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PA Incorporation for Locum Tenens Work


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Do any of you who work Locum Tenens under a 1099 position have an LLC or do you work only as a Sole Proprietor?

 

The tax requirements are the same but I am considering forming an LLC for my protection against any malpractice liability to protect my personal assets.

 

Of course, any Locum job I get I will ensure that the company provides malpractice coverage. But I am concerned about

extra protection in case the malpractice insurance doesn't fully cover everything in the event of a catastrophic lawsuit.

 

I've had an LLC before with a previous 1099 position and doing the taxes (I used TurboTax) was very simple to do, so I'm not worried about that.

 

I've also heard that as a medical professional, we should form a PLLC Professional Limited Liability Corporation, not an LLC. Not sure which

we should form as a P.A.

 

Any thoughts or suggestions?

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My lawyers, and it has been a few years, explained that the protection is better as PLLC, if all the  members of the company are of the same general profession "medical care" or "chiropractors" or "CPAs" VS a LLC for a diverse company with an a range of professions. He has strong feelings about it but I can't remember why without doing some research.

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If you are a contractor who works through your own LLC, and you are sued, you will personally be named in the malpractice suite....so the LLC isn't going to help you.

Now, if you have a different company, say a real estate LLC that owns significant real estate, then that MAY be protected from a catastrophic suite. 

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I recently spoke with a PA colleague here in Massachusetts who has done some locums work as a 1099, who says that in certain states it is illegal for PAs to work as a 1099 because as a PA, by definition, you are not independent and require supervision, and that the majority of the locums agencies try to push a 1099 arrangement to avoid having to pay payroll taxes, unemployment compensation, workers comp insurance, etc.  She mentioned she found this out the hard way, so now, whenever she deals with an agency for a job, she asks up front if the work is through a W2 or through a 1099, and that the majority of the agencies push for a 1099 arrangement, which she walks away from, saying she will only ever work through a W2 arrangement because of the above.  Have any of you heard of this before?  I am considering doing some locums work for the first time in the near future...

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I did locums work through an agency as a 1099. I also did locums work as an individual as a 1099. It never occurred to me to do so as other than a sole proprietor, although that's an interesting idea.

 

The tax definition of contractor versus W2 is somewhat flexibie and ambiguous and depends on many factors, such as exclusivity, whether the intention is long-term, which benefits are provided and so forth. It's not cut and dried. I believe it's primarily Federally defined, although there may be state differences.

 

Agencies take a huge cut of the money a client pays for provider services. The agency I was working for was taking over 50% of what the client was paying for me, which is why I decided to skip the agency - I could charge less for my time than an agency did, and still make the numbers work to my benefit. Personally, I like the 1099 relationship a lot and did not find it exploitive, but that's just me.

 

I would very strongly recommend finding a lawyer and running all this past her/him before making a decision. Advice here is well-meaning, but you can't evaluate any of our credibility or accuracy. *smile*

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  • 7 months later...

I recently spoke with a PA colleague here in Massachusetts who has done some locums work as a 1099, who says that in certain states it is illegal for PAs to work as a 1099 because as a PA, by definition, you are not independent and require supervision, and that the majority of the locums agencies try to push a 1099 arrangement to avoid having to pay payroll taxes, unemployment compensation, workers comp insurance, etc.  She mentioned she found this out the hard way, so now, whenever she deals with an agency for a job, she asks up front if the work is through a W2 or through a 1099, and that the majority of the agencies push for a 1099 arrangement, which she walks away from, saying she will only ever work through a W2 arrangement because of the above.  Have any of you heard of this before?  I am considering doing some locums work for the first time in the near future...

Of course this is often due to misunderstanding of "supervision."  In North Carolina I can own my own practice 100%.  I simply contract for supervision with a physician who is available for me to consult with when needed and he helps set up my scope of practice in writing.  If I can own my practice 100% I should certainly be able to subcontract under a 1099 with someone.

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