Have you thought about using your degree as a physician assistant in a model that offers you more flexibility and greater independence? There are a number of unique benefits to working as an independent contractor (IC) you may not have considered.
PAs who function as an IC have more choices than those who work under contract to a medical practice. As an IC you may work a full or part-time contract position with one practice and choose to work shifts in another.
Or, you may choose to work a full schedule as an IC for different companies. An IC position offers control of your schedule, ability to grow a strong professional network and it never gets boring.
A second option is to work as locum tenens, or a PA who temporarily takes on the duties of another. An example of this would be locums covering for a PA on maternity leave. Locum positions may pay for travel, housing, and rental cars while you’re working.
Some PAs choose to take a working vacation as a locum at a vacation destination or as a way to see the country. Some may choose to spend 3 months each winter in California, working emergency room shifts, to escape the cold of the northeast.
What Is an Independent Contractor?
As an IC, you practice in a self-employed capacity. This means the financial end of employment is now your responsibility. An employee fills out a W-4 form so an employer may report financial information. An IC fills out a W-9 form. The employer may then send financial information and issue a 1099-MISC.
Consult with a tax advisor to explore additional advantages not available to employees. They will help you consider deductions, including: scrubs, gas for transportation to and from work, malpractice or liability insurance, and home office equipment you may need.
Benefits of Being a Physician Assistant Independent Contractor
In addition to tax benefits as an IC, you may also enjoy a few more advantages. With no legal connection to the practice or facility, other than providing services, you may enjoy:
Flexible Schedules
Independent contractors set their schedules and work hours. A practice will request time-based on their needs. You have the option to cover the time or not. It is important to remember if you frequently do not fill the request, they may choose to work with a different PA.
Part-Time Work
Working part-time hours may give you the opportunity to make a full-time salary. This may be an advantage if you are caring for children or aging parents, or returning to school.
Higher Earnings
Independent contractors are paid more since the employer is not paying overhead associated with employees. This includes taxes, health insurance, and benefits.
Diverse Practice Environment
Working as an IC gives you the opportunity to work in a variety of settings and care for diverse patient populations. Practicing in different settings is an energizing way of keeping boredom at bay. Or you may enjoy choosing the days you work each week. For instance, providing care at an assisted care facility means you may be able to flex your schedule to your family’s needs.
Retirement Savings
Most employer retirement plans have limited contributions, and employees are limited by the IRS. As an IC it is easy to set up a SEP-IRA with a much higher ceiling. This allows you to take advantage of a higher salary and reduce the taxable amount by contributing to your retirement account.
Drawbacks of Being an Independent Contractor as a PA
While there are a few drawbacks, none of them create enough of an obstacle to stop many from practicing as an IC.
Billing
The practice will bill their patients, and then you will bill the practice for your service. This means you’ll need to keep accurate and detailed records for each place you work throughout the year.
Decision Making
Most practices don’t ask an IC’s opinion on how to run the practice. The length of your patient visits, medical equipment purchases, and scheduling may affect your work and how much you make. However, you may not be asked for your input.
Statutory Protections
An IC doesn’t have the same protections under the law that an employee has. These protections include due process in cases of disagreement with the practice and overtime requirements.
No Benefits
You’ll receive a higher salary to offset the benefits you’ll be missing. These include health, disability, life and malpractice insurance, paid vacations, and sick time.
What PAs Need to Be Aware of As an Independent Contractor
There are several things you need to be aware of when you practice as a 1099 contractor rather than a W-2 employee.
Malpractice Insurance
PA’s need medical malpractice insurance to provide financial protection from liability that may jeopardize your reputation and license. This includes any malpractice claims made by patients. You may get a quote online from CM&F group recommended by the American Academy of PAs.
Cost of malpractice insurance depends on the state where you practice, the number of hours and your specialty. According to Cunningham Group, you may expect it to fall within a range of $3,000 to $5,000 per year.
Filing Taxes
You’ll find there are differences filing taxes as a 1099 contractor or W-2 employee. The IRS considers contractors to be self-employed. This means you’ll have self-employed income tax obligations, including social security and Medicare taxes, different from those who are employed.
The IRS explains the self-employment requirements and has an easy way to pay quarterly tax payments online. The Treasury Department has specific rules about how an IC is classified. In some cases, medical practices will request you are incorporated to ensure they are not fined. It is best to work with a tax advisor to cover your own liability as well.
Health Insurance
You won’t have health insurance, so it will be necessary to purchase coverage and supply your own benefits, either independently or within the Affordable Act Marketplace.
Other Benefits
When you work for a medical practice, an employee benefits package may also include:
Dental and Disability Insurance
As an IC you can make the decision to purchase dental or disability insurance to meet your individual needs.
Dental insurance is available from several private companies and in the Marketplace. However, in the Marketplace it is only available if you pair it with a health insurance plan.
Before you decide to purchase disability insurance, understand the differences in what is covered between long and short-term policies and how this may impact your personal situation.
Additional Perks
When hired by a company, many PAs are offered additional perks in their benefit package that become out-of-pocket expenses for ICs. As you consider your options, remember these perks may be offered to a W-2 employee:
- Continuing education funds
- Paid vacation
- Sick leave
- Life insurance
- Reimbursement for license and professional dues
- Reimbursement for additional certifications
- Short- and/or long-term disability
- Student loan repayment
- Relocation packages
- Sabbatical leave
- Prepaid legal services
- Wellness programs
- Discounts at local businesses
Final Thoughts
Ultimately, the decision to practice as an independent contractor is yours. For many, the benefits outweigh the disadvantages.
Flexibility, variety, tax write-offs, and a higher earning potential may be more than enough to entice you to try practicing as a physician assistant independent contractor. Contact LinkPAs today for expert help at finding your next position.
