Health insurance as a practice owner

[illinigrad11]

I'm currently still in residency, but am looking at the future possibility of buying/starting a private practice and weighing the pros and cons. One of the larger overhead expenses that I'd anticipate would be health insurance, both for my family and full time employees. I'd assume one way to reduce expenses would be to have only part time office staff without provided benefits, but that could inherently lead to other issues? You obviously need to supply yourself and your family with health insurance.

Any current practice owners care to share what they do for health insurance for their family and office staff and what the typical yearly expenses are?

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[dtrack22]

The corporation pays for your health insurance, so while it is an "expense," at least it is being paid with pre-tax dollars. There are still plenty of podiatry groups that do not cover health insurance in full or at all for their associates (i was offered jobs at two such practices), I have to imagine that they do not provide any benefits to their office staff. I don't provide health insurance to staff. My family's monthly healthcare premium is $1100. The largest single expense category is payroll (and that doesn't count payroll taxes). Then there's rent, then payroll taxes, then various professional insurances, then healthcare...healthcare doesn't crack the top 3-4 expenses.

 

[NatCh]

I'd assume one way to reduce expenses would be to have only part time office staff without provided benefits, but that could inherently lead to other issues?

You might have a lot of staff turnover doing that. Most people want/need full time jobs. You don't necessarily need to provide health benefits but most people want it and they might look for another employer who does include it in their compensation.

We currently pay for employee health, dental, up to three weeks of leave per year, and a company car.

Just kidding about the company car. Our biggest expense is payroll, like dtrack22 said. Try not to have more employees than you really need.

My family's health insurance premiums are currently around $1200/month. Since we started buying our own insurance 15 years ago I estimate we've paid over $200,000. Since we're all quite healthy we've only had medical bills totaling maybe $15,000 in all that time (mostly preventative care plus two surgeries for me from when I came up short on a big double-jump while mountain biking). Insurance is evil.

Edit: maybe we've used a little more than $15K but not much. Regardless, we rarely meet our deductible so most of that was paid by us while the insurance company laughed all the way to the bank.

 

[illinigrad11]

Thanks for the reply dtrack22 and NatCh. Would you mind expanding a little on what you use/how you obtained health insurance for your family at those premium rates (12-14K/year) and NatCh, what you use for employee health coverage and what that runs you per employee? Would these numbers be wildly different state to state?

Thanks in advance!

 

[dtrack22]

Should also mention that you could have some staff with health benefits and some without. A full time office manager or billing/coding specialist (if your practice collects enough to justify keeping it in house) vs an MA or receptionist or other front office staff have different expectations in terms of compensation and benefits.

 

[NatCh]

Thanks for the reply dtrack22 and NatCh. Would you mind expanding a little on what you use/how you obtained health insurance for your family at those premium rates (12-14K/year) and NatCh, what you use for employee health coverage and what that runs you per employee? Would these numbers be wildly different state to state?

Thanks in advance!

We used an insurance broker who got quotes from multiple companies and multiple plans. She had a big multi-page chart of choices and the prices covered a broad range. We then sat down with our employees to see which plan would fit their needs best. The last time I looked at it we picked a plan with a $2000 deductible for around $500 each plus $100 for dental (but I'd have to look it up to be certain).

The premiums vary widely depending upon how much each plan's deductible and max out-of-pocket figure is. The last few years our costs increased by alarming amounts, like a 25% jump each year, but we actually saw a decrease when an older (in her 60's) employee retired a couple of years ago. I'm guessing that the costs vary from state to state too. The insurance industry probably uses some voodoo statistics to calculate how much your plans cost.