Employee vs. Independent Contractor - When Working in Emergency Medicine

Often debated for the last twenty years, when considering a job in Emergency Medicine, is the status of whether to work as an employee or an independent contractor. For those of you not old enough to remember, this debate often goes back to numerous IRS issues resulting in many companies changing the status of their physician providers over the years. The question is what works best for the physician?

Each has its benefits and detractors. Certainly from an employee’s perspective, you have the opportunity to buy benefits (health insurance, dental insurance, life insurance and disability insurance) that are consistent with the company’s policies at group rates significantly cheaper than individual rates. In addition, 401K may or may not be provided. Lastly, taxes are automatically deducted from the payroll limiting your exposure if you are not paying your quarterly taxes on time.

With all that said the advantage of working as an independent contractor in Emergency Medicine is independence. This allows you the ability to determine where and when you will work. Your schedule is self-determined.

In addition, you are entitled to have a self-directed retirement plan (Keogh, IRA, Roth IRA, etc.) which allows you to defer greater amounts of income into your retirement years thus decreasing the tax burden at the current time.

It is often argued that benefits must be purchased on an individual basis making it much more expensive. HPP has recently developed a plan whereby group benefit rates are available to independent contractors. This levels the playing field quite a bit and will make the independent status much more attractive. Indeed, individual health insurance policies for a family can exceed $5,000-$10,000 per year, especially for those with pre-existing illnesses. Life insurance cost can likewise become very costly on independent plans. Having the opportunity for group rates for independent contractors working in Emergency Medicine is truly a game changer.