PracticeLink Magazine

Summer 2019

The career development quarterly for physicians of all specialties, PracticeLink Magazine provides readers with feature articles, compensation stats, helpful job search tips—as well as recruitment ads from organizations across the U.S.

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Page 30 of 83 S UMMER 2019 31 L E G A L M AT T E R S life insurance policy. Depending on your individual circumstances, you may elect to receive the employer's group life insurance policy "free of charge" and then purchase an individual policy catered to your specific needs. Professional liability insurance No physician wants to be accused in a lawsuit of not handling a patient's care appropriately. Most states and hospitals require a minimum amount of professional liability insurance. One of the key issues is making sure you know what type of coverage is provided, and confirm your responsibilities when you're no longer employed by that organization. There are two main types of professional liability insurance: claims-made and occurrence. A claims- made policy generally covers you for any negligent activity that occurs while you're employed by that organization. Upon the end of your employment, in most circumstances, a "tail" policy will need to be purchased. Assuming a tail policy is required, confirm before signing a new employment agreement whether you, your employer or some combination of both is responsible for paying for the tail policy. An occurrence policy generally covers you for any liability action regardless of whether the action is brought during or after (but within the state's statute of limitations) your employment. A tail is not required for an occurrence policy — and for that reason, an occurrence policy is typically more expensive than a claims-made policy. Physicians who are moonlighting or working second jobs should confirm whether their primary employer's professional liability coverage extends to the secondary employment setting. (In most circumstances, it will not.) Disability insurance Similar to group life insurance, physicians working for larger institutions will typically be offered group disability insurance. Unlike group life insurance, group disability insurance is an extremely complicated contract with many moving parts. There is no "one size fits all" disability insurance policy. Unlike life insurance, where a physician can essentially purchase as much as is desired, there are strict limits on the amount of disability insurance a physician can maintain. Disability insurance companies do not want physicians to be "over-insured" because there would be no incentive to return to work if you were on disability with a very generous policy. With disability coverage, there is a direct relationship between income and allowable coverage amounts. These items are important to understand when it comes to group disability insurance policies: Definition of total disability. This determines if the physician is eligible to collect on a policy should there be an adverse change in health. Elimination period. This is the number of days a physician must be out of work in order to qualify for a claim. Mental/nervous/substance/psychiatric claims. In most group insurance policies, claims that fall into this arena are limited to 24 months. Partial/residual claims. The vast majority of disability claims either start or end as a partial claim. Pre-existing conditions. The vast majority of group disability policies have a provision that states the insurer will not pay benefits due to "pre-existing" medical conditions. Taxation. Benefits received from the majority of employer-paid group disability policies are taxable. Portability. Most group policies end when employment ends and will not transfer with you to subsequent employment. Who pays. Often times, the costs associated with group long-term disability insurance are covered by the employer. The benefits and exclusions in each of a life, professional liability, and disability policy are critical to understand. A benefit offered by an employer may not be as generous as it initially seems, and you may elect or need to supplement a policy individually to ensure you have adequate coverage in place if the unforeseen or unexpected occurs. BRUCE ARMON, ESQUIRE (, is chair of the health care group at Saul Ewing Arnstein & Lehr, LLP. Jay Weinberg ( is an independent financial planner with 18 years of experience. Read more about our contributors on page 22.

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