What is in Your Benefits Package?
Kyle Claussen
The financial value of your employment extends beyond just the stated salary in your contract. While compensation numbers are often what draws your attention first, the benefits package can be equally important in maximizing the value of your contract. We often hear about benefits in a general sense, but what actually comprises a benefits package? And is it what you deserve?
We will go over some of the key elements of a benefits package so that you can be better prepared when the time comes to sit down and negotiate your contract. Just like understanding what a competitive salary for your specialty is, knowing what to look for in a benefits package helps you see the full financial picture of your contract.
Medical and Dental Coverage
Health care coverage for physicians is similar to coverage offered to any other member of the general workforce. Your employer will most likely offer a variety of medical plan options. Preferred provider organizations (PPOs) are the most common with health maintenance organizations (HMOs) being the second most common. A common cost sharing for medical and dental coverage is 80% paid by the employer and 20% by the employee and can be a 70% and 30% split for your dependents.
Disability Insurance
Disability insurance is crucial in protecting the investment you’ve made in becoming a physician. You will want to look at the terms of your disability insurance very closely and get an understanding of the different expectations and requirements. There are two types of disability coverage: short-term and long-term.
Short-term – In the event of a short-term illness, you will continue to receive some designated amount of your salary.
Long-term – Long-term coverage helps replace some of your income for an extended period when you cannot work or can only work part-time because of a disability. If the basic group coverage offered to you does not meet your unique coverage needs, you may need supplemental long-term disability insurance. In this case, it could be your responsibility to cover the additional cost.
There are also some additional considerations you should make when looking over your coverage plan, specifically whether the long term disability insurance is “own-occupation. Other items to review include: When does your coverage start? And what elimination period must you fulfill? Also, look at what criteria triggers a benefit and to what age a benefit is payable.
Retirement Savings Plans
Investing early and often in your retirement fund is important to ensuring you are financially prepared for retirement. You are most likely going to be looking at a 30 year time frame in which you can invest, so make sure the retirement plan offered by your employer will meet your needs.
The most common retirement plans among employers are 401(k) and 403(b) plans. Currently, the maximum contribution you can make to your account each year is $18,000. Some employers may match these contributions, match a percentage of a contribution, or may not match any amount at all. This is a topic you will need to discuss in the negotiation phase. Also, try to find out whether you are immediately eligible upon employment for your employer-offered plan or if you must fulfill one year of employment first.
Student Loan Repayment
Another valuable benefit, especially for new physicians, is student loan repayment. According to news sources, the average medical student graduates with $166,750 of debt. That is a steep sum, and when an organization offers a student loan payment program, it can be a mutually beneficial situation. Student loan-repayment benefits typically range in value from $15,000 to $30,000 per year and may max out at $100,000 to $150,000 for the total repayment. As you can see, this benefit can be enormously helpful in paying down a large amount of medical school debt. Only about 20% of employers offer student loan repayment, so you may have to negotiate for this benefit if it is not initially offered.
Malpractice Coverage
Malpractice insurance is a benefit that is typically fully paid by your employer and obtained through conventional insurance providers. In the event that you leave a job where you have claims-made malpractice coverage, you will need to acquire malpractice tail coverage for any potential suits brought against you after leaving. A potential employer may offer to cover the cost of your tail coverage in order to incentivize you. You should carefully review they type and amounts of insurance offered and fully understand tail coverage needs from both a previous employer, and also any potential future needs in the event your new contract terminates.
CME & Professional Dues
Continuing medical education expenses and professional dues are an expected part of being a physician, so your employer may cover these costs as an added benefit. This will also typically include paid time off so that you can travel in order to take the necessary classes. CME allowances can range from $3,000 to $5,000 and paid time off from one to two weeks. Professional dues and medical licensure fees are usually paid in full as well.
See the Full Financial Picture
Your benefits package can be an extremely valuable part of your employment agreement. When looking over your contract and going through the negotiation process, give a considerable amount of time and effort to making sure the benefits meet your needs. Knowing that you are covered in the event of a medical emergency or lawsuit, or just knowing you will be able to retire, makes both your professional and home life that much less stressful. Resolve has legal professionals that will review your contract and help you negotiate your employment terms.
» More: Have your contract reviewed.