Practices hire people who know exactly how good a health plan is.
Hygienists, assistants, nurses and billing staff work inside the health care system. They compare networks, pharmacy coverage and out-of-pocket costs the way professionals do. Owners are high earners with needs of their own. A practice plan has to satisfy both.
Four things to get right.
Staff Compare Plans Closely
Clinical staff shop benefits when they change jobs. The network, dependent cost and the deductible carry more weight than the plan name, and a thin network is noticed quickly. We benchmark the plan against what nearby practices and health systems offer their staff, since those are the employers competing for the same hygienists and nurses. Pharmacy coverage gets the same scrutiny, because clinical staff can read a formulary.
Owners Need Their Own Layer
Group disability caps the monthly benefit, so physicians and dentists usually need individual own-occupation coverage on top. Owner benefits are a separate conversation from staff benefits. Own-occupation means a surgeon who can no longer operate is paid even if they could work in another role, which a group definition may not promise for long. We look at existing individual policies first, because some owners already carry coverage bought earlier in their careers.
Affiliated Practices Count Together
Practices that share ownership or services can be treated as one employer under the controlled group or affiliated service group rules, for the ACA and for plan testing. Map the structure before assuming you are under 50. Common ownership between a practice and a separate billing, imaging or management company can pull them together, and so can ownership held through family members. We ask for the ownership chart early and review it with your attorney or CPA before any decision that depends on headcount.
Small Groups Have Real Options
Most practices are small groups priced under the ACA small-group rules. Level-funded plans and HRAs are worth a look when the group is healthy or the workforce is mostly part-time. Small-group pricing does not rate on the group’s own health, so a young, healthy staff is exactly where a level-funded quote can come in lower. A Michigan group plan can also start on the first of any month.
How the practice is organized changes the math.
S Corporation Owners
More-than-2% shareholders cannot pay premiums pre-tax through the cafeteria plan, and premiums the practice pays for them are included in their W-2 wages. The rule reaches family members too: a spouse or child of a more-than-2% shareholder is treated as an owner for this purpose even if they work in the practice as staff. The shareholder can usually take the self-employed health insurance deduction personally, which your CPA should confirm.
Partnerships and LLCs
Partners generally deduct premiums as self-employed health insurance on their personal returns rather than through the practice plan’s pre-tax feature. Premiums paid for partners flow through the partnership’s books before reaching their personal returns, so the practice’s accountant needs the figures by person at year-end. Staff employed by the partnership use the plan’s pre-tax feature in the usual way; only the partners are carved out.
Classes by Role
Practices can contribute differently for providers and staff when the classes are based on bona fide job categories, subject to carrier rules and nondiscrimination testing. Typical classes are providers, clinical staff and administrative staff, each defined in the plan document and applied consistently. What does not work is a class that is really just the owner and a few favored people, which is the design testing is built to catch.
Continuation Coverage
Federal COBRA applies at 20 or more employees. Michigan has no separate state continuation law for smaller groups, which changes what departing staff can keep. The federal count is based on the prior calendar year, so a practice that grew past the threshold this year may not owe COBRA until next year, and part-time staff count as fractions of an employee.
What we look at first for a practice.
We start with where the staff actually receive care, because a practice’s employees often use the same health system the practice refers into, and a network that leaves them out is the fastest way to lose them. Then we separate owners from employees so the tax treatment and the contribution design are right before the renewal is priced.
What practices ask us.
Do affiliated practices count as one employer?
Often. Practices under common ownership, or that share services in certain ways, can be aggregated under the controlled group or affiliated service group rules. The ownership structure decides it. A combined group at 50 or more full-time employees, including equivalents, is an applicable large employer, and each practice then has its own offer and reporting duties. Getting that wrong can mean penalties for an entity that assumed it was small.
Can the practice pay more toward coverage for providers than staff?
Often yes, when the classes are based on bona fide job categories and the carrier allows it. Self-funded plans and HRAs need nondiscrimination testing first. The carrier’s participation and contribution minimums still apply to the group as a whole, so a lower staff contribution cannot push enrollment below what the carrier requires. We model the split against those minimums before it is announced.
Should our physicians or dentists buy individual disability insurance?
Usually. Group long-term disability caps the benefit, so high earners replace a much smaller share of income than they expect without an individual policy. Some practices pay the individual premium as an owner benefit, while others have the physician pay personally so any benefit arrives tax-free. A non-cancelable policy fixes the premium and terms once issued, which is why buying earlier in a career usually costs less.
We have fewer than 50 employees. What are our options?
A small-group plan priced under ACA rules, a level-funded plan if the group qualifies, or an HRA that reimburses individual coverage. The right one depends on how many staff are full-time, how healthy the group is and whether employees would rather pick their own plan. An individual coverage HRA can also be offered by class, for example to part-time staff while full-time staff stay on the group plan, though a minimum class size rule can rule that split out for a small practice.
Do we have to offer COBRA?
Federal COBRA applies once you have 20 or more employees. Michigan has no separate continuation law for smaller groups. Smaller Michigan practices usually rely on individual coverage or a spouse’s plan when an employee leaves, so plan the conversation ahead of time.
Can owners pay premiums pre-tax?
Not if they are partners or more-than-2% S corporation shareholders. Confirm the treatment with your CPA. Owner premium treatment depends on how the practice is organized, so it is worth settling with your CPA before open enrollment and before payroll is set up.
General information, not tax or legal advice. Confirm owner tax treatment with your CPA.
Send us your renewal.
We’ll tell you whether it looks competitive, where we see opportunity, and the five questions we’d put to your carrier. No cost, and no obligation to move anything.
The renewal letter
Your current plan summary
Contribution split by tier
Enrolled counts by tier
Four documents — two more if your group is 50 or more. Nothing else; every extra one is a reason to postpone.
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