Embracing Flexibility in Medicine: Locum Work, Health Insurance and Retirement Planning. #442 Part 1

The other thing that you can do to help build this community is make sure you leave a comment below , Let us know what you like , what you don't like about the show and , ultimately , let us know who's winning these arguments , because I need to know that I'm beating Rene in these debates . Run the tape . Yo yo yo , yo , yo , yo yo yo yo .

What's up , everybody ? This is Dr Nii . I'm joined by Dr Renee and the rest of the Docs Outside the Box team , my superheroes . I got Audrey all the way from Kenya and I got Kiara all the way from North Kakalaka . Welcome to another episode of Docs Outside the Box . Y'all , let's jump into this because I am tired .

I'm coming in off of night shift , I'm purely running on steam and the whole night , Renee , while I'm doing my notes , I'm listening to Kendrick Lamar's GNX album , because it be like that and sometimes , when you are tired and you need some fuel , that album gets me through the night . I love that album .

I'm all about the work life balance , and I think locums would give an opportunity for just that . I just have one question , though how do you navigate the health insurance and retirement plan component ? I'm not sure if locums provides that .

If you're wondering like , locums is not until you finish residency and you are working on your own right . Once you start working on your own , then you start considering locums , right ?

There's some small caveats , but just for the sake of this convo it's when you finish , and I think what you're starting to see is a lot of people are starting to realize , hey , like this is a lifestyle that I want to think about , or this is a lifestyle that interests me .

Despite all the noise that I got to worry about with studying , with taking boards , with getting through rotations , this is just the lifestyle that I want . I have a on my service right now . I have a medical student who's applying for medical school or , excuse me , applying for residency right now .

the surgical fields , whereas trauma , critical care , it's very much like lifestyle oriented , and it's really hard when you're in , like you're very focused , and then you can step out . And he said , yeah , like I really enjoy that . I'm very interested in chatting with you about that in the future .

I was like , okay , you know , but I'm like that's another thing , that's like a fourth year medical student who's interested in that . So , yeah , good question , good question , and it's very apropos right now . Right , so we're recording this . In January , we just actually just re-upped our one-year subscription for health insurance in the state of New Jersey .

So we get our health insurance through healthcaregov or we get it through the marketplace , the Affordable care act , um , and we've been getting our insurance through there since 2017 . Um , so we go online and we fill in some information . It's really quick .

You just go to healthcaregov Alfred , if you can put that in there and when we go to healthcaregov , you go specifically to the state that you live in and you , in essence , just start shopping for a different type of healthcare insurance that you need , and it's based off of how many people you need to get covered .

So for us , our family , I have to find coverage for Renee , me as well as two kids . And you just get to shop . You literally get to look at a bronze plan . You get to look at a silver shop . You literally get to look at like a bronze plan .

You get to look at a silver plan and you get to look at a gold plan and you get to basically like just compare and contrast them between all the different companies that are selling health insurance in the state of New Jersey . You get to look at that through the website . Sometimes it can be a little bit overwhelming , but yeah , that's how we do it .

But when you do locums , when you work as an independent contractor , your health insurance is not covered . Your retirement plan like there is no such thing as that . You work and you get paid and then that's it . And then you have to take that monies and purchase those benefits that you would normally get if you were employed .

Right how did I do that , did I explain it right ?

So , as a locums , right , when you work as locums , when you get your check right from whatever hospital that you're going to be working at , you don't have taxes taken out of that check , right ?

So if you've worked before , you know that FICA comes after you , you got to make contributions Exactly , you got to make contributions to the government , medicare , medicaid , all that kind of stuff . So you know that you are going to have taxes taken out . Well , when you're locums , you're not employed by anybody but yourself , right ? You yourself are the business .

So you contract out and the hospital cuts you a check with no taxes taken out . Well , even though taxes aren't taken out , that means later on that you do have to pay taxes . So the question is well , what are you going to pay taxes on ? You don't have to pay taxes on that whole check .

What you pay taxes on is anything that you didn't use for running the business . So if you buy health insurance , health insurance is the cost of you doing business . So you're going to take a portion of that money and pay for your health insurance .

So when you pay for your health insurance , that money because it hasn't had tax taken out of it yet , that money is tax-free and you pay your health insurance with tax-free money . So that's what that means , and you know we're going to talk about this so many times over the course of the podcast .

So if you didn't get it today , don't worry , just keep listening to our episodes .

But if you go to the bottom of his article , if you pay attention to what he says in there , it says , just so you know me , working this way is cheaper for the hospital actually .

So one thing that a lot of people don't know is that when you're employed , you actually cost the hospital more money versus when you work in the locums independent contracting fashion . Do you want to explain why right now ?

You want me to , but I know that's one thing that a lot of people , that's one thing that a lot of people who I think are trying to negotiate with the hospital , they get talked out of by the hospital . They're like oh why ? don't you just come on as an employee .

And outside of the people who usually are trying to convince you , which could be like a chief medical officer or maybe a department head , like a department chairperson , who doesn't understand the numbers and doesn't understand human resources , and that's no shade , but they just don't understand that part .

You actually are cheaper when you work as an independent contractor , and the reason why is when you get your salary like your salary as an employee is not just the salary cost to pay you to work , but it also includes you needing to get disability insurance .

You need to get health insurance Like the hospital has to pay a portion of your health insurance , right . So you have to pay your own pay a portion of your health insurance as a premium , but the hospital is also covering a portion of that also right .

To get your retirement plan like they have to put money into the retirement plan to get continuous medical education , like I can go through the whole slew of things that a hospital gives you as part of its benefits . That costs the hospital money , right , but when you work as a locums , they ain't got to pay any of that stuff .

They just got to pay you to work . And when you come and work and then you get a check , you have to use your own money to purchase all those things that you would have gotten if you were an employee .

Absolutely so what I end up finding out is , for me , when you boil it down apples to apples , what really I end up seeing the hospitals really saying is is listen , as a locums , you are not predictable in terms of when you are going to work . Right , that's how it to me . I look at it , and we need predictability , right and that trumps everything .

That trumps everything . So you showing up on a month to month basis like you could just bust out and be like yo , I'm not coming in and they can't do anything about it , and that's where they're very vulnerable and I think that's the part that really drives hospitals nuts . They will say that the variable cost is variable cost of doing locums .

But the easy fix that I'm thinking about , um , if you've listened to our episodes in the past , is essentially what we did for um , this OB department , that we essentially staffed the entire call schedule , um , and I think that I think it's as easy as that , but I won't get into that today .

There was the other part of her question , josephine's question about the retirement . How do you plan for retirement ? Right ? Because usually people think , oh well , you get retirement through your job and there are lots of different ways , you know , to get retirement funds and save for retirement or invest for retirement without necessarily being employed .

So me , you're better at those explanations than I am , so I'll let you bust that out .

y'all . But like so , your company , you yourself , as a locums doc , you need the benefit of a retirement plan . Like , you have to have something that's going to help you put money away so that , when you reach a certain age , you can use that money to go and live on a boat and go wherever you want to go when you don't want to work anymore .

Right , that's the retirement plan . So you , as an independent contractor , you can purchase that , and you can purchase that through so many different places . But you basically purchase this benefit and you get access , in essence , to the ability to put money away . And when you put money away , that gets treated a certain way by the IRS .

Right , you get certain tax benefits to do that . Right , it decreases the amount of taxes that the government can tax you on right now , right ? So , yeah , like there are , and in what that does in essence , it gives you a benefit , right ? So we've done that in various ways , like when I first started doing locums 12 years ago .

Man , those numbers , the double digits now . Yeah , we getting up there , you getting up there , you getting up there , yo so why does it always come to me ? Because I men age like a fine wine . You know , I'm saying you ever notice that ? Guy . You ever notice that ladies yeah we just get better .

But when I first started , I just had like a regular , like IRA right , that's an individual retirement plan , or a SEP , right , self-employed pension plan , very simple and we did that for several years and then eventually we're like , look like we do locums for a consistent period of time . We see ourselves 10 years from now doing it .

So we upgraded our plan , which is an option right , it's almost like how , when we're looking for health insurance , like there's a bronze , there's a gold , silver and bronze the same type of thing we found something a bit more comprehensive and then we transitioned into that . But y'all that took several years and then we finally got into it .

We made mistakes and you know we , we that's how we do it now and we have money , like we even have it to the point where we were able to take a 401k loan to help , you know us purchase something , a big purchase , you know , over the last couple of years . All right , so like it's , it's for us now like we are at a mature level of ours .

But I just want y'all to know um , josephine , that is an option that is available for you . I highly encourage you . Whether you put 50 bucks away a month or however you want to put away like you can do that , and that's the best part , I think , of locums is there's a certain level of independence that you get to practice .

That I think you know people love , you know it's just like , yeah , yeah , and we're going to be .

We'll be talking about how you get malpractice insurance , the heebie-jeebies about getting doing locums right , these are the things that people worry about , right , about doing locums . How am I going to get my health insurance ? How am I going to get malpractice ? How am I going to get you know , all these different things retirement plans .

So we'll be talking about this in our course . So , if you haven't already signed up for notice about our course , I want you to go to the show notes and in the show notes you're going to see a link for a freebie .

Once you sign up for that freebie , you're going to be on the list so that when we are ready to announce that the course is accepting registrants , is accepting registrants , then you'll be notified . It's going to be limited , limited seat .

So if you're going to be interested in signing up for the course , make sure you do that as soon as we send out the notice . But that was a great question , josephine , thank you , thank you . Thank you so much , and if anybody has any other questions , you can go to the show notes and you can either text us or you can do

that . What's it called ? Is there a link there down there that says tell ?