Last updated 2026-07-24
TL;DR
A group home is a licensed residential setting, usually for 4 to 16 people, that provides supervision, meals, and support services for seniors, people with intellectual or developmental disabilities, mental illness, or those in recovery. It differs from assisted living (larger, private-pay focused) and nursing homes (skilled medical care). Licensing runs through your state health or social services agency.
what is a group home?
A group home is a licensed residential facility where a small number of unrelated people, typically 4 to 16 depending on the state and the population served, live together and receive some level of supervision, personal care, or behavioral support. It's not one single thing. The term covers adult foster care homes for seniors, intermediate care facilities for people with intellectual and developmental disabilities (IDD), community residences for people with mental illness, and sober living or recovery residences. What unites all of these is the model: a home-like setting, shared staff, and a state license that sets rules for staffing ratios, physical plant, food service, medication handling, and resident rights. A true group home is not a private arrangement between roommates. It requires a license from a state agency, usually the department of health, department of human services, or department of social services, and that license comes with an inspection cycle, a policy manual requirement, and reporting obligations [1]. Size is one of the biggest differentiators between a group home and other senior or disability housing. Federal housing and Medicaid guidance generally treats settings under 16 beds as "community-based," while anything larger starts to look institutional under CMS's home and community-based services (HCBS) settings rule [2]. Most states license group homes in the 4 to 10 bed range, with a handful allowing up to 15 or 16 before a facility is reclassified as something bigger, like a residential care facility or an intermediate care facility for individuals with intellectual disabilities (ICF/IID).
what is assisted living?
Assisted living is a licensed residential option for people, mostly seniors, who need help with daily activities like bathing, dressing, medication management, and meals, but don't need the level of medical care a nursing home provides. Assisted living communities are usually larger than group homes, often housing anywhere from 20 to over 100 residents, and they lean heavily on private pay, long-term care insurance, and in some states, Medicaid waivers rather than straight Medicaid coverage [3]. The regulatory category goes by different names depending on the state: assisted living facility, residential care facility for the elderly (RCFE) in California, personal care home in Georgia, or assisted living residence in Florida. Each state sets its own staffing ratios, admission and discharge criteria, and medication assistance rules. There's no single federal assisted living license because, unlike nursing homes, assisted living isn't directly regulated by CMS under the Nursing Home Reform Act [4]. If you're planning to open a facility that falls into this category rather than a small group home, the licensing steps, staffing math, and inspection prep look different enough that it's worth reading a dedicated guide on assisted living and on what a full assisted living facility license actually requires state by state.
what is an assisted living facility?
An assisted living facility (ALF) is the formal, licensed version of assisted living: a building or campus specifically licensed by a state agency to provide housing, meals, help with activities of daily living, and often medication administration to residents who live there. The word "facility" signals that it's a regulated entity, more than a service description. ALFs sit on a care spectrum between independent living (no license required, no hands-on care) and skilled nursing (licensed for medical and rehabilitative care). States define minimum staffing, often requiring an awake staff member on-site 24 hours a day, and most require a licensed administrator who has completed a state-approved training course [5]. Fire and life safety codes for ALFs typically follow the National Fire Protection Association's Life Safety Code, adopted with state-specific amendments, which is a different code path than the one used for family-scale group homes with fewer than 6 residents in many states [6]. Anyone comparing a smaller group home model against a larger ALF build-out should look closely at the licensed bed count they're targeting, because it changes almost every other requirement: fire sprinklers, staffing ratios, dietary staff certification, and the cost of the state application itself. For more detail on what that application packet actually contains, see our guide on assisted living facilities licensing paperwork.
what is assisted living vs nursing home?
| Medical staffing | Not required 24/7; medication aides common | Licensed nurses on-site 24/7 | |
|---|---|---|---|
| Regulator | State only, varies by name | State plus federal Medicare/Medicaid certification | |
| Typical resident | Needs ADL help, mostly mobile | Needs skilled nursing or rehab care | |
| Medicare coverage | Generally not covered | Short-term skilled stays can be covered | |
| Payment source | Mostly private pay, some Medicaid waivers | Medicare (short-term), Medicaid (long-term), private pay | Nursing homes must meet the federal requirements in 42 CFR Part 483, the same regulation that created the resident rights and quality of care standards enforced through CMS's Nursing Home Compare/Care Compare inspection data [8]. Assisted living facilities and group homes generally don't fall under that federal certification structure at all; their oversight is entirely state-driven, which is part of why rules vary so much from state to state. |
The core difference between assisted living and a nursing home is the level of medical care provided and who regulates it. Assisted living provides help with daily activities (bathing, dressing, medication reminders) in a residential, non-medical setting. Nursing homes, formally called skilled nursing facilities (SNFs), provide 24-hour medical care, including services from licensed nurses, and are certified under both state law and federal Medicare/Medicaid rules [7]. Here's a side-by-side of how they typically differ: | Feature | Assisted living | Nursing home (SNF) |
what does assisted living provide?
Assisted living typically provides a private or semi-private room or apartment, three meals a day, housekeeping, laundry, transportation to medical appointments, social and recreational activities, 24-hour supervision or staff availability, and help with activities of daily living like bathing, grooming, dressing, toileting, and medication reminders [3]. Most state licensing rules require an individualized service plan for each resident, reassessed periodically (commonly every 6 to 12 months, though the exact interval is set by each state agency), that documents the specific level of care and any changes in condition [5]. Some states allow assisted living communities to offer a higher tier of care, sometimes called "assisted living with dementia care" or a locked memory care unit, which comes with its own separate licensing add-on and staffing requirements. What assisted living does not typically provide is skilled nursing care, IV therapy, wound care beyond basic first aid, or rehabilitation therapy on an ongoing basis. If a resident's needs escalate past what the community's license allows, most states require a discharge or transfer to a higher level of care, and the admission agreement should spell out exactly what triggers that move.
does medicare cover assisted living facilities?
No. Medicare does not cover the cost of room and board at an assisted living facility, and it generally does not cover custodial care of any kind, whether that's in a group home, an assisted living community, or someone's own house. Medicare.gov states plainly that Medicare and Medicaid "generally don't cover long-term care in a facility unless the person also has a qualifying hospital stay" for short-term skilled care [9]. Medicare Part A can cover a limited stay in a skilled nursing facility, up to 100 days per benefit period, but only after a qualifying inpatient hospital stay of at least 3 days and only for skilled nursing or rehab services, not for long-term custodial assisted living [10]. That's a completely different benefit than paying an assisted living facility's monthly rent. Medicaid is the more relevant program for long-term coverage, but it works differently than people expect. Straight Medicaid does not pay for room and board in assisted living in most states. Instead, many states run a Medicaid Home and Community-Based Services (HCBS) waiver under Section 1915(c) of the Social Security Act that can cover the cost of personal care services delivered inside an assisted living setting, while the resident (or their family) still pays room and board separately . Coverage, waitlists, and eligibility rules vary heavily by state, so anyone planning around Medicaid revenue for a group home or assisted living build needs to confirm the current waiver rules with their state Medicaid agency before opening.
how to start a group home
Starting a group home means working through five broad phases: choosing your population and business structure, securing a compliant property, writing your policy and procedure manual, hiring and training staff, and passing your state's licensing inspection. None of these happen in a strict straight line; zoning and property searches often run in parallel with your license application. First, pick your population and license type. A group home for adults with IDD, a mental health residential facility, a recovery residence, and an adult foster care home for seniors are usually licensed under completely different chapters of state law, sometimes by different agencies entirely. Confirm with your state licensing agency which category matches the population you intend to serve, because the wrong starting point means redoing paperwork later. Second, find and vet a property. Group homes generally need to meet residential building and fire codes for the specific occupant load, plus state-specific requirements like minimum square footage per resident, number of bathrooms, egress windows in bedrooms, and in many states a fire marshal inspection before your health department will even schedule its own visit. Zoning matters here too: many states have "reasonable accommodation" protections under the federal Fair Housing Act that limit a municipality's ability to zone out small group homes, but the details of local zoning review still have to be worked through . Third, build your policy and procedure manual. Every state licensing application requires written policies covering admission and discharge criteria, medication management, emergency and disaster planning, resident rights, staff training, incident reporting, and behavior support (where applicable). This is usually the single largest paperwork lift in the whole process, and it's the piece most first-time applicants underestimate. Fourth, hire and train staff before your licensing inspection, not after. Most states require proof of completed background checks, TB testing or other health screenings, CPR/first aid certification, and role-specific training (medication administration, behavior intervention, abuse reporting) documented in each employee's personnel file before the home can open. Fifth, submit your license application with the required fee (this varies by state and license type, so confirm current fee amounts with your state licensing agency), schedule your pre-licensure inspection, and correct any deficiencies cited during that visit. Once you pass, you'll operate under a defined license period, commonly one to two years depending on the state, with renewal applications and unannounced inspections in between [1].
how do i start a group home? (step-by-step checklist)
If you want the condensed version, here's the practical order most operators follow, though your state may sequence a step or two differently: 1. Decide on the population you'll serve (seniors, IDD, mental health, recovery) and identify the specific state statute and licensing agency that governs it. 2. Form your business entity (LLC or corporation) and get an EIN, since almost every state application requires a registered legal entity, not a sole proprietorship, especially if you plan to bill Medicaid. 3. Research zoning for candidate properties before signing a lease or purchase agreement. Call the local planning department and ask directly whether a group home of your intended size is a permitted use or requires a conditional use permit or variance. 4. Draft your policies and procedures manual, covering every topic your state's licensing checklist requires (get that checklist directly from the agency's website; don't rely on a generic template alone). 5. Build your staffing plan: job descriptions, required certifications, shift coverage that meets the state's minimum staff-to-resident ratio around the clock, more than during business hours. 6. Submit your license application, background check paperwork, and fee. 7. Prepare for and pass the fire marshal inspection and the health/human services licensing inspection. 8. Get your license issued, then start intake, admissions, and (if applicable) your Medicaid or waiver provider enrollment process separately, since being licensed and being an approved Medicaid provider are two different steps. That last point trips people up constantly. States issue the operating license; a separate Medicaid enrollment process, often through the state Medicaid agency or a managed care organization, determines whether you can actually bill for services. Budget extra time, sometimes several additional months, for provider enrollment after licensure.
what's the difference between a group home and assisted living, in practice?
In practice, the biggest practical differences are size, population, and payment model. Group homes tend to be smaller (often under 10 residents), serve a narrower population (a specific disability category or age group), and rely more heavily on Medicaid waivers or state disability funding. Assisted living communities tend to be larger, serve a broader mix of seniors with varying needs, and lean on private pay. Staffing ratios also diverge. A group home for adults with IDD might require one direct care staff member for every 3 to 6 residents during waking hours, with lower ratios overnight, set by the specific state's IDD licensing rules. Assisted living ratios are often expressed more loosely, sometimes just as "sufficient staff to meet resident needs" plus a minimum of one awake staff person on-site at all times [5]. Confirm your state's exact ratio requirements before finalizing a staffing budget, because getting this wrong is one of the most common reasons for a failed inspection. Physical plant requirements differ too. A 6-bed group home operating out of a converted single-family home usually falls under residential building code with modest fire safety upgrades (smoke detectors, fire extinguishers, sometimes a sprinkler retrofit). A 60-unit assisted living building is functioning much closer to a commercial healthcare structure and falls under a stricter fire and life safety code path from day one [6].
how do zoning and inspections shape which model you can build?
Zoning and inspection requirements often decide which model is even feasible on a given property, before licensing rules come into play at all. Many states classify a group home of 6 or fewer unrelated residents with disabilities as a single-family residential use by law, which limits how much a city can restrict it through zoning, a protection that traces back to the Fair Housing Act's prohibition on discrimination against people with disabilities in housing . Larger group homes and assisted living buildings don't automatically get that protection and more often need a conditional use permit, special exception, or rezoning. Inspections follow a similar split. Small group homes are typically inspected by the state licensing agency plus the local fire marshal, on a schedule that's often annual or biennial depending on the state. Larger assisted living facilities usually face inspections from the state licensing agency, the fire marshal, a food service/health inspector for the commercial kitchen, and, if they accept Medicaid waiver residents, a separate program compliance review. Before committing to a property, call your local zoning office and ask two direct questions: is a group home a permitted use at this address, and what occupancy classification will the building department assign based on your intended resident count. Get the answer in writing if you can. Skipping this step is the single most expensive mistake first-time operators make, because a signed lease on a property that can't get zoning approval means starting the property search over from scratch.
how a licensing kit fits into this process
Every state publishes its own group home and assisted living licensing rules, application forms, and inspection checklists, usually for free on the licensing agency's website. You can absolutely build your application, policy manual, and staffing plan from those primary sources alone. Where operators tend to lose time is in translating dozens of pages of statute and agency guidance into an actual, submittable packet: a policy manual organized the way the inspector expects to see it, a staffing plan that matches the exact ratio language in your state's code, and a checklist that tracks which piece of paperwork goes to which agency. That's the gap our $299 one-time State Group Home Licensing Kit is built to close: state-specific templates and checklists assembled around your state's actual requirements, not a generic national template. It doesn't replace confirming current fees, forms, or statute numbers with your state licensing agency directly, and it doesn't promise any particular approval outcome, but it does cut a lot of the guesswork out of assembling the packet itself.
Frequently asked questions
what is assisted living?
Assisted living is a licensed residential option for people, usually seniors, who need help with daily activities like bathing, dressing, and medication management but don't need the round-the-clock skilled nursing care a nursing home provides. It's regulated at the state level, with names and rules varying widely (RCFE in California, personal care home in Georgia).
what is a group home?
A group home is a licensed residential setting, typically housing 4 to 16 people, where residents receive supervision and support services tied to a specific population: seniors, people with intellectual or developmental disabilities, mental illness, or those in recovery. It requires a state license, background-checked staff, and regular inspections.
what is an assisted living facility?
An assisted living facility is the formally licensed building or community authorized by a state agency to provide housing, meals, and help with daily activities to residents. It sits between independent living (no license needed) and skilled nursing (medical care) on the senior care spectrum.
what is assisted living vs nursing home?
Assisted living provides non-medical help with daily activities in a residential setting; a nursing home (skilled nursing facility) provides 24-hour licensed nursing care and is federally certified under Medicare and Medicaid rules in addition to state licensing. Nursing homes serve people who need ongoing medical or rehabilitative care.
what does assisted living provide?
Assisted living typically provides a room, three meals a day, housekeeping, laundry, transportation, activities, and help with bathing, dressing, and medication reminders, along with staff availability 24 hours a day. It does not typically include skilled nursing, IV therapy, or ongoing rehabilitation therapy.
does medicare cover assisted living facilities?
No. Medicare does not cover room and board or custodial care at assisted living facilities. Medicare Part A can cover up to 100 days of skilled nursing facility care after a qualifying hospital stay, but that's a distinct benefit from assisted living, according to Medicare.gov.
how to start a group home?
Choose your population and licensing category, form a business entity, find a property that clears zoning and fire code, write a full policy and procedure manual, hire and train staff to state requirements, then submit your license application and pass your state's pre-licensure inspection.
how do i start a group home?
Start by identifying the specific state agency and statute governing the population you want to serve (seniors, IDD, mental health, recovery), then work through entity formation, zoning confirmation, policy manual drafting, staffing, and the state license application in that order, confirming exact requirements with your state licensing agency.
what is the difference between assisted living and a group home?
Group homes are usually smaller (often under 10 residents), serve a narrower disability or age population, and often use Medicaid waiver funding. Assisted living communities are usually larger, serve a broader senior population, and rely mostly on private pay, with different staffing ratios and fire code requirements as a result.
how much does it cost to get a group home license?
License application fees vary widely by state and by license type, ranging from under $100 to several hundred dollars, sometimes tied to bed count. There is no single national fee. Confirm the current fee schedule directly with your state licensing agency before budgeting.
does medicaid pay for a group home or assisted living?
Medicaid rarely pays for straight room and board in assisted living. Many states run a Home and Community-Based Services waiver under Section 1915(c) that covers personal care services delivered in the home, while room and board is paid separately by the resident. Group home Medicaid coverage depends on the specific program and state.
how many residents can a group home have?
Most states license group homes for 4 to 16 residents, with the exact cap depending on the population served and the specific license category. Homes with 6 or fewer residents with disabilities often qualify as a protected single-family residential use under fair housing law in many states.
do i need a special license to open a group home?
Yes. Every state requires a specific operating license from its health, social services, or disability services agency before a group home can accept residents. The exact agency and statute depend on the population served, so confirm the correct license category with your state licensing agency first.
what's the difference between a group home and a nursing home?
A group home provides supervision and non-medical support to a small number of residents, often tied to disability or age category. A nursing home provides 24-hour skilled nursing care and is certified under federal Medicare/Medicaid rules in addition to state licensing, serving people with medical or rehabilitation needs.
Sources
- CMS, Home and Community-Based Services Settings Rule: CMS settings rule distinguishes community-based settings from institutional settings
- Medicaid.gov, Home and Community Based Services: Assisted living services and funding sources including waivers
- CMS, Nursing Home Reform Act requirements, 42 CFR Part 483: Federal certification requirements apply to nursing homes, not assisted living
- National Fire Protection Association, NFPA 101 Life Safety Code: Life Safety Code governs fire and building safety requirements for licensed care facilities
- Medicare.gov, Nursing home care: Nursing homes provide skilled medical and nursing care distinct from assisted living
- eCFR, 42 CFR Part 483 Subpart B, Requirements for Long Term Care Facilities: Federal resident rights and quality of care standards for certified nursing homes
- Medicare.gov, Long-term care: Medicare and Medicaid generally don't cover long-term custodial care in a facility
- Medicare.gov, Skilled nursing facility care coverage: Medicare Part A covers up to 100 days of skilled nursing facility care after a qualifying hospital stay
- Social Security Administration, Section 1915(c) Home and Community-Based Services waivers: Section 1915(c) waivers allow states to cover home and community-based personal care services
- U.S. Department of Justice, Fair Housing Act group home guidance: Fair Housing Act limits municipal zoning discrimination against small group homes for people with disabilities