• Chuck Hulse

Cash Balance

Randy passed the Certified Medical Practice Executive (CMPE) exam this year and another of our administrators, Jared, sat for the exam last week. The exam indeed tests your breath of knowledge requiring that you are staying current on reading everything related to operating medical groups. Yet there are a few things when dealing with physicians that seem to be as important today as they were a “few” years ago when I sat for the exam. And particularly relevant to MedMan. MedMan has a preponderance of specialty practices, characterized by high earning physicians, so some things – specifically three things - are of particular interest.

I hired an orthopedic surgeon - young, full of energy – a rugby player. He invited me to a Saturday game. A teammate broke his arm during the game, and a few others limped off to have a beer in the end zone following the game. My guy was bloody and proud. I laughed and told him I hope his disability insurance premiums were current. Right… he didn’t have any. So, we had a chat… and discussed the differences between group and individual coverage, policy differences in the definition of disability, integration clauses, elimination periods and such. As important today as ever.

There was a time when an OBGYN was paying $80,000 a year in professional liability insurance. It was a good thing, because it caused the industry to get creative, and Claims Made Insurance was born. It is rare to see Occurrence type policies, yet it is important to know the differences, particularly the nuances of the Claims Made type coverage which gave rise to nose coverage, prior acts coverage and tail coverage. Coverage limits also evolved – stacked coverage, staff coverage, and corporate coverage are terms to be understood.

Defined Benefit Pension Plans have[CH1] all but been replaced by 401(k) plans. And I am hearing about a new twist - a hybrid type plan - that can change how high earning physicians can maximize retirement savings through a Cash Balance Plan.

No matter your industry - keep reading, keep networking…stay current so that you can be relevant and helpful to your group.

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