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In part 2 of this blog series, we are continuing our discussion of the benefits that are generally offered pursuant to physician employment agreements. Last week, we outlined the benefits that are typically provided to physicians, and the manner in which they might be offered. This week, we are examining each category of benefits and guiding you in terms of what questions should be asked, and what you can (or should) expect from your future employer.
Health Insurance: Because employment contracts are typically devoid of any details or particulars regarding the coverage to be provided, it is important to address this issue before executing an agreement to ensure that you and your family will be adequately covered. Employers usually can provide term sheets and/or explanation of benefits for the policies they offer.
Disability Insurance: In analyzing the disability coverage offered, it is recommended to obtain the following information: What is the definition of “disability”? Does an accident or illness qualify? How long must one be “disabled” in order for coverage to apply? Additionally, a consideration that is especially important for physicians is whether the definition of disability includes “own occupation.” Inclusion of “own occupation” in the definition can ensure that a physician will be covered if he/she is unable to perform the duties of his/her specific medical specialty.
Life Insurance: The most important questions to ask regarding life insurance offered through employment are: 1) What is the amount of coverage? and 2) Who is the designated beneficiary? Employers generally allow physician employees to designate his/her beneficiary, however, this is not always the case. For instance, when working for a private practice, a physician might be required to name the practice as the beneficiary if and when they become a shareholder/partner. In any case, make sure you know exactly who will benefit from the life insurance policy that you have been offered.
Malpractice Insurance: Professional liability insurance will almost certainly be addressed in an employment contract, and the type of coverage offered should be specified. If the malpractice coverage offered is claims-made, it is necessary to clarify whether tail coverage will be provided, and specifically, who will be responsible for obtaining and paying for the tail coverage. If the coverage offered is occurrence-based, then tail coverage is not necessary. Additionally, regardless of which type of coverage is offered, the coverage limits should be at least $1 million per occurrence/$3 million in the aggregate, and may have state-law-specified required limits. It is important to consult with an attorney to ensure your medical malpractice coverage offered is adequate and compliant with any state-specific requirements.
Vacation and PTO: This is an area of employment agreements where deciding to ask for more should be carefully considered. A physician may not want to come across as lazy or wanting to work less. Further, employers often will simply not amend these provisions, as they are typically set policies applicable to all physicians. However, it is nonetheless important for physicians to be aware of the applicable vacation/PTO policies. Employment agreements will often dictate the number of days a physician can take per year, and also might provide the relevant procedures for scheduling time off.
CME Expenses and Professional Dues: Before executing an employment agreement, it is important to clarify exactly what the employer will provide in this regard, and what expectations the physician needs to fulfill. Will you be required to maintain memberships with professional organizations, or subscribe to professional journals? How many CME events will you attend each year? CME reimbursement rates can often be negotiated, and the physician’s bargaining power is strengthened if he/she can clearly outline the expenses that will be incurred annually. The attorney agents of Lauth O’Neill can offer further guidance as to significant expenses you might incur during your first years of practice, and how to alleviate the burden of those expenses.
Retirement: A physician employee will almost certainly not have a say in the type of retirement plan offered; however, it is still important to be knowledgeable about the plan. One important consideration to keep in mind is when the physician becomes eligible for participation. Sometimes employers require that a physician be employed for a period of time (i.e. up to one year) before becoming eligible. Once you know what type of retirement plan you will be participating in, it is recommended you speak with a financial advisor to ensure you are taking full advantage of any tax savings that may be available.
Relocation Expenses: Relocation expense reimbursement is another issue that can usually be negotiated based on the reasonable and realistic needs of a physician. It is advisable to explore the available vendors and get multiple quotes. Further, physicians should consider whether they need additional funding for one or more house-hunting trips to their future hometown. The attorney agents of Lauth O’Neill can advise you as to the average reimbursement rates offered based on their experience, and give you maximum bargaining power.
Considering an employment contract and all of its implications can be incredibly daunting for a physician. In addition to the often cumbersome language and complexity, employment contracts are also intimidating because physicians have no way of knowing what is “normal” or what provisions should be included in the contract. Only an experienced physician attorney agent can adequately guide you through this process to ensure that your interests are protected. If you have questions or concerns about your employment contract, contact Lauth O’Neill to learn more about how we can help.
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