Benefits That Accrue?
Career Resources articles posted on NEJM CareerCenter are produced by freelance health care writers as an advertising service of the publishing division of the Massachusetts Medical Society and should not be construed as coming from the New England Journal of Medicine, nor do they represent the views of the New England Journal of Medicine or the Massachusetts Medical Society.
By Thomas Crawford, MBA, FACHE, faculty, Department of Urology, College of Medicine, and affiliate faculty, Department of Health Services Research, Management and Policy, College of Public Health and Health Professions, University of Florida, and Amy N. Tran, MPH student, College of Public Health and Health Professions, University of Florida
Fringe benefits consist of paid time off (vacation, sick time, and holidays), retirement contributions, health insurance, dental insurance, vision insurance, disability insurance, and more. Although a vast preponderance of all contracts will provide fringe benefits, did you know that physicians are generally treated differently than other groups of employees, including executives, who in some instances may have commensurate salaries? Although this employment practice is bidirectional — meaning doctors will be provided benefits that non-physicians do not generally have access to (e.g., continuing medical education allowances) — this article will focus on the benefits that may be administered differently for physicians, how to recognize some of these nuances contractually, and the importance of clear and easily interpretable benefits language within the body of the contract.
One of the primary reasons that physicians leave their current practice settings is an inability to balance their professional and personal lives. Their families often have to sacrifice time together as the physicians provide continuous care to the communities they serve. With this stated, one critical aspect to any contract or employment arrangement is time away. Vacation, sick time, holiday, and professional development time, whether allotted or accrued, should be spelled out within your contract, and you should know and have language detailing whether or not you are allowed to carry forward unused time. Also, will you be reimbursed for unused time upon separation? Are there any unwritten or unknown restrictive covenants placed upon the use of time off? For example, I worked for an institution that provided annually, by contract, five days and up to $3,000 for external continuing medical education (CME) credits/professional development. Nevertheless, there was an unwritten policy stating that the money could only be used for CME events within the continental United States, and if a physician wasn’t told this during recruitment (or if the physician didn’t remember), it was determined when the travel and time-off requests were denied (regardless if travel arrangements had been made). Additionally, do you have to use vacation time for holidays? If your vacation and sick time is pooled (a single allotment to cover vacation, sick time, and CME), you don’t want to find out that you will not have enough vacation hours for your planned time away due to 10 federal holidays being subtracted from your allotment. This is why you need to know if your time accrues and carries forward. You don’t want to take a vacation week you assumed carried forward from the previous year, only to find out that you exhausted your vacation time for the current year. Lastly, you will want to ensure that you will earn additional paid time off for tenure (common benefit of tenure for all employees and generally awarded in increments of five years). By creating granular language that ensures your vacation time, does not include federal holidays, carries forward, and accrues at an increased rate after tenure milestones, you insulate yourself against unwanted surprises after commencing employment and you’ll enhance the probability that you will be able to create a sustainable work-life balance.
In the unfortunate event that you are ill or injured for a prolonged period of time and it materially impacts your ability to fulfill the requirements of your job as outlined in all contracts, your income from your employer will cease. It is based on this premise that I always find it disappointing when contracts provide general statements about benefits without details. For those contracts that refer to employer-sponsored “disability insurance,” it does not provide the information required to know if it is short term or long term. Why does this matter? If you are only provided access to long-term disability insurance, you may have to wait between 90 to 180 days before you can start receiving the compensation benefits outlined within the specific policy. I have seen tenured physicians create a strategy, in the instances when their time away isn’t a use-it-or-lose-it scenario, of carrying forward over 90 days of vacation time to bridge the gap between their employment payments ending and disability benefit commencing. However, the amount of unused time that a physician or any employee can carry is always subject to potential policy revisions because, in some instances, the cost is carried on the balance sheet as a liability. You need to understand, on a very basic level, what benefits are being extended to you and how policy-level decisions could impact you in the future.
The ability to save tax-sheltered dollars for retirement is an integral component of planning for your life after medicine. Retirement benefits provide another opportunity to highlight and underscore the common thread that we attempt to weave through our tapestry of contracting articles. If it isn’t written down in easily comprehended terminology you cannot be certain what exactly you will be receiving. Consider the following: a fair number of contracts will provide general statements that the “physician/employee” will have access to the same benefits, including retirement, that are provided to other employees at the direction of the company, hospital, practice, etc. Unfortunately, these statements tell you little about the actual retirement benefits that you will be receiving. What type of retirement plan will you have access to? Is there an employer match? If so, is it capped? Is there a vesting period? The preceding questions are meant to highlight the level of detail you need within your contract. For example, if your retirement falls under a defined benefit plan, you need to know the vestment period, which is the amount of time you have to work for your employer to receive their contribution to your retirement. If the vestment period is five years, and you decide to leave your employer at the end of year three, you could lose the retirement contributions that you would have received from your employer (you would still be entitled to the dollars you personally invested). Based on this premise, the granular language may influence when you decide to leave versus unknowingly walking away from contributions that are triggered by tenure.
The overriding purpose of this article is not to compare and contrast the most competitive benefits packages; on the contrary, the premise is to highlight and reiterate the need to have contract language that is as detailed as possible. As it applies to benefits, most contracts make reference to receiving benefits without the detail necessary to understand what you are receiving and the potential limitations of each benefit. The benefits outlined during your recruitment should be reflected in your contract or, at the very least, a detailed benefits summary should be attached as an addendum. This will ensure that you don’t find yourself in the unfortunate position of discovering that your benefits did not accrue to your benefit.