Fundamental question about a job with no benefits

[Molecularblonde]

I'm afraid that asking this question is going to make me look like a complete neophyte, but I was always told that there are no dumb questions, so here goes:

 

My husband is in emergency medicine physician. He practiced for a dozen years and we decided to move.

 

My question is this: both my previous employer and my husband's  both offered us very good benefit packages. However when we moved here, this (current) job offered us no benefits. From the research that I had done (prior to coming here) I read that at the end of the day if you don't get benefits with your the position, the employer makes up with it with an increased salary. However this just doesn't seem to be the case. Do any of you have jobs without any benefits? Why would anyone take one? My husband works for a huge national ED staffing company that employs a lot of doctors. We don't have kids, and I just don't understand how other families are affording medical, dental and eye care via individual health care plans. The only thing we get is malpractice, and while I'm not trying to look a gift horse in the mouth, I'd trade that for a retirement plan.

 

I have been looking at jobs for him on "ed physician". It is close to impossible to find a ED job *without* benefits. It seems like this job is in a clear minorty.

I'm thinking that we made a mistake in taking this job. I no longer work full time, and do not have benefits.

Any advice would be greatly appreciated.

Thank you.

[Hank]

Were you offered benefits and then the employer reneged?  Or did the two of you move across the country to new jobs without benefits and suddenly realize... no benefits?

[PhysicianOnFIRE]

I worked as a 1099 independent contractor for the first 5 years of my anesthesia career. First as a locum, then as a semi-permanent doc, remaining as a 1099 IC, though.

I paid for health insurance out of pocket (tax deductible). Paid cash for our dentist and my wife's contacts and eyeglasses (pre-Lasik). Retirement plan was a SEP-IRA (although I would now recommend solo 401(k). Employee or not, you'll want your own term life and disability insurances.

If the job sans benefits doesn't pay more than a job with benefits, it effectively pays quite a bit less. Many benefit plans have matching / profit sharing of $20,000 or more. Health and other benefits could be worth $30,000+.

[treesrock]

Your husband took a full time, ED physician position without benefits? Why wouldn't you just be a locums in that case?

As far as I am concerned, the benefits package is a huge part of all our jobs. When I clicked on your post I assumed "no benefits" meant no retirement match.

I was just job searching last year in an internal medicine subspecialty, and I never once ran across a job that offered no benefits. Basically the opposite, every job touted its benefits package. this is unheard of as a medicine subspecialist.

[The White Coat Investor]

Molecularblonde wrote:

I’m afraid that asking this question is going to make me look like a complete neophyte, but I was always told that there are no dumb questions, so here goes:

 

My husband is in emergency medicine physician. He practiced for a dozen years on the East Coast. We decided to move across the country to an island that had two hospitals that were realitively quiet, so as to avoid burnout for him. (Unfortunately, the census  of his hospital jumped up quite a bit within two years of us moving here do to a partial shut down of the secondary navy hospital).

 

My question is this: both my previous employer and my husband’s  both offered us very good benefit packages. However when we moved here, this (current) job offered us no benefits. From the research that I had done (prior to coming here) I read that at the end of the day if you don’t get benefits with your the position, the employer makes up with it with an increased salary. However this just doesn’t seem to be the case. Do any of you have jobs without any benefits? Why would anyone take one? My husband works for a huge national ED staffing company that employs a lot of doctors. We don’t have kids, and I just don’t understand how other families are affording medical, dental and eye care via individual health care plans. The only thing we get is malpractice, and while I’m not trying to look a gift horse in the mouth, I’d trade that for a retirement plan.

 

I have been looking at jobs for him on “ed physician”. It is close to impossible to find a ED job *without* benefits. It seems like this job is in a clear minorty.

I’m thinking that we made a mistake in taking this job. I no longer work full time, and do not have benefits.

Any advice would be greatly appreciated.

Thank you.

Click to expand...

I don't have any employer provided benefits because I don't have an employer. I purchase all of my own benefits myself, most of them on the open market.

Malpractice? I pay for it. Health insurance? I pay for it. Life? I pay. Disability? I pay. 401(k) match? Yea, I have it. Guess who pays for it.

It's hardly the end of the world if you're self-employed without benefits, but when you compare a job with benefits to a job without them, you've got to make appropriate adjustments to see which is the better deal.

https://www.whitecoatinvestor.com/w2-vs-self-employed/

[Craigy]

Sounds like a 1099 gig, did your husband take the job without eyes open?

Yeah, usually a 1099/contractor job pays more, since you'll have to provide your own benefits.  To some, this is even preferred, since you can pick exactly what you want, and can have access to things like a solo 401k etc.

If he took a no-benefit job that didn't pay more, the question turns to why did he take that job in the first place, were there some problems in his career, was it difficult to find a job, did this job offer other perks that made the net cut in pay worthwhile, etc.

[Dreamgiver]

I get no benefits but the hourly pay makes up for that.

[YSH]

My job offers no PTO, health insurance, FSA or HSA. I am also responsible for all my work related expenses, including med mal. Benefit of my job is the flexibility (minimal strings attached contract and ability to be free agent) and the ability to negotiate my degree of work commitment depending on my personal needs. I get paid about 17-20% more than my employed counterparts.  Also helpful is access to solo 401K and the ability to do backdoor roth.

I can probably ask for more money and would most likely get it but currently value the flexibility during this season of my life more than hourly wages in the reimbursement equation.  Once the dust settles, I do plan to ask for more pay with the understanding/ possibility of slightly more responsibility or commitment.

My partner's company offers a generous benefit package with reasonable pricing since big companies have the leverage to negotiate for better perks.  Those benefits more than fit our needs.

I think its important to consider your entire personal situation when evaluating W2 vs. IC work and not just look at the pros/cons in a vacuum.  I consider my job a very serious professional side gig of my two income partnership and treat it as such financially.  Throwing in numbers for thought- we are in the 33% tax bracket but effective tax rate is 18.5%.

 

[jhwkr542]

When evaluating a compensation package, benefits need to be considered, not just salary. If a job offered me no health, dental, or vision insurance, I would take that into account in the offer. My current job has comprehensive benefits but did consider a job that only offered a 401k and health. I considered it because my wife's job offers many benefits.

[Moomoo]

By choice I've never taken a W2 position so I've never had benefits.  I secure all my benefits through my corporation including

healthcare. (Obamacare recently required a common law employee that's not a family member so I'll have to jump through a

few more hoops for that benefit).  Additionally, I have a defined benefit plan that let's me sock away ridiculous amounts of

pre-tax dollars.  I don't make as much as I'm allowed to contribute every year but it does lower my effective tax rate to less

than 20%.  I, personally, wouldn't have it any other way.

[Molecularblonde]

 

Thank you all so much for you replies. It was difficult to write this post. With all the schooling my husband and I have between us, I'd like to think I had more of a clue when it came to this type of thing. As a (former) molecular biologist, perhaps I'm not the sharpest knife in the drawer when it comes to finances, but I try.

To answer a few questions:

My husband had an excellent standing when he left his job. He's never been sued, (touch wood!), and the only reason reason we left was because he had a very busy ED. Having no children, and very few family ties, we decided to move to a new area on an adventure. To a smaller hospital. I cut down my hours to be able to see him more. I was a molecular biologist and had a busy career too.

Hank:

We were never promised any benefits with this current position. None of his colleagues have benefits. I truly thought group health coverage would be sort of the same price as individual coverage. (Stupid). My husbans in employed by a big company that staffs hospitals with ED Physicians.

The White Coat Investor:

Thanks for your reply. I greatly appreciated it.

"It’s hardly the end of the world if you’re self-employed without benefits, but when you compare a job with benefits to a job without them, you’ve got to make appropriate adjustments to see which is the better deal"

I guess it's time to do just that. I wanted to add that I can imagine that it would be very expensive to pay for health insurance if you had a lot of children. Would you agree? Your reply has made me feel a lot better.

Physician on Fire:

Thank you for your response.

"If the job sans benefits doesn’t pay more than a job with benefits, it effectively pays quite a bit less. Many benefit plans have matching / profit sharing of $20,000 or more. Health and other benefits could be worth $30,000+."

I understand what you mean. But how do you compare what you're getting paid vs the state average? I only know how much my husband makes as a full-time employee at his place of work, hospital "x". My husband is employed by a big company, (Team Health). Should I call them and ask how his salary compares to the state average?

Craigy:

Thank you for your response. No. Both of our eyes were wide open when he took this position. Living here is less expensive than where we lived in NJ. I guess I didn't realize how loosing both our benefits at once would affect us. As I wrote above, there were *absolutely* no problems at all at his previous job. We left busy NJ for a beautiful island in the Pacific Northwest. We in single home on a bluff on the ocean. Back east we had a condo. Nothing wrong with that, but even with two great salaries things were pricey back there. And with not being able to have kids, we could move where we wanted to move to.

Dreamgiver:

Thank you for reading my post and replying. How may I find out statistics on hourly wages for ER docs?

YSH:

Thank you for your reply.

"I think its important to consider your entire personal situation when evaluating W2 vs. IC work and not just look at the pros/cons in a vacuum. I consider my job a very serious professional side gig of my two income partnership and treat it as such financially. Throwing in numbers for thought- we are in the 33% tax bracket but effective tax rate is 18.5%."

What does that mean that your effective rate is 18.5%? Could you explain that? Does that mean that you deduct the health insurance etc, off your base salary?  I know as an IC, (independent contractor) my account has allowed us to deduct some expenses such as those.

I understand that your QOL is more important that the amount of money one gets paid. Having that flexibility is key!

I was a scientist for many years in "big pharma" and had great benefits. I guess I'm just wondering why when I look at jobs for my husband, only a very few don't offer benefits...

Jhwrk542:

Thank you for your reply. I wish I had benefits (in my current part time position) to weigh against this IC status that my husband has. But I'm part time for now.

Also for what it's worth:

In his previous job, everyone got overtime pay. Right now my husband gets paid for eleven hours shifts. But he is always there for thirteen to fourteen hours. Plus, he does a few charts at home. Is this normal? I don't remember this in NJ. My husband is getting more burned out here than he was before. He often says he wishes they had PAs here. But they do not.

Can you ask your employer for a raise?

 

[jhwkr542]

You can always ask for a raise. If you're under contract, I don't think you'll have any leverage, but it's always good to voice your frustrations with people immediately above you in a constructive, well thought out way (emphasis on this last part). Honestly, it just sounds like a bad job. Looking around may be your best option. It doesn't sound like it's working (both with burnout and feeling poorly compensated).

[mamaham]

sorry to hear about your situation. i definitely feel your pain and confusion with being the non-medical spouse...  i often do not know what is "normal" or "not normal" in the medical world with regards to pay, practice dynamics, schedules, working from home, etc etc etc.  (hence, i spend time on here and on blog trying to get up to speed on these things...)

if you do end up looking for a new position, know that having your contract reviewed by a lawyer is an option.  we used contract diagnostics.  they do only physician contracts and were able to tell us what was "normal" for my husband's position for benefits, salary, malpractice insurance paid, legalize jargon etc. as they keep their own data and also compare to national database.  husband was fine with the contract but as the non-medical spouse, i felt that i needed someone else to show me data stating that we were getting a "fair" deal (and to make sure it stated the right malpractice insurance coverage). it was worth every penny to me and the lawyer we worked with answered all my many questions.  something to consider possibly for the future.

[RocDoc]

I don't know how the ER doc wages are in the Pacific NW. Here in Texas, I was practicing full time ER medicine until last year when I turned 53. It is fairly easy to make $350 to 500k as a full time independent contactor in the ER and I am board certified in FM not ER. Friends who are board certified ER are making 500k+ as independent contractors and sometimes even making $500 per hour for desperate hospitals.) I have switched to UC since I turned 53 and am only doing occasional ER shifts now and only in freestanding ERs and not the hospital anymore (too hectic in my old age.) Freestanding ERs here are usually paying $200 per hour for 12 hour shifts to board certified ER or board certified FM with ER experience (and this $200 per hour is to see 0.5 to 1 patient per hour and not usually as ill as in Hospital ER.) All my independent contractor positions pay malpractice but no benefits. I pay for my own disability and life insurance and get Health insurance from my husband's job. How do these wages compare to your husband's job?

[YSH]

Molecularblonde wrote:

 

YSH:

Thank you for your reply.

“I think its important to consider your entire personal situation when evaluating W2 vs. IC work and not just look at the pros/cons in a vacuum. I consider my job a very serious professional side gig of my two income partnership and treat it as such financially. Throwing in numbers for thought- we are in the 33% tax bracket but effective tax rate is 18.5%.”

What does that mean that your effective rate is 18.5%? Could you explain that? Does that mean that you deduct the health insurance etc, off your base salary?  I know as an IC, (independent contractor) my account has allowed us to deduct some expenses such as those.

I understand that your QOL is more important that the amount of money one gets paid. Having that flexibility is key!

I was a scientist for many years in “big pharma” and had great benefits. I guess I’m just wondering why when I look at jobs for my husband, only a very few don’t offer benefits…

 

 

Click to expand...

 

Sorry for delay response, Molecularblonde, but effective tax rate means the actual percentage of earned income you are paying to the IRS.  So while one may be in a higher tax bracket, because of deductions and tax advantage spaces, one can lower their actual taxable amount so that it lowers their effective tax rate.

For W2s, the amount and number of deductions are pretty standard.  But as an IC, you have more deductions that you can claim to essentially lower your taxable income. The most bang for the buck entity for an IC is the solo 401K, which allows you to place up to a max of 54K/year into the account and that 54K is not calculated into the amount of tax you pay for that year.

So, if you have one partner who is a w2 and one who is an IC, you get the benefits of both entities as an unit.  I am not a tax expert, so this is just my understanding and based off of my personal financial situation.