 726-7132, or email daniella.halbleib@dss.virginia.gov.

Basis: Sections 63.2-217, 63.2-1732, and 63.2-1805 of the Code of Virginia authorize the State Board of Social Services to adopt regulations and requirements for licensed assisted living facilities (ALFs), including for the activities, services, and facilities to be employed by persons and agencies required to be licensed, which must be designed to ensure that such activities, services, and facilities are conducive to the well-being of adults who are aged or infirm or who have disabilities residing in ALF.

Purpose: This action is essential to protect the health, safety, and well-being of adults who are aged or infirm or who have disabilities residing in an ALF because it requires a minimum amount of liability insurance to compensate residents or other individuals for injuries and losses from the negligent acts of the facility.

Substance: The amendments (i) remove a requirement that an ALF maintain a minimum amount of liability insurance coverage for the purposes of disclosure; (ii) adds a requirement that all ALFs maintain liability insurance coverage in the amounts based upon the licensed capacity of the facility; and (iii) clarify the requirements of notifying, upon request, residents and prospective residents of the minimum liability insurance coverage maintained by the ALF.

Issues: The primary advantage to the public is that residents of ALFs will have financial recourse in the event of injuries or losses due to a negligent act of the facility. The primary advantage to the ALF is financial coverage in the event of a lawsuit by a resident. There could be a disadvantage to the ALF as this will be an additional expense if the facility has not previously maintained liability insurance. There are no advantages or disadvantages to the agency or Commonwealth.

Department of Planning and Budget Economic Impact Analysis:

The Department of Planning and Budget (DPB) has analyzed the economic impact of this proposed regulation in accordance with § 2.2-4007.04 of the Code of Virginia and Executive Order 19. The analysis presented represents DPB's best estimate of the potential economic impacts as of the date of this analysis.¹

Summary of the Proposed Amendments to Regulation. In response to 2023 legislation (Chapter 580), the State Board of Social Services (board) proposes a permanent regulation to replace an emergency regulation which established minimum liability insurance requirements for Assisted Living Facilities (ALF). The emergency regulation became effective on July 26, 2024, and is scheduled to expire on January 25, 2026.

Background. Prior to Chapter 580, § 63.2-1805 of the Code of Virginia required that ALFs disclose whether they maintain liability insurance, but did not require such insurance be maintained and also specified that the board establish in regulation the minimum amount of liability insurance coverage to be maintained by an ALF if it chose to disclose that it maintained liability insurance coverage. Accordingly, the current regulation states that the minimum is $500,000 per occurrence to compensate residents or other individuals for injuries and losses from the negligent acts of the facility; and $500,000 aggregate to compensate residents or other individuals for injuries and losses from the negligent acts of the facility. According to the Department of Social Services (DSS), the aggregate limit is the total amount the insurer will pay in any one policy term (one year). So, an ALF could state that it has liability insurance coverage if it purchased a policy that pays out up to $500,000 per legitimate occurrence but that would not pay out more than $500,000 for all occurrences in total per year.² Chapter 580 amended § 63.2-1805 of the Code of Virginia so that it now requires that ALFs maintain liability insurance, not just disclose whether they have it. Additionally, Chapter 580 added the following to § 63.2-1805 of the Code of Virginia directing the board to establish tiers in the regulation when establishing the minimum amount of liability insurance coverage: In establishing such minimum amount of liability insurance, the board shall consider the number of residents for which an assisted living facility is licensed and establish a minimum amount of liability insurance for the following tiers: Tier I, which shall govern assisted living facilities with no more than 25 residents; Tier II, which shall govern assisted living facilities with more than 25 residents but no more than 75 residents; Tier III, which shall govern assisted living facilities with more than 75 residents but no more than 150 residents; and Tier IV, which shall govern assisted living facilities with more than 150 residents; In response, the board proposes to remove the current text on minimum liability insurance coverage and add the following to the permanent regulation: Assisted living facilities shall maintain liability insurance coverage per occurrence according to the following licensed capacity tiers: 1. Tier I: A minimum of $250,000 for facilities licensed for 25 residents or fewer; 2. Tier II: A minimum of $400,000 for facilities licensed for more than 25 but no more than 75 residents; 3. Tier III: A minimum of $500,000 for facilities licensed for more than 75 but no more than 150 residents; or 4. Tier IV: A minimum of $1,000,000 for facilities licensed for 151 or more residents. The proposed text does not include an aggregate amount limit to what insurers pay in a year. These changes largely match what is in the emergency regulation now in effect.

Estimated Benefits and Costs. Liability insurance held by ALFs can be substantively beneficial for their residents. It helps enable them to be financially compensated for injuries and losses from the negligent acts of the facility. The legislation mandating liability insurance increases costs for ALFs that did not previously have liability insurance. After the emergency regulation was in effect, DSS sent a survey to all licensed ALFs that asked for their liability insurance costs. According to the agency, controlling for outliers, the average reported annual cost is $18,180.³ The reported costs were not separated by tiers. The legislation left it to the board to establish in regulation the minimum amount of liability insurance coverage for each tier. Under the current permanent regulation, the minimum coverage that ALFs must have (before they can state that they have liability insurance coverage) includes a cap on the amount that insurers could be required to pay each year (the $500,000 aggregate). In the proposed permanent regulation, the board chose to not have a cap on the amount insurers could be required to pay each year. This may be beneficial for some residents of ALFs in that it eliminates the possibility that residents with legitimate claims lose out on proceeds due to a limit already having been met earlier in the year. Not having a cap would increase the potential payouts and hence costs for insurers. The insurers would likely at least partially pass on the cost to ALFs in higher premiums. When the emergency regulation was being considered, some public comments indicated a concern that some small ALFs would go out of business due to the cost of the required liability insurance. The emergency regulation required that ALFs obtain the required liability insurance by January 23, 2025. DSS reports that 561 of the 569 licensed ALFs have obtained the required insurance, and none have gone out of business. The agency has also stated that if an ALF's only violation is not maintaining the minimum amount of liability insurance, it would not have its license revoked.

Businesses and Other Entities Affected. The proposed amendments affect the 569 ALFs in the Commonwealth, as well as their residents and firms that provide liability insurance.

The Code of Virginia requires DPB to assess whether an adverse impact may result from the proposed regulation.⁴ An adverse impact is indicated if there is any increase in net cost or reduction in net benefit for any entity, even if the benefits exceed the costs for all entities combined.⁵ Not including a cap on the potential payouts per year for insurance companies is potentially beneficial for ALF residents, but it would likely result in higher premiums for ALFs Thus, an adverse impact is indicated for ALFs.

Small Businesses⁶ Affected.⁷ Types and Estimated Number of Small Businesses Affected: DSS estimates that over half of the ALF are small businesses. Small firms that provide liability insurance are also affected. Costs and Other Effects: The legislative mandate for liability insurance with the Board determined specifics on the minimum insurance required increase costs for small ALFs that otherwise would not have chosen to purchase liability insurance or that would have purchased less than the proposed required minimum. These requirements potentially benefit small firms that provide liability insurance through increased demand for their product. Alternative Method that Minimizes Adverse Impact: There are no clear alternative methods that would both reduce adverse impact for those negatively affected without reducing benefit for others.

Localities⁸ Affected.⁹ The two counties, Chesterfield and Orange, and five local authorities that run ALFs are particularly affected. The local authorities are Mount Rogers Community Services Board (Bland, Carroll, Grayson, Smyth, and Wythe Counties and the City of Galax), Fairfax County Redevelopment Housing Authority, Region 10 Community Services Board (Albemarle, Fluvanna, Greene, Louisa, and Nelson Counties and the City of Charlottesville), New River Valley Community Services Board (Floyd, Giles, Montgomery, and Pulaski Counties and the City of Radford), and Western Tidewater Community Services Board (Isle of Wight and Southampton Counties, and the Cities of Franklin and Suffolk).

Projected Impact on Employment. There has been public concern that the increased costs associated with the required liability insurance would result in the closing of small ALFs. This would reduce employment. According to DSS, no ALF has closed since the requirement in the emergency regulation has been in effect.

Effects on the Use and Value of Private Property. The legislative mandate for liability insurance with the Board-determined specifics on the minimum insurance required, increase costs for ALFs that otherwise would not have chosen to purchase liability insurance or that would have purchased less than the proposed required minimum. These requirements benefit firms that provide liability insurance through increased demand for their product. Thus, the value of some ALFs would be reduced, while the value of some insurers would increase. The legislation and proposed regulation do not affect real estate development costs.

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¹ Section 2.2-4007.04 of the Code of Virginia requires that such economic impact analyses determine the public benefits and costs of the proposed amendments. Further the analysis should include but not be limited to: (1) the projected number of businesses or other entities to whom the proposed regulatory action would apply, (2) the identity of any localities and types of businesses or other entities particularly affected, (3) the projected number of persons and employment positions to be affected, (4) the projected costs to affected businesses or entities to implement or comply with the regulation, and (5) the impact on the use and value of private property.

² For example, say an ALF has this minimum insurance and in a year three residents each make $250,000 claims. The first two claims (if found valid) would be paid out, but the third would not, because the $500,000 aggregate limit per year was reached after the second claim was paid out.

³ DSS states that the survey was sent to the 566 ALFs that were licensed at the time, but only 17 reported the dollar amount of their liability insurance premiums..

⁴ Pursuant to § 2.2-4007.04 D: In the event this economic impact analysis reveals that the proposed regulation would have an adverse economic impact on businesses or would impose a significant adverse economic impact on a locality, business, or entity particularly affected, the Department of Planning and Budget shall advise the Joint Commission on Administrative Rules, the House Committee on Appropriations, and the Senate Committee on Finance. Statute does not define "adverse impact," state whether only Virginia entities should be considered, nor indicate whether an adverse impact results from regulatory requirements mandated by legislation.

⁵ Statute does not define "adverse impact," state whether only Virginia entities should be considered, nor indicate whether an adverse impact results from regulatory requirements mandated by legislation. As a result, DPB has adopted a definition of adverse impact that assesses changes in net costs and benefits for each affected Virginia entity that directly results from discretionary changes to the regulation.

⁶ Pursuant to § 2.2-4007.04, small business is defined as "a business entity, including its affiliates, that (i) is independently owned and operated and (ii) employs fewer than 500 full-time employees or has gross annual sales of less than $6 million."

⁷ If the proposed regulatory action may have an adverse effect on small businesses, § 2.2-4007.04 requires that such economic impact analyses include: (1) an identification and estimate of the number of small businesses subject to the proposed regulation, (2) the projected reporting, recordkeeping, and other administrative costs required for small businesses to comply with the proposed regulation, including the type of professional skills necessary for preparing required reports and other documents, (3) a statement of the probable effect of the proposed regulation on affected small businesses, and (4) a description of any less intrusive or less costly alternative methods of achieving the purpose of the proposed regulation. Additionally, pursuant to § 2.2-4007.1 of the Code of Virginia, if there is a finding that a proposed regulation may have an adverse impact on small business, the Joint Commission on Administrative Rules shall be notified.

⁸ "Locality" can refer to either local governments or the locations in the Commonwealth where the activities relevant to the regulatory change are most likely to occur.

⁹ Section 2.2-4007.04 defines "particularly affected" as bearing disproportionate material impact.

Agency Response to Economic Impact Analysis: The Department of Social Services reviewed the economic impact analysis prepared by the Department of Planning and Budget and has no comments.

Summary:

Pursuant to Chapter 580 of the 2023 Acts of Assembly, the proposed amendments require every assisted living facility (ALF) to maintain a minimum amount of liability insurance, as determined by the State Board of Social Services on the basis of the number of residents for which the ALF is licensed, and provide notice of such insurance, upon request, to any resident or prospective resident.

22VAC40-73-45. Minimum amount for liability Liability insurance disclosure.

A. The minimum amount of liability insurance coverage to be maintained by an assisted living facility for purposes of disclosure in the statement required by 22VAC40-73-50 and the resident agreement required by 22VAC40-73-390 is as follows: Assisted living facilities shall maintain liability insurance coverage per occurrence according to the following licensed capacity tiers:

1. $500,000 per occurrence to compensate residents or other individuals for injuries and losses from the negligent acts of the facility; and Tier I: A minimum of $250,000 for facilities licensed for 25 residents or fewer;

2. $500,000 aggregate to compensate residents or other individuals for injuries and losses from the negligent acts of the facility. Tier II: A minimum of $400,000 for facilities licensed for more than 25 but no more than 75 residents;

3. Tier III: A minimum of $500,000 for facilities licensed for more than 75 but no more than 150 residents; or

4. Tier IV: A minimum of $1,000,000 for facilities licensed for 151 or more residents.

B. No facility shall state that liability insurance is in place unless the insurance provides the minimum amount of coverage established in subsection A of this section. Each facility shall prepare and provide, upon request of the prospective resident or resident and resident's legal representative, if any, a statement that the facility maintains liability insurance in force to compensate residents or other individuals for injuries and losses from the negligent acts of the facility. The statement shall be made on the liability insurance statement form provided by the department.

22VAC40-73-50. Disclosure.

A. The assisted living facility shall prepare and provide a statement to the prospective resident and his the prospective resident's legal representative, if any, that discloses information about the facility. The statement shall be on a form developed by the department and shall:

1. Disclose information fully and accurately in plain language;

2. Be provided in advance of admission and prior to signing an admission agreement or contract;

3. Be provided upon request; and

4. Disclose the following information, which shall be kept current:

a. Name of the facility;

b. Name of the licensee;

c. Ownership structure of the facility (e.g., individual, partnership, corporation, limited liability company, unincorporated association, or public agency);

d. Description of all accommodations, services, and care that the facility offers;

e. Fees charged for accommodations, services, and care, including clear information about what is included in the base fee and all fees for additional accommodations, services, and care;

f. Criteria for admission to the facility and restrictions on admission;

g. Criteria for transfer to a different living area within the same facility, including transfer to another level or type of care within the same facility or complex;

h. Criteria for discharge;

i. Categories, frequency, and number of activities provided for residents;

j. General number, position types, and qualifications of staff on each shift;

k. Whether or not the facility maintains liability insurance that provides at least the minimum amount of coverage established by the board for disclosure purposes set forth in 22VAC40-73-45 to compensate residents or other individuals for injuries and losses from negligent acts of the facility. The facility shall state in the disclosure statement the minimum amount of coverage established by the board in 22VAC40-73-45;

l. k. Whether or not the facility has an onsite emergency electrical power source for the provision of electricity during an interruption of the normal electric power supply. If the facility does have an onsite emergency electrical power source, the statement must include (i) the items for which the source will supply power and (ii) whether or not staff of the facility have been trained to maintain and operate the power source. For the purposes of this subdivision k, an onsite emergency electrical power supply shall include both permanent emergency electrical power sources and portable emergency electrical power sources, provided that such temporary electrical power supply source remains on the premises of the facility at all times. Written acknowledgment of the disclosure shall be evidenced by the signature or initials of the resident or his the resident's legal representative immediately following the onsite emergency electrical power source disclosure statement;

m. l. Notation that additional information about the facility that is included in the resident agreement is available upon request; and

n. m. The department's website address, with a note that additional information about the facility may be obtained from the website.

B. Written acknowledgment of the receipt of the disclosure by the resident or his the resident's legal representative shall be retained in the resident's record.

C. The disclosure statement shall also be available to the general public, upon request.

22VAC40-73-390. Resident agreement with facility.

A. At or prior to the time of admission, there shall be a written agreement/acknowledgment agreement or acknowledgment of notification dated and signed by the resident or applicant for admission or the appropriate legal representative, and by the licensee or administrator. This document shall include the following:

1. Financial arrangement for accommodations, services, and care that specifies:

a. Listing of specific charges for accommodations, services, and care to be made to the individual resident signing the agreement, the frequency of payment, and any rules relating to nonpayment;

b. Description of all accommodations, services, and care that the facility offers and any related charges;

c. For an auxiliary grant recipient, a list of services included under the auxiliary grant rate;

d. The amount and purpose of an advance payment or deposit payment and the refund policy for such payment, except that recipients of auxiliary grants may not be charged an advance payment or deposit payment;

e. The policy with respect to increases in charges and length of time for advance notice of intent to increase charges;

f. If the ownership of any personal property, real estate, money, or financial investments is to be transferred to the facility at the time of admission or at some future date, it shall be stipulated in the agreement; and

g. The refund policy to apply when transfer of ownership, closing of facility, or resident transfer or discharge occurs.

2. Requirements or rules to be imposed regarding resident conduct and other restrictions or special conditions.

3. Those actions, circumstances, or conditions that would result or might result in the resident's discharge from the facility.

4. Specific acknowledgments that:

a. Requirements or rules regarding resident conduct, other restrictions, or special conditions have been reviewed by the resident or his the resident's legal representative;

b. The resident or his the resident's legal representative has been informed of the policy regarding the amount of notice required when a resident wishes to move from the facility;

c. The resident has been informed of the policy required by 22VAC40-73-840 regarding pets living in the facility;

d. The resident has been informed of the policy required by 22VAC40-73-860 K regarding weapons;

e. The resident or his the resident's legal representative or responsible individual, as stipulated in 22VAC40-73-550 H, has reviewed § 63.2-1808 of the Code of Virginia, Rights and Responsibilities of Residents of Assisted Living Facilities, and that the provisions of this statute have been explained to him;

f. The resident or his the resident's legal representative or responsible individual, as stipulated in 22VAC40-73-550 H, has reviewed and had explained to him the facility's policies and procedures for implementing § 63.2-1808 of the Code of Virginia;

g. The resident has been informed and had explained to him that he that the resident may refuse release of information regarding his the resident's personal affairs and records to any individual outside the facility, except as otherwise provided in law and except in case of his the resident's transfer to another caregiving facility, notwithstanding any requirements of this chapter;

h. The resident has been informed that interested residents may establish and maintain a resident council, that the facility is responsible for providing assistance with the formation and maintenance of the council, whether or not such a council currently exists in the facility, and the general purpose of a resident council (See 22VAC40-73-830);

i. The resident has been informed of the bed hold policy in case of temporary transfer or movement from the facility, if the facility has such a policy (See 22VAC40-73-420 B);

j. The resident has been informed of the policy or guidelines regarding visiting in the facility, if the facility has such a policy or guidelines (See 22VAC40-73-540 C);

k. The resident has been informed of the rules and restrictions regarding smoking on the premises of the facility, including that which is those required by 22VAC40-73-820;

l. The resident has been informed of the policy regarding the administration and storage of medications and dietary supplements;

m. The resident, upon request, has been notified in writing whether or not that the facility maintains liability insurance that provides at least the minimum amount of coverage established by the board for disclosure purposes set forth in 22VAC40-73-45 to compensate residents or other individuals for injuries and losses from negligent acts of the facility. The facility shall state in the notification the minimum amount of coverage established by the board in 22VAC40-73-45. The written notification must be on a form developed by the department; and

n. The resident has received written assurance that the facility has the appropriate license to meet his the resident's care needs at the time of admission, as required by 22VAC40-73-310 D.

B. Copies of the signed agreement/acknowledgment agreement or acknowledgment and any updates as noted in subsection C of this section shall be provided to the resident and, as appropriate, his the resident's legal representative and shall be retained in the resident's record.

C. The original agreement/acknowledgment agreement or acknowledgment shall be updated whenever there are changes to any of the policies or information referenced or identified in the agreement/acknowledgment agreement or acknowledgment and dated and signed by the licensee or administrator and the resident or his the resident's legal representative.

FORMS (22VAC40-73)

Report of Tuberculosis Screening (eff. 10/2011)

Virginia Department of Health Report of Tuberculosis Screening Form (undated)

Virginia Department of Health TB Control Program Risk Assessment Form, TB 512 (eff. 9/2016)

Assisted Living Facility Liability Insurance Statement, 032-05-0600-02-eng (eff. 4/2025)