A benefits package can be an important piece of the puzzle when evaluating job opportunities. For physicians, the type of employer can have a huge impact on what is provided. For example, it is not unusual for private medical practices to provide very little in the way of traditional benefits. As a partner or shareholder, you operate more as an entrepreneur and must pay your own way when it comes to most benefits. Large hospitals and university hospitals often provide a more robust benefits package, but you practice medicine as an employee. Private equity groups sometimes land more in the middle.
Whether you must choose your own benefits, or they are provided to you by your employer, these are the most common benefits physicians should be looking for:
Personal Time Off (PTO): Two to three weeks per year is common. Important questions to ask are whether sick days and time off for continuing medical education (CME) are included in your PTO or if they fall into a separate category of time off.
CME Reimbursement Amount: Typically, reimbursement amounts range from $2,500 – $3,500. Make sure to verify what items are reimbursable as many employer policies have caps on airfare and hotel expenses.
Health Insurance Plans: Premiums, copays, and coinsurance are important, but be sure to pay special attention to the deductible and out-of-pocket maximums.
Dental Insurance: Most dental plans are standard in terms of deductibles, copays, and coinsurance. Pay attention to the annual maximum benefit. These typically range from $500 – $2,000. This is the maximum amount the plan will pay for dental work within a calendar year.
Vision Insurance: Most plans have relatively low copays for eye exams in the $10-$20 range and provide allowances in the $130 – $150 range for eyeglass frames and contacts. Lenses and medically necessary contacts are often covered in full.
Flexible Spending Account (FSA): There are typically two types of FSAs; a healthcare FSA and a dependent care FSA. These accounts allow you to contribute pre-tax money and spend that money on qualified expenses on a pre-tax basis. The maximum you can contribute to a healthcare FSA in 2021 is $2,750, and the maximum you can contribute to a dependent care FSA is $5,000. Use caution with these accounts as most are use-it-or-lose-it, meaning any money remaining in the account at the end of the calendar year is forfeited back to the plan.
Long-Term Disability (LTD): Employer provided monthly benefit amounts can vary. We recommend a physician have at least 60% of their pre-disability monthly income covered by an LTD policy. If the employer provided plan is insufficient, then a physician should acquire a supplemental disability policy to make up the difference.
Life Insurance: It is common for employers to provide coverage equal to 1 to 2 times a physician’s salary. Some may limit coverage to $50,000, but that is done for your own tax purposes.
401(k)/403(b): These common retirement plans allow for tax-advantaged retirement saving and investing. In 2021, an employee can contribute $19,500 of their own money to the plan on a pre-tax (and sometimes Roth) basis. Employers often contribute by making a guaranteed 3% safe harbor contribution, matching a percentage of employee contributions, or a mixture of both. Employers may also make discretionary contributions.
Other Retirement Plans: While less common, you may also have available a 401(a), pension plan, and/or 457.
Other Benefits: Some additional benefits you may have at your disposal are a Health Savings Account (HSA), Short-Term Disability, Accidental Death & Dismemberment Insurance, Adoption Assistance, Tuition Reimbursements, Wellness Programs, and discounts on certain services.
Jeff Witz, CFP® welcomes readers’ questions. He can be reached at 800-883-8555 or at email@example.com.
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