Elizabeth81 Posted October 27, 2011 Share Posted October 27, 2011 I am currently an employee in the ED in southern CA, but there is a new management group coming in as of 1/1/12. All midlevels will at that point become 'independent contractors' (ie no longer receiving benefits, disability, 401K match, etc). Have to admit I am a little worried, but I have heard there are/ can be some positives.; So I just want to see what you all think. FYI- they are keeping my hourly rate the same. The docs claim that instead of bringing home say $6000 net pay (out of a gross of $10000, you would bring home the $10000, then have to file your own taxes quarterly, but also be able to deduct clothes, car, gas, computer, phone, etc)....which according to them will be a higher amount of money that stays "in your pocket" at the end of the year. Not sure if I am buying that because you have to factor in the cost of benefits- medical, dental, visual, long term disability, short term disability, accidental death, 401K with match, etc....which I would then have to pay out of pocket AND manage. What are your thoughts??? Link to comment Share on other sites More sharing options...
Moderator ventana Posted October 28, 2011 Moderator Share Posted October 28, 2011 pure BS have to pay $15k per year for health insurance 4-20% for retirement 7-10% for the taxes for the employeer portion pay for all your own PTO (figure 8-10 weeks of pay for this) No way "does it all come out equal" they are hosing you and you should organize the current mid levels and protest also you likely are not officially or legally even able to be a contractor or 1099 as you don't fit the guidelines via the IRS i would QUICKLY organize - have everyone through in $1k to hire an attorney quickly - write a letter threatening to quit en mass unless they open up negotions with the midlevels.... sounds harsh and rash but let me tell you I have seen PA's get rolled over and spit out and I think the best defense is a good offense and a unified front - individually you have no chance - together there will be some fear if they loose all their PA's..... even doing this it might be all short time if they are trying to screw you this badly.... Get the AAPA salary survey and review it and consider providing it to them as proof that they will be underpaying their midlevels... good luck - sounds ugly... Link to comment Share on other sites More sharing options...
rcdavis Posted October 28, 2011 Share Posted October 28, 2011 We have discussed this issue several times in the past. Try a subject search. Essentially you are responsible for your own bennies as an IC, PLUS the second half of the FICA ( an additional approx 7.5% of the first 105,000 that you make that you employer pays " matches" for you as an employee). The standard is that you will need to pay the Feds, state and local taxes quarterly, the year's total amount equal to or greater than that which you payed or were supposed to pay last year. At you sal level of 120k, you will need to plan on sending in about 5 weeks pay out of every 12 weeks.. Sent to the Fedsand state(s)... You will be able to deduct certain professional expenses, but travel and perform will come into play only if you have a secondary job and that job is greater that 80 miles from your primary job. The rule of thumb, and this is important, I's that your employer's cost of business to employ you is your base salary PLUS 18-23% of your salary to account for bennies ( his 7.5% FICA, health, dues, license, etc) If you are being asked to absurd theses costs without a commensurate raise in salary( hourly rate), then you are getting screwed. To keep your base salaryEQUAL, in going from employee to IC, tell them that your hourly rate should be raised from 60/hr to at least 70-75/hr.. Just to keep your bill paying capacity the same. The REAL benefit as an IC, Is the ability to set up SEP ( self directed employed plan) to which you can contribute I think up to 30 % of your base pay, tax deferred. One serious way to set aside a great amount of tax deferred retirement amount.. and the younger you are and the more you start putting away, the sooner you will be able to retire comfortably. So, If you are going to be forced into Being an IC, make sure they increase your salary to equal your ability to purchase an equal number of bennies they are providing for you, PLUS the FICA contribution. Also, the industry standard is hat they continue to pay for malpractice.. ( though you should also have your own policy, paid for by you also in effect) All this has been explained in detail.. Research the forum. And good luck Link to comment Share on other sites More sharing options...
HopefulPA Posted October 28, 2011 Share Posted October 28, 2011 Don't forget that as an independant you are responsible for all the soc security. It totals 15% an employee/employer each pay 50%. As a Independant you will have to pay 100%. Also to cover all those benefits on your own will be more expensive rates than what a larger employer group can get. So if they aren't willing to adjust your salary accordingly I would brush up that CV. Link to comment Share on other sites More sharing options...
Elizabeth81 Posted October 28, 2011 Author Share Posted October 28, 2011 I appreciate you both for taking the time to respond. I had a feeling that the responses would go in that direction. I have argued the point with the new director - who swears it will be better for me in the long run. I think it will be better for me to find another job! Link to comment Share on other sites More sharing options...
andersenpa Posted October 28, 2011 Share Posted October 28, 2011 There is no way that you benefit or break even if they leave your salary level. Agree with ventana- organize, get a lawyer and fight it out. Unless of course the practice is trying to get rid of PAs and this is their way of forcing you out. Link to comment Share on other sites More sharing options...
Dondoro88 Posted October 28, 2011 Share Posted October 28, 2011 There is no way that you benefit or break even if they leave your salary level.Agree with ventana- organize, get a lawyer and fight it out. Unless of course the practice is trying to get rid of PAs and this is their way of forcing you out. Does this happen often? (practices trying to eliminate pas?) what would the typical logic be behind this? I assumed that pas reduce costs. Link to comment Share on other sites More sharing options...
rcdavis Posted October 29, 2011 Share Posted October 29, 2011 Does this happen often? (practices trying to eliminate pas?) what would the typical logic be behind this? I assumed that pas reduce costs. PAs increase Profits more than they reduces costs. different things entirely. The cost of a PAs benefit package is pretty much the same as the cost of the MDs (with the exception of "highly compensated employees). the salary expense of the PA is less than the docs. What appears to be happening here is that the group is intending to decrease its employee costs by not having any, and maintaining the PA salary, while shifting the benefit cost to the PA. And continuing to pocket the not insignificant income derived from the PAs work product. In summary the PA profit to the group increases by decreasing fixed employee cost. But, the assumption that PA "cost " less as an employee is probably not true. That is only true when it comes to salary.. which in this case the group is trying to keep static. Link to comment Share on other sites More sharing options...
brookspa Posted October 31, 2011 Share Posted October 31, 2011 This happened to me 1 march 2011 after 7 years with my emplioyer. IC now with no bennies. got a 15 dollar /hr raiose. it helps but let me assure you that is t=does not cover the diff. 403 , health, disability , life ins, dental, ss, . and the "expenses" are not nearly so attrractive as you are being lead to believe. good luck. there is power in numbers but play it tight, you could lose. not altogether as bad thing. sometimes you need a push to go somewhere you want to see...good luck. Link to comment Share on other sites More sharing options...
andersenpa Posted October 31, 2011 Share Posted October 31, 2011 Does this happen often? (practices trying to eliminate pas?) what would the typical logic be behind this? I assumed that pas reduce costs. Not often but there are past incidents where groups dropped nonphysician providers for philosophical or marketing reasons. Goes against good financial sense but it has happened. Link to comment Share on other sites More sharing options...
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