Physician Employment Benefits – What Will Be Offered, and What Questions Should You Ask?

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When physicians consider a job offer – whether it’s with a hospital or private practice – there are important considerations to keep in mind in terms of the various benefits being offered. Having reviewed and analyzed hundreds of physician employment agreements, the attorney agents of Lauth O’Neill are well-positioned to offer some guidance on this issue.

This series of blog posts will break this issue into two separate parts. First, we will outline the benefits that are typically offered to physicians pursuant to their employment contracts. Then, in next week’s post, we will address the questions that you should be asking about the benefits you have been offered, and offer some insight as to current market norms.

These issues are critical to ensuring that you and your family’s needs are adequately covered, so make sure you stay tuned to learn more about physician benefits! And of course, if you would like the assistance of an attorney agent to review and analyze your employment agreement, contact us today.

 What benefits are typically offered?

While no two physician employment agreements are the same, and you should have independent counsel advise you on your agreement, there are some generalities as to the benefits routinely offered to physicians. Below is a breakdown of those benefits categories, and the manner in which they might be offered:

1. Insurance; Health, Disability, Life and Malpractice.
   1. Health Insurance. The specifics of health insurance coverage are almost never provided in employment contracts. Rather, contracts often will include a blanket statement along these lines: “Physician shall be eligible for health insurance coverage provided to similarly employed physicians.” Also, information concerning health insurance is sometimes included in a policy completely separate from the employment contract.
   2. Disability Insurance. Disability insurance is extremely important for physicians because your livelihood is wholly dependent on being fully functional and practicing to your utmost capability. The most commonly offered coverage is group term disability insurance (either “long term” or “short term”). Again, details concerning the coverage are almost never included in employment contracts. Instead, the contract might merely state that the “Physician will be covered on the same basis and in the same amount of coverage as provided for other physician employees.”
   3. Life Insurance. Life insurance comes in a variety of types, shapes and sizes. Once again, employment contracts will usually merely mention something along the lines of: “Life insurance will be offered to physician on the same terms as provided to other physician employees.” Life insurance offered through employment almost certainly will be “Group Term Life Insurance,” which only covers a set number of years with fixed-rate premiums. The amount of coverage varies, but generally is in the range of $250,000 - $500,000.
   4. Malpractice Insurance. Perhaps the most important insurance coverage for physicians, malpractice insurance covers acts and omissions that lead to claims being brought against the physician. Malpractice coverage will either be “claims-made” or “occurrence-based.” Claims-made coverage only covers acts and omissions for which claims are brought during the term of a physician’s employment agreement. Because claims could be brought after the physician has left that employment, it is necessary to obtain “tail coverage” or “extended reporting coverage” following the employment term. Occurrence-based coverage covers acts and omissions, regardless of when the claim is brought, so long as the incident giving rise to the claim occurred during the term of employment. No tail coverage is required with occurrence-based coverage.

2. Vacation and PTO. The amount of vacation and/or sick days that a physician may take is usually set out in the employment agreement. More often than not, allowable vacation days may not “roll over” into subsequent years. Vacation days offered may or may not include additional time that is specifically designated for attending Continuing Medical Education events.

3. CME Expenses and Professional Dues. Attending CME events can be extremely costly for physicians. Travel and lodging is often required, as well as the purchase of relevant materials. Additionally, physicians are often expected (or required) to maintain memberships with professional organizations and subscribe to professional journals. Employment agreements often provide an annual reimbursement rate to compensate physicians for these expenses. If a physician is required to become board certified in his/her specialty, the agreement also might offer additional reimbursement for the costs associated with becoming board certified.

4. Retirement. Employers offer a variety of retirement plans, including but not limited to the following types: 401k, pension, tax deferred annuity, or profit sharing plan. Employment contracts will generally merely name the type of retirement plan in place, and provide that the physician will be eligible to participate in the plan currently offered to physician employees.

5. Relocation Expenses. More and more, physicians are accepting employment positions in areas outside of where they received their training. If a physician (and his/her family) needs to relocate for a job, the employment contract will usually offer reimbursement for the moving expenses. While some employers will outline a strict process and require that the physicians use preferred vendors, almost all employers will at least require the physician to retain all receipts and documentation in order to be reimbursed. Relocation expense reimbursement can range from $5,000 -$15,000.

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