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Know Your Benefits Package

Evan Winter

When most people consider employment contract negotiation, the first item that comes to mind is salary. While a salary increase is regularly a main point of negotiation, it is important to remember that it is only part of a whole. A proper benefits package can add huge additional value to your contract by saving you funds and providing stability for the long term. So, what are the benefits physicians should look for, and which aspects of these benefits should be sought out in negotiations? 

Health Insurance 

When it comes to health coverage, physicians have options similar to any other employee. Most employers will offer a preferred provider organization (PPO) plan, while some will offer a health maintenance organization (HMO) plan. Different types of coverage will come with different terms and costs. Be sure to enter negotiations knowing what is standard for others like yourself and what is offered on the open market. For example, the common employer/employee cost sharing split for medical and dental coverage is 70% employer paid and 30% employee paid premium. You will need to discuss premiums, co-pays, deductibles, tax efficiency, and maximum out-of-pocket costs in order to ensure that you are receiving the coverage that best fits your situation.

Life Insurance 

Life insurance is meant to cover costs and protect your loved ones in the event of a tragedy. Determine what you have available and know the differences between term life insurance and permanent life insurance such as universal life, variable life, and whole life. Understand what your premium entails and whether it will be level or increase over time. Also decide how much coverage you need based on your dependents and risk factors derived from your lifestyle or existing health conditions. Life insurance is largely correlated to your current or future family plans. Therefore, be careful in choosing the right amount, length, time of protection, and type of coverage or you risk over-paying for a tool you that does not match your needs.

Disability Insurance 

Disability insurance is similar to life insurance in that it offers protection in case of an accident or tragedy, but that is about where the similarities end. Unlike life and death, disability is subjective and therefore disability insurance policies can vary significantly. You want a policy with a broad definition of “disability.” This may translate to a more expensive premium, but you will need to weigh your options to find what is best for you. There are two main types of coverage, short-term and long-term. Short-term disability will supplement some amount of your salary in the event of a short-term illness, while long-term replaces income for an extended period during which you cannot work or can only work part-time. Physicians often are seeking long-term disability insurance that protects their field specific own-occupation. Keep in mind the elimination period you must fulfill for coverage to begin, what criteria triggers a benefit, the period of time the benefit is received, and what riders are worth purchasing. There are many options here, and you will need to do some research to find the right coverage fit.

Malpractice Insurance 

Malpractice insurance is almost always paid in full by your employer, and there are typically not as many options to worry about when compared with other insurance. Malpractice can be separated into claims-made coverage and occurrence-based coverage. Occurrence-based is preferred, but in the event that you are offered claims-made coverage, you will need to acquire tail coverage as well. This ensures that you are covered for any suits brought against you after leaving a practice or being terminated. Be sure you know who is responsible for tail coverage in the event that you are terminated without cause or your contract is not renewed. 

Retirement Savings 

Generally, the best advice in saving for retirement is to invest early and often. Although you may be investing on your own accord, be sure to maximize the contributions offered by your employer. Your prime investing timeframe will likely be around 30 years, so take that into consideration when creating a comprehensive plan. The most common retirement plans offered by employers are the 401(k) and the 403(b). There will be a maximum amount that you can contribute to these per year, and your employer may match all or part of your contributions. It is advisable to negotiate for matched contributions, and be aware of other plan specifics in what is offered. Also find out whether you are immediately eligible to enroll in the employer’s retirement plan or you must be employed for one year first. 

Student Loan Repayment 

Physicians often rack up well over $200k in educational debt, and that is certainly daunting to pay off within a reasonable amount of time. However, about 20% of employers will offer some help in student loan repayment. With aid ranging in value from $15,000 to $30,000 per year, this benefit can be extremely helpful in ridding yourself of student debt at a quicker pace. Since so few employers offer student loan repayment in an initial offer, you may need to bring it up in conversation and negotiate for the benefit to be added in your contract. 

CME and Professional Dues 

As a physician, you will undoubtedly need to continue your medical education throughout your career, but time and funds used to travel and attend necessary courses can be hard to come by. Many employers will offer one to two weeks of paid time off and allowances of $3,000 to $5,000 for such expenditures. Often, professional dues and medical licensure fees are paid in full. Be sure to review these items in any contract you are offered and negotiate for better terms, if applicable.

Your benefits package is an extremely important part of your employment agreement and should be treated as such alongside salary, call schedule, and other negotiable terms. While increasing your salary is great, the right benefits package can save you thousands, if not tens of thousands, and provide peace of mind. Resolve has team members specifically devoted to benefits review and negotiation who regularly help physicians with all of the aforementioned items. Visit the contract review page to learn more and schedule a call!