Tail Coverage

[DrQuakerJack]

Residents and Fellows,

This may be review for you, but it is very important to understand the difference between malpractice insurance types.

There are two types of malpractice coverage - "occurence" and "claims made."

Occurrence policies cover any claim for an event that took place during the period of coverage, even if the claim itself is filed after the policy lapses.

Claims-made covers you as long as the coverage is active, but if you move jobs and your new employer has a different malpractice insurance, tail coverage will need to be purchased. It is usually 1.5 to 2 times the cost of annual policy. In ophthalmology, an annual policy through OMIC is usually around $5000.

Here's the kicker...Many practices use claims-made but when the associate leaves, they will require the associate to purchase tail coverage. This ends up being a $8-10k expense. PLEASE make sure you negotiate this out of your contract. If you are a W2 employee, you should not be paying for your costs required to work. This includes license fees, CME, and board certification. If you are a 1099 employee, it would be reasonable for you to cover these things. It is predatory to new associates who do not know and it should not happen.

If you are a practice owner, do the right thing and remove this from your contracts.

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[MstaKing10]

My insurance while a fellow also required tail coverage when I graduated. This was even worse as my net worth post fellowship was way negative and my first paycheck needed to be split many ways. Good question to ask your fellowship and something to either negotiate or more realistically be prepared for.

Great point and thanks for posting

 

[LightBox]

If you are a practice owner, do the right thing and remove this from your contracts.

Haha, good luck with that. Most practices have tail coverage being covered by the departing physician as a standard part of their contracts. Perhaps one can negotiate a 50/50 split to cover the tail, but most practices will not cover the full amount.

 

[dantt]

Haha, good luck with that. Most practices have tail coverage being covered by the departing physician as a standard part of their contracts. Perhaps one can negotiate a 50/50 split to cover the tail, but most practices will not cover the full amount.

Depends on what you negotiate. Seeing how most jobs do not work out, I would not advise accepting a position where you may be on the hook for an extra 10k (would be pretax for employer, post tax for you) if/when thing sour. There is a shortage of ophthalmologists in most locales and it will become worse. There are plenty of great jobs out there that pay tail or otherwise have occurrence policies.

 

[MstaKing10]

This really isn't a make or break though. But sure, negotiate it if you can. There are much bigger issues to be concerned about when looking for a good job

 

[LightBox]

Depends on what you negotiate. Seeing how most jobs do not work out, I would not advise accepting a position where you may be on the hook for an extra 10k (would be pretax for employer, post tax for you) if/when thing sour. There is a shortage of ophthalmologists in most locales and it will become worse. There are plenty of great jobs out there that pay tail or otherwise have occurrence policies.

10k is nothing in the grand scheme of things.

 

[dantt]

10k is nothing in the grand scheme of things.

My understanding is it is closer to 20k and post tax to the employee as opposed to pre tax to the employer due to no business to deduct the expense from. Its a huge amount to a newly graduated doc in debt...nothing to a large corporation. In any case, plenty of great gigs out there with good benefits that include tail/occurrence.

 

[guytakingboards]

This really isn't a make or break though. But sure, negotiate it if you can. There are much bigger issues to be concerned about when looking for a good job

10k is nothing in the grand scheme of things.

This.

My understanding is it is closer to 20k and post tax to the employee as opposed to pre tax to the employer due to no business to deduct the expense from. Its a huge amount to a newly graduated doc in debt...nothing to a large corporation. In any case, plenty of great gigs out there with good benefits that include tail/occurrence.

Wishful thinking in my opinion. If you can negotiate it out, great. But i wouldn't turn down a job on the possibilty i had to pay tail insurance. This is changing in the radiology job market. My group is going to a vested model. Stay less than 1 year, you pay 100% of tail. Stay 1-2 years, you pay 50% tail coverage. Stay longer than two years and the group pays 100% of the tail coverage.

 

[2brads]

I actually negotiated tail AFTER I told my last group I was leaving. I implied I would go peacefully if they covered it and make a giant ruckus (potentially scaring off new recruits) if they didn’t.