Iowa Consumer Choices Option: How to Get Paid as a Family Caregiver in 2026

You quit your job eight months ago to take care of your mother full-time. You're bathing her, managing her medications, cooking three meals a day, doing laundry, and driving her to appointments. You're doing the work of a paid home care aide — for free — and your savings are running out.

Iowa has a legal pathway for family members to get paid for this caregiving through Medicaid. But the program structure changed significantly at the end of 2025, and most families are working with outdated information.

What Changed: ICDAC Ended December 31, 2025

The Individual Consumer-Directed Attendant Care (ICDAC) program — where the Iowa Medicaid Enterprise directly managed individual provider enrollment — ended on December 31, 2025, due to federal tax compliance issues. If you've been searching for ICDAC information and hitting dead ends, this is why.

The two active pathways for 2026 are Consumer-Directed Attendant Care (CDAC) through the MCOs and the Consumer Choices Option (CCO).

CDAC: The MCO-Managed Path

Under CDAC, the Medicaid Elderly Waiver recipient selects their own individual care provider — which can be an adult child, other family member, neighbor, or friend. The critical restriction: spouses cannot be paid caregivers under CDAC or CCO.

How it works:

1. The Elderly Waiver recipient requests CDAC through their MCO case manager
2. The chosen caregiver completes enrollment through Iowa Medicaid Enterprise, including a background check through the Direct Care Worker Registry
3. Both parties sign Form 470-3372 (HCBS CDAC Agreement), which specifies services, schedule, and responsibilities
4. The MCO approves the agreement and authorizes hours based on the care plan
5. The caregiver submits timesheets to the MCO for payment

The MCO handles billing and payment processing. The caregiver is treated as an individual provider — not an employee of the MCO or the family.

CCO: The Self-Directed Employer Model

The Consumer Choices Option gives the care recipient more control — they act as the employer of record. A fiscal management service (currently Veridian Fiscal Solutions in Iowa) handles payroll, tax withholding, and compliance.

Under CCO, the recipient receives a monthly budget allocation based on their assessed needs. They decide:

• Who to hire (including family members, excluding spouse)
• What hours they work
• What tasks they perform (within the care plan scope)

The 2026 caregiver rate under CCO is $4.03 per 15-minute unit (billing code T1019). That works out to approximately $16.12 per hour before taxes. Veridian handles payroll deductions, workers' comp, and tax filings.

How to Enroll

For CDAC:

1. Your parent must already be enrolled in the Elderly Waiver with an active MCO
2. Contact the MCO case manager and request CDAC be added to the care plan
3. The chosen caregiver completes the IME Individual Provider Enrollment Application
4. Pass the Direct Care Worker Registry background check
5. Sign Form 470-3372 and get MCO approval
6. Begin providing care and submitting timesheets

For CCO:

1. Request CCO enrollment through the MCO case manager
2. Complete Veridian Fiscal Solutions' employer orientation and training
3. Set up the employer-employee relationship with your chosen caregiver
4. Veridian processes payroll based on submitted time records

The MCO case manager guides the transition and helps determine which option (CDAC or CCO) fits the family's situation better. CDAC is simpler administratively; CCO offers more flexibility and control.

What You Need to Know About Taxes

Under both CDAC and CCO, caregiver income is taxable. Veridian (for CCO) handles withholding automatically. For CDAC providers, the MCO issues a 1099 — you're responsible for estimated tax payments and self-employment tax.

Some family caregivers qualify for the "difficulty of care" income exclusion under IRS Notice 2014-7 if the care recipient lives in the caregiver's home. Consult a tax professional — this exclusion can significantly reduce your tax burden.

Ongoing Requirements

Once enrolled, caregivers must:

• Record daily services using Form 470-4389 (CDAC Daily Service Record) or the CCO equivalent
• Submit timesheets monthly (payment is processed the month after services are rendered)
• Participate in annual care plan reviews with the MCO case manager
• Maintain current background checks

Missing timesheets or late submissions delay payment. Set a monthly schedule for paperwork to avoid gaps.

The Iowa home care guide includes the complete CCO enrollment checklist, CDAC agreement template walkthrough, and a billing and timesheet guide for family caregivers.

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