The two ways to take your comp
Option 1: all cash. You receive base, bonus, and the benefits allowance as wages, and you handle your own health coverage, retirement, and everything else. This is the default. If you never fill out an election form, this is what you get. Option 2: elect benefits. You pick items from the practice’s benefits menu. The practice pays the provider, and the cost of what you elected comes out of your pay, allowance first, then base. Where the law allows, the deduction is taken before taxes, which is the only reason to do this. Your gross pay doesn’t change and the practice’s cost doesn’t change; the tax treatment does.Why. Two clinicians with the same caseload should cost the practice the same and be told the same numbers. Letting each person route their own comp keeps the published pay honest and gives you the tax advantage if your situation makes it worthwhile.
The menu
The menu is set annually by Helen and the practice manager and posted in the SOP library. It is expected to start small (a health premium option and a health savings account) and grow only when something is worth adding. A benefit not on the menu can’t be elected.The administration fee
Electing a benefit carries an administration fee of 10% of the gross cost of the elected benefit, or the actual pass-through fee charged by the technology or plan provider the practice uses, whichever applies. The fee is stated on the election form before you sign it. It covers plan documents, provider setup, and the bookkeeping that pre-tax elections require.What has to be true before any pre-tax election
Important. No deduction is taken from anyone’s pay until every one of these is in place. If they aren’t, the allowance is paid as cash.
- A written cafeteria plan document. Pre-tax treatment of health premiums and similar benefits requires a plan adopted under Section 125 of the Internal Revenue Code, in writing, before elections begin. The practice’s accountant or a third-party administrator prepares it. A pre-tax deduction without the document is just an unlawful deduction.
- Your written authorization. Utah law (Utah Code § 34-28-3(6)) allows deductions from wages only when required by law or court order, or when you expressly authorize them in writing. The election form is that authorization. You can revoke it in writing, effective the next plan period the rules allow.
- The salary floor. An election can never reduce a salaried clinician’s actual pay below the federal exempt-salary floor, currently $684 per week. If an election would, it is reduced until it doesn’t.
- Accountant sign-off on the fee. How the administration fee is characterized for tax purposes is confirmed by the practice’s accountant before the first election takes effect.
- Attorney review. This page and the election form are reviewed by a Utah employment attorney before the first election.
Timing
Elections are made at hire and once a year during the enrollment window the practice manager announces. Mid-year changes follow the plan’s rules for life events. The practice manager tells you the dates.What this doesn’t change
- The published pay figures, the bonus formula, and the allowance amount.
- The practice’s obligations under the health-plan-free rules: there is still no group plan, and COBRA and Utah continuation coverage still don’t apply.
- Your CE stipend, which is separate.