Medical and dental practices: how to design benefits for physicians, clinical staff and front office teams.
Why practices have two or three different employee groups, how owner physicians fit into the plan, how to keep clinical staff and how a practice that treats patients can avoid conflicts when its own staff use its services. Written for the practice owner or administrator.
Physicians, Clinical Staff and Front Office
A practice usually has distinct groups with different needs.
Owners and Employed Physicians
Owners, partners and employed physicians may differ in pay, taxes and what benefits matter to them. Ask each group what they value before building the package, since a partner may weigh tax treatment while an employed physician looks at coverage and time off. Review the design with a tax adviser before open enrollment. Our free dental benefit maximum calculator turns this into dollars for your plan. For the owner-side tax rules, see partners and LLC members and S corporation shareholders.
Clinical Staff
Nurses, technicians and assistants are in demand, so benefits help recruiting and retention. Compare your contribution and benefit options against what nearby employers and hospitals offer to similar roles. Ask departing staff what mattered to them, and use that feedback when reviewing the plan at renewal.
Front Office and Billing
Administrative staff often value cost and simplicity over richer coverage. Offer a lower-cost plan option alongside a richer one, and show the per-paycheck cost of each in plain terms. A simple enrollment process and clear explanations matter as much as the plan menu for this group.
How Owner Physicians Fit the Plan
Ownership structure affects who can be on the group plan and how premiums are taxed.
Partners and Shareholders
Partners in a partnership and some S corporation shareholders are treated differently from W-2 employees. Tax treatment and eligibility can differ depending on the entity type and each owner’s role, so do not assume they are covered like other staff. Confirm the approach with a tax adviser before enrolling owners or reporting premiums.
Contribution Classes
A practice can define classes, such as physicians and staff, with different contributions, if the plan document says so. Define the classes by job category in writing, and apply the contribution rules the same way to everyone inside a class. Have your adviser and counsel confirm the setup works with the plan document and the carrier’s rules.
Test the Design
Self-funded and cafeteria features can trigger nondiscrimination tests that matter when owners are the highest paid. Ask your adviser whether any testing applies to the design you are considering, and review results before the plan year begins. Waiting until after owners have enrolled can leave limited options for fixing a failed test.
When Your Staff Are Also Your Patients
Employees of a practice often use the practice, or competing ones.
Network Participation
Check whether the practice participates in the networks it offers, and how its own claims are handled. Practices can create awkward situations when the group’s own providers treat staff members as patients. Confirm how claims are billed and paid, and have counsel and the carrier review any special arrangement for in-house services.
Privacy Between Colleagues
Staff who are patients need assurance that coworkers cannot see their records without need. Set clear access rules for who may view patient records, and train staff to follow them for their own families and coworkers too. Ask counsel how privacy rules apply to employee health plan information versus patient records.
Avoid Steering
Employer plan design should not appear to push staff toward or away from specific providers. This matters most where the practice’s own staff are also its patients, or where employees might feel pressure about where to receive care. Keep network and benefit design neutral, document the reasons for plan decisions and ask counsel to review any arrangement that could look like a preference.
Competing With Hospitals and Large Groups
Practices compete for staff with systems that offer large benefit programs.
Total Compensation
Show the full value of health, disability and time off, and not just salary. Prepare a simple statement for each employee that lists salary, the employer share of premiums and other benefits. Update it each year, and note that figures are illustrations, so staff can compare the whole package when weighing an offer.
Flexible Schedules
Schedule flexibility is inexpensive and valued by clinical staff. Options such as compressed weeks, shared shifts or set days off can cost little but make a difference for clinicians with family duties. Document the rules clearly so scheduling stays fair and does not strain coverage.
Voluntary and Supplemental
Employee-paid supplemental benefits broaden the package at no employer cost. Employees pay the premium, but the practice still handles enrollment, payroll deductions and communication. Review each product’s design and claims process, and offer only those that staff will understand and could use.
Adding Providers and Locations
Practices grow by adding providers and sites.
Onboarding New Physicians
Offer clear information about benefits during recruitment, including waiting periods. Give candidates a summary of coverage, costs, effective dates and any group-specific rules before they sign. Clear information early avoids the frustration of a physician starting without coverage because of a waiting period they never knew about.
Multiple Locations
Several offices under one entity can share a plan if the carrier setup names each location. Confirm the carrier setup lists every site, and check that provider networks and eligibility rules work in each area. Adding an office without updating the carrier can cause enrollment and billing problems for staff there.
Acquisitions and Mergers
A practice that buys another needs to review benefits and the combined headcount. Compare eligibility rules, waiting periods, contributions and renewal dates for both practices. Ask your adviser how the combined group may be treated for ACA and other purposes, and plan the transition before the deal closes.
The questions that come from healthcare practices.
Six questions practice owners bring us about benefits.
Can owners be on the group plan?
Often yes if they are also W-2 employees. Partners and some shareholders have different rules.
Can we give physicians a richer contribution?
Yes, if the plan defines classes and the design passes any required tests.
How do we protect staff privacy?
Keep plan information separate from employment records and limit who sees claims data.
Do we need to be in the network we offer?
Not necessarily, but check how your own claims and referrals are handled.
What do clinical staff want?
Competitive coverage, income protection and schedule flexibility.
Where should we start?
Define your employee classes and contribution rules in writing.
Ready? Send us your renewal, or talk it through with someone first. No cost, no obligation.
General information for healthcare practices, not legal advice. Owner compensation and plan status are fact-specific, so confirm yours with counsel and your tax adviser.
Related guides.
Schools, Child Care and Education Employers
School-year contracts, part-time aides and summer coverage.
Medical and Dental Practice Employee Benefits
Benefits for healthcare practices.
Owner and S Corporation Coverage
How owners fit into group plans.
Mergers and Acquisitions Benefits
Benefits when practices combine.
Where the Rules Come From.
The laws and rules named on this page link to the statute or regulation they come from. This is general information, not legal or tax advice, and rules change, so check the current text.
Affordable Care Act (Public Law 111-148)
The 2010 health reform law, with later amendments, behind employer coverage, reporting and market rules.
HIPAA Privacy Rule (45 CFR Part 164)
Federal privacy and security standards for protected health information held by health plans.
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The renewal letter
Your current plan summary
Contribution split by tier
Enrolled counts by tier
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