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Part time employed MD, 401(k) eligibility, and "patient contact hours"

Home Retirement Accounts Part time employed MD, 401(k) eligibility, and "patient contact hours"

  • Avatar pongbat 
    Participant
    Status: Physician
    Posts: 2
    Joined: 08/15/2019

    Hi everyone,

    Long-time reader of WCI but I’ve never posted a question on an online forum of any kind…until now. Hours of googling has not yielded an answer and I thought perhaps the collective wisdom of this community might have relevant experience here.

    Spouse is an employed pediatrician working about 16 office hours weekly. It is a foundation model and she is paid on a production basis per wRVU. Employer says she is not eligible for 401(k) due to <1,000 hours. They count only “patient contact hours” towards eligibility. However – this does NOT include the many on-call hours (pediatrics – on call is constant work) and newborn nursery rounds which would handily push her over 1,000 hours in any 12 month period.

    I think she is being unfairly made ineligible for 401(k) as she is required to work hours that are not counted towards eligibility. Your thoughts? Thanks in advance.

    #239049 Reply
    Liked by Zaphod
    Avatar jacoavlu 
    Moderator
    Status: Physician, Small Business Owner
    Posts: 2381
    Joined: 03/01/2018

    I think your thoughts are reasonable. Legally I have no opinion. Has your spouse addressed this with the employer? I would focus on the nursery rounds hours more so than on call.

    The question is going to be how far are you going to push it if they still say no. You would have to consult an attorney.

    The Finance Buff's solo 401k contribution spreadsheet: https://goo.gl/6cZKVA

    #239093 Reply
    Liked by Zaphod
    Avatar G 
    Participant
    Status: Physician, Small Business Owner
    Posts: 1799
    Joined: 01/08/2016

    Agree to focus on rounding hours. Also add in CME hours and any committees or staff meetings.
    Does she qualify for other benies like disability, health?
    Not much leverage as a part time employee. Perhaps next contract renegotiate to 1099 status or get out of nursery and anything that doesnt pay.

    #239101 Reply
    jfoxcpacfp jfoxcpacfp 
    Moderator
    Status: Financial Advisor, Accountant, Small Business Owner
    Posts: 8134
    Joined: 01/09/2016

    Welcome to the forum! This reminds me of gerrymandering in voting districts (which does happen to be legal, btw).

    She might try talking to the TPA about the situation. I wonder if not including eligible employees h cause the plan to be in default – really not worth it to disallow an employee for the cost of a measly match. If this is ok, other plans could construct their requirements to cut out many more employees.

    This d/n sound like a good place to work.

    Johanna Fox Turner, CPA, CFP, Fox Wealth Mgmt & Fox CPAs ~
    http://www.fox-cpas.com/for-doctors-only ~ [email protected]

    #239106 Reply
    Avatar Peds 
    Moderator
    Status: Physician
    Posts: 4442
    Joined: 01/08/2016
    Spouse is an employed pediatrician working about 16 office hours weekly. It is a foundation model and she is paid on a production basis per wRVU. Employer says she is not eligible for 401(k) due to <1,000 hours. They count only “patient contact hours” towards eligibility

    Click to expand…

    so she signed a contract knowing the hours worked, the eligibility, and that you wouldnt qualify for the 401k and now you want to qualify for the 401k?

     

    either work more qualified hours, renegotiate your contract, or leave.

    #239107 Reply
    Avatar jacoavlu 
    Moderator
    Status: Physician, Small Business Owner
    Posts: 2381
    Joined: 03/01/2018

    Spouse is an employed pediatrician working about 16 office hours weekly. It is a foundation model and she is paid on a production basis per wRVU. Employer says she is not eligible for 401(k) due to <1,000 hours. They count only “patient contact hours” towards eligibility

    Click to expand…

    so she signed a contract knowing the hours worked, the eligibility, and that you wouldnt qualify for the 401k and now you want to qualify for the 401k?

     

    either work more qualified hours, renegotiate your contract, or leave.

    Click to expand…

    this would only be the case if patient contact hours is defined in the contract and  work hours outside of clinic are specifically excluded. OP should clarify if this is the case.

    Or are you arguing that nursery round and call hours are clearly not patient contact hours?

    I assume the employer bills professional fees for OP spouse nursery rounds work. To then exclude this work from patient contact hours seems unfair

    The Finance Buff's solo 401k contribution spreadsheet: https://goo.gl/6cZKVA

    #239109 Reply
    Avatar Peds 
    Moderator
    Status: Physician
    Posts: 4442
    Joined: 01/08/2016

    Or are you arguing that nursery round and call hours are clearly not patient contact hours?

    Click to expand…

    im not arguing anything. i am also saying “what does your contract say?”

     

    #239115 Reply
    Avatar jacoavlu 
    Moderator
    Status: Physician, Small Business Owner
    Posts: 2381
    Joined: 03/01/2018

    agree “what does your contract say?” is a fair question

    though, if some hours specifically excluded in contract, I would question the legality of this, assuming employer bills for those services and it is an assigned or expected duty of the employee

    The Finance Buff's solo 401k contribution spreadsheet: https://goo.gl/6cZKVA

    #239119 Reply
    Avatar Peds 
    Moderator
    Status: Physician
    Posts: 4442
    Joined: 01/08/2016

    agree “what does your contract say?” is a fair question

    though, if some hours specifically excluded in contract, I would question the legality of this, assuming employer bills for those services and it is an assigned or expected duty of the employee

    Click to expand…

    yea i have no clue. but i definitely made sure i qualified when i picked up my last job and it was written somewhere.

    #239120 Reply
    Lordosis Lordosis 
    Participant
    Status: Physician
    Posts: 1860
    Joined: 02/11/2019

    Everything at my employer is based off of office patient contact hours.  They do let us claim 4 hours a week as admin time that we do not need to see patients.  I do nursery work as well but it is its own paycheck and does not count towards my office hours.  This does not mean much to me in regards to benefits since I am full time.

    I am sure she puts in more then the contact time to handle orders, labs, charts, etc.  Maybe she can negotiate some admin time to get her to the threshold.  Or she could just work another half day a week.

    She would need to be motivated to talk with her employer.  Is she?

    “Never let your sense of morals prevent you from doing what is right.”

    #239121 Reply
    Liked by jfoxcpacfp
    Avatar wideopenspaces 
    Participant
    Status: Physician
    Posts: 1138
    Joined: 01/12/2016

    I spent the last 5 years working part time, anywhere from 0.25-0.75 fte. My contract stated 28 patient contact hours was full time and I got 14% of salary into a 401a as long as I was 0.5 fte or scheduled 14 patient hours a week( I was only scheduling outpatients in my clinic). I also had access to a 403b and 457. I don’t think there were restrictions on contributions based on hours but can’t be certain.

    How long has your wife been at the job? To me this sounds like something that is negotiable. I would focus on the newborn nursery rounding, as that seems ridiculous not to include. I only took home phone call once every month or two so this wasn’t included in my patient contact hours as it only involved a couple of phone calls in the evening.

    When you work part time, you do sorta get the short end of the stick in some ways. The key is to negotiate what matters to you so you can live with the other stuff.

    #239124 Reply
    Liked by billy
    Avatar G 
    Participant
    Status: Physician, Small Business Owner
    Posts: 1799
    Joined: 01/08/2016
    When you work part time, you do sorta get the short end of the stick

    Click to expand…

    Word!

    Although it’s less of an issue when you’re FI and your BATNA is to turn in your ID badge….

    #239151 Reply
    childay childay 
    Participant
    Status: Physician
    Posts: 1013
    Joined: 01/09/2016
    I would focus on the newborn nursery rounding, as that seems ridiculous not to include.

    Click to expand…

    Agreed.  Totally ridiculous

    #239156 Reply
    Avatar pongbat 
    Participant
    Status: Physician
    Posts: 2
    Joined: 08/15/2019

    Thanks (most of you) for the helpful replies.

    Not sure if the newborn nursery rounds alone would push her >1,000 but it is worth calculating.

    I will review the contract this evening, though…

    though, if some hours specifically excluded in contract, I would question the legality of this, assuming employer bills for those services and it is an assigned or expected duty of the employee

    Click to expand…

    this is my thought exactly.

    Thanks again. Will update soon.

     

    #239212 Reply
    Avatar nephron 
    Participant
    Status: Physician
    Posts: 227
    Joined: 05/09/2019

    I’ve never written retirement plans, but my understanding is that they have rules that cannot be made to have exceptions for physicians vs non-physicians or high income earners vs non-high income earners.   The plan was probably written so that they when they hired someone part time, they could exclude them from their retirement plan because it costs them money to add people to their retirement plan.   The patient contact hours are probably the only hours that count because they are the only hours that they are actually paying her for (ie she is not receiving any compensation from the group for non-patient contact hours although she is doing work for them).   The problem is that if they cannot just add hours that they say that they are employing her and not be paying her for those hours and they cannot make exceptions for her but not the part time secretary that works a few hours a month.

    #239216 Reply

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