Part-time position, SP does not cover malpractice?

[Cleverisallxx]

Hi all,

Hope someone can give me a little advice. I recently applied for a part-time position at a local clinic and verbally accepted an offer of $65 an hour for 16-20 hrs a week. I could have sworn the SP said he would cover malpractice, but then later received an email from him asking for my malpractice insurance, and had to reply back saying I did not have my own, and am currently covered by the SP at current position.

He then told me that he spoke to his office manager, and that they would not be able to offer me malpractice since I would be working as a "contractor" and not a W2 employee... what does that even mean? A quote from cm&f group shows me at $2k a year for occurrence coverage (which I'm not 100% convinced I need but at the same time like the idea of being covered just in case...). Is this reasonable? What does it mean to be a non-W2 employee?

 I'm used to having everything taken care of at big hospitals and even the little clinic I worked for before, but I really like the dynamic at this office and the hours are suitable for my needs at this time. I just don't want to be taken advantage of. I should also mention I am not receiving any other benefits either, but I don't need them at this time. 

[EMEDPA]

I am a full time 1099 contracted employee. My malpractice is covered by the hospital(and nothing else).

Personally, I would never take a good that did not cover malpractice.

if it is worth it to you to pay 30 hrs of income/yr into malpractice then you can stay. if not, get out.

[MT2PA]

Take a minute to google independent contractor vs W2 employee.  Sounds like you need to get some information straight before you consider this job.

Being a contractor means they just pay you an hourly wage - they do not cover any of your required SS payments - which means you'll have a big tax surprise if you don't sort this out prior to starting. (Whereas a big hospital pays half of what you owe...you know, all those deductions from your paycheck).

As above, you're not being fleeced but you do have to decide if it's worth it to pay your own malpractice.  And yes, you NEED to be covered.  Your FT employer very likely only covers the work you do for them.

Edited August 25, 2019 by MT2PA

[GetMeOuttaThisMess]

You can't make a wise decision without understanding all the details.  Aside from malpractice (which you could itemize, assuming that you would have enough deductions to be greater than your standard tax deduction), as noted above, you are required to initially pay both portions of the employment tax (employee and employer) which is currently 15.3% at least quarterly to the IRS.  This means you are responsible for determining the tax amount owed (not hard if you can crunch numbers).  At the end of the year you get a tax credit for half of the 15.3% just like you would if you were the employer.  What does this mean?  It means that right off the bat your actual rate is $55.06/hr.  Subtract your malpractice insurance ($2K/number hrs.worked per year) and you take home even less.  Now, how is that offer looking to you?

Oh, and BTW, unless you have COMPLETE control over your days/hours worked you do NOT meet the IRS criteria for a 1099 employee.

Edited August 25, 2019 by GetMeOuttaThisMess

[Cleverisallxx]

On 8/25/2019 at 3:14 PM, GetMeOuttaThisMess said:

You can't make a wise decision without understanding all the details.  Aside from malpractice (which you could itemize, assuming that you would have enough deductions to be greater than your standard tax deduction), as noted above, you are required to initially pay both portions of the employment tax (employee and employer) which is currently 15.3% at least quarterly to the IRS.  This means you are responsible for determining the tax amount owed (not hard if you can crunch numbers).  At the end of the year you get a tax credit for half of the 15.3% just like you would if you were the employer.  What does this mean?  It means that right off the bat your actual rate is $55.06/hr.  Subtract your malpractice insurance ($2K/number hrs.worked per year) and you take home even less.  Now, how is that offer looking to you?

Oh, and BTW, unless you have COMPLETE control over your days/hours worked you do NOT meet the IRS criteria for a 1099 employee.

Thanks so much for the breakdown. Looks like I've gotta take off the rose-colored glasses. This offer definitely isn't what I thought it was going to be. But if I'm understanding correctly, the tax credit offered at the end of the year would make it equal to what hospitals typically put in for you anyway, right? So it should balance out?

He told me we could discuss switching to w2 employment in 3-6 months but was pretty vague about it.

[GetMeOuttaThisMess]

Employer/employee each contribute 7.65%. As a 1099 employee your paying both ends up front and taking the 7.65% at tax time off the pre-tax income.

[Cideous]

On ‎8‎/‎25‎/‎2019 at 2:14 PM, GetMeOuttaThisMess said:

 What does this mean?  It means that right off the bat your actual rate is $55.06/hr.  Subtract your malpractice insurance ($2K/number hrs.worked per year) and you take home even less.  Now, how is that offer looking to you?

Oh, and BTW, unless you have COMPLETE control over your days/hours worked you do NOT meet the IRS criteria for a 1099 employee.

Thank you for doing the math for her, I was literally getting ready to punch it in when I saw you did it.  It's job offers like this that really bother me.  For that doc to negotiate this with her knowing full well she has no idea what she was getting herself into is really maddening. 

Having said that, you MUST become an expert on all things W2 vs 1099, state license requirements and lastly on Malpractice coverage (occurrence vs claims made, individual policy vs group policies etc.).  I tell younger PA's that no one is going to look out for you in this job market.  You are on your own and no one will protect your license like you.  Finding out that you dont meet the criteria to be a 1099 (independent contractor) worker, or that you didn't know you had to pay your taxes quarterly...After the fact...Can be a hair raising and very expensive revelation. 

Good luck