Practices
Owning a practice presents a wide range of risks that could impact your ability to recruit employees during good times and help retain them in the event of an accident or illness that could threaten the viability of your organization.
Taking the time to address these risks before they occur can reduce the impact an unexpected event will have on your ability to meet your personal and professional obligations, ensure you have a business to return to or improve its value position if new ownership is needed.
Employer Provided Group Benefits
Group Long-Term Disability
Insuring the incomes of professional staff and administrative employees is a vital component of any benefit package for practices of all sizes. These group LTD policies either can be provided by the practice to all full-time employees without having to worry about being denied due to current or pre-existing medical conditions.
The terms of coverage available in today’s market will vary greatly and its important to evaluate how these contracts protect one’s ability to perform their own specialty, if it protects more than basic monthly earnings, if the maximum monthly benefit limit doesn’t insure enough the income traditionally earned by healthcare professionals.
Group Short-Term Disability
Providing an ongoing source of income to professional staff and employees is a vital component of a practice’s benefits package. Through these group policies full time employees can receive a percentage of their income to fill in the gap for employees having to wait for their long term disability benefits or during an event that should resolve in a few weeks of months.
These policies are provided without having to satisfy medical underwriting requirements and the percentage of income replacement, maximum weekly benefit, duration of benefits and how soon they are provided can be tailored to meet the income replacement needs of the employees and professional staff.
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Supplemental and Voluntary Opportunities
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Healthcare professionals and employees are likely to incorrectly assume that the money being contributed into their qualified retirement plan can continue during a long-term disability. When a disability occurs all employee and employer contributions must cease (due to IRS regulations), and this could substantially reduce the disabled employee’s or partner’s retirement account when they reach normal retirement age.
This threat to one’s financial well-being can be addressed by individual disability insurance contracts offered by several insurance companies that have been designed to match either current contribution amounts or a percentage of annual income.
These contracts can be provided as part of the organization’s benefit package or offered on a voluntary basis.
Business Insurance
One of the greatest threats to the ongoing viability of a practice is the inability to meet immediate and short-term business expenses. This threat is especially significant for small to medium practices that rely on the revenue generated by a small number of practitioners.
Individual disability insurance contracts that have been created to address this specific risk can provide an ongoing source or revenue to keep the doors open, meet payroll and ongoing expenses and even secure additional money to cover the cost of a locum tenum.
These policies can provide money after little as 30 days that can continue for up to eighteen months. The premiums for this coverage are tax deductible and will not rose once the policy is issued.
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Too often, an accident or illness will make it impossible for a partner of a practice to return to work. When this proves to be the case it’s imperative that a funding mechanism is in place to provide the disabled partner and his family the money they would expect. This need can be funded by individual long term disability contracts and help the remaining partners avoid having to deplete personal or professional savings.
These contacts can provide benefits after a disability continue for a specified period of time and are available for practices with as many as ten partners.
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