Understanding Your Employer Benefits

Today a vast majority of physicians are employed in a location in which employer sponsored benefits exist.  Meanwhile a very small percentage of physicians are in private practice with little to no help.

This is merely a function of the trend in medicine over the last 30 years while the scale has tipped in the direction of being a corporate physician versus a private practice physician. 

A majority of you will be provided (most likely free) benefits such as major medical, long term disability, life insurance ,etc.  You will also have access to an employers retirement plan, such as a 401(k), 403(b) or 457.  What do these all mean to you?  Honestly, we're not sure and here is why: employer sponsored benefits vary from employer to employer.  There are some relatively common basics across the board, but the subtleties are important to identify and not assume that the employer has your back.  It could be devastating to your overall financial plan if you assume. 

For example(s):

• Some group disability plans cover 60% of salary, while others are 67% .
• Some group disability plans have a maximum benefit of $5,000/mo and others are $15,000.
• Some employers have life insurance plans of 1x salary, while others are 3x or more .
• Some company retirement plans will match all of your personal contribution and other may only provide a small portion of them.

So what should you do?

Because this is so important, utilize the director of human resources and engage the services of an advisor.  Why both?  Because human resources can describe line for line what the employer offers.  The Financial Professional should able to explain these benefits to you in "English" and educate you as to how these benefits impact your overall financial plan, and provide solutions to fix what you want fixed.

One example: in all the years we have been working with physicians, we can only recall one or maybe two cases in which the group disability plan would fully replace the physicians income if they got sick or hurt.  In most cases, having only group could leave you with a 40% loss of income.

Whether you are part of the larger population or smaller, an advisor should be showing you what you have, where your gaps are, and offer innovative solutions on how to close them.