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What Benefits Should Go In a Physician Assistant Offer Letter? | PA Letter

What benefits should be in an offer letter for a physician assistant? First, let’s start with what is an offer letter? Sometimes it goes by different names: offer letter, letter of intent, intent to negotiate. That goes on from there, but an offer letter starts the process for your employment and for your employment agreement. Normally, in an offer letter, it’s going to be short and sort of like an outline of what they’re offering you in their employment agreement. Normally, in an offer letter, you’re going to first get your compensation. Normally, your base compensation, and then there may be additional bonuses for production or collections. And that should also be included in the offer letter.

Benefits Included in an Offer Letter

Then any additional bonuses, perhaps signing bonus, relocation bonus, relocation expenses should also be included in the offer letter. And then going down from there, normally, what sort of benefits are you going to get? Are you going to get health insurance, life insurance, long-term disability, short-term disability, or 401k? Like those sorts of benefits. They’re probably not going to go into a lot of detail about how much coverage you’re going to receive or what your premiums are going to be. But it will be outlined in there that that is something that they’re going to offer you for your employment. And then going down the list, PTO time. You should know how much time off you’re going to be receiving. Sometimes this is calculated in hours, days, or weeks. It just depends on your schedule.

And then also, the employment offer should be a sort of rough schedule. Especially in an offer letter, they’re not going to get too detailed on your schedule. Maybe how many hours you’re going to be providing, what sort of setting you are going to be assisting in the OR, clinic, hospital, something like that. And then also your location, where are you going to be providing those services? For how long? So, you’re just going to have a rough view of your schedule or your day-to-day. Also, your duties. What services are you providing if you are assisting a PCP or surgeon? Something like that. It should have information in there on what type of specialty you’re going to be providing your services for. And then going down the list, also continuing medical education, your CME. You’re typically given an allowance which is anywhere between 3.000 to 5,000. Other topics of interest include:

  • What Physician Assistant Expenses Should an Employer Pay For?
  • Does a Physician Assistant Have to Repay a Bonus if they Terminate the Contract?

That also should be in your offer letter. And then also if you get any additional PTO time to fulfill your CME requirements. So, those are the basics. Again, I’ll just summarize: your compensation, your base compensation, any bonuses above that base, and then any type of signing bonus, relocation bonus. Then you’re going to also look for your benefits like your health insurance, dental, vision, life insurance, short-term, long-term disability, and retirement plans. You’re also going to want to know what they’re going to reimburse you for. So, continuing medical education, your licensing fees, and any dues for any organizations. Those are like the gist, the summary of what should be included. An offer letter is normally one to two pages. It’s not super-specific. It’s just a general overview to get the conversation started and to get the negotiation process started.

PA Paid Time Off Benefits

How much paid time off should a physician assistant get? What is the industry standard as far as time off goes? Well, first, you’re only going to get paid time off if you are an employee. If you are an independent contractor and receive a 1099 at the end of the year, it is very unlikely that you’re going to be given any paid time off at all. There are many PAs that work as independent contractors, especially those in the surgical specialties. They are only working sporadically, maybe a couple of weekends a month, or even only a couple of days a month. And in that scenario, if you’re an independent contractor, you are not going to get paid time off. This discussion will be about employed physician assistants who receive normal paid time off.

Paid time off is broken down into four categories: vacation, sick days, holidays, and then continuing education. And most employers will then give a certain number of days for each of those things. There are other employers, especially if you’re working for maybe a big hospital or hospital network, where they’ll have what’s called a pure PTO system. And in that system, there’s basically one giant bucket of time. And then any time you’re out of the office, you take that out of the bucket, it doesn’t matter what you’ve gone for. It doesn’t matter if it’s sick days or you’re on vacation, or you’re doing continuing education. If you’re not in the office, you’re taking time out of that one bucket. Now, if it’s not like that, let’s break down what’s kind of normal for each of those. The total time off for a PA should be somewhere between like 20 to 30 days.

When you add up all those four things, sick days, holidays, vacation, and CE, it should be somewhere between 20 to 30 days. I find most employers will give 10 vacation days. Now, some states have laws about how many sick days an employer is required to provide. But usually, it’s somewhere between three to five sick days. Again, somewhere between three to five days for continuing education, five would be on the high side for a PA. And then holidays, however many holidays that the office observes, which is usually somewhere between six to seven. So, let’s just say you add up 10 vacation days and six federal holidays, that’s 16. You get three sick days, that’s 19. You get three days for CE, that’s 22. That would be an average amount. If you’re only getting 10 total days of time off, that is not enough. If you’re being paid on a base salary, the more time off, the better for you.

Job Offer and Compensation from the Company

If your compensation isn’t tied to productivity, try to get as much time off as you can. Now, if you’re on a contract where you’re paid solely on productivity, then you must weigh, alright, well, I can take tons of time off, but I’m going to make a lot less money. Somewhere there’s a sweet spot for each person of alright, I need to take this much time off just to keep saying, but I also want to make this amount of money. And so, I need to work this many days to hit the productivity level that I want. Now, if you’re not being offered enough time off, then you need to attempt to negotiate that prior to signing the employment agreement. This is a standard thing that people address in contract negotiations. And you’re not going to get anywhere if you sign the agreement and then try to negotiate after the fact.

If they’re offering you 10 total days of time off, you need to say to them, look, this is well below the industry average and break down, these are the four components of it. This is what’s normal for each of those components. You’re providing me significantly less than that, but I’m being compensated like a normal person that would receive 20 days of time off. So, you’re making less by having to work more. If you present it in that way, instead of just saying, I want twice as much time off, I think an employer would be more likely to make at least some changes to how much they’re offering you. Honestly, some employers just don’t know, like if a physician never utilized a PA before, maybe they’d never have an employee and they’d just kind of make a number up. Well, you can say to them, look, this is well below what’s normal. And I don’t think most rational employers would take offense to that. So, that’s how much paid time off a PA should get. 

Physician Assistant Paid Business Expenses

What business expenses should be reimbursed by your employer regarding a physician assistant employment agreement?  I’ll just run through the list of the most common business expenses that we typically see within our practice. Each sort of employment relationship is unique. And so, they could not be included in this list. So, you just must consider your needs to carry out the duties that you’re employed for. And then whatever that is, that should really be the business expenses that you’re getting reimbursed for. But starting from the biggest amounts of money. And I’ll work my way down.

The biggest one is relocation expenses. Sometimes this is considered a business expense. If you’re going to be moving from out of state or across the country, that is one thing that your employer can reimburse you for. This is typically given as either a relocation bonus or relocation reimbursement, but either way that it’s structured, you just want to be careful because this is a large amount of money, I’ve seen anywhere from 10,000 to 20,000. You’re given that money up front or you’re reimbursed directly, but normally, you must stay employed with your employer for anywhere from one to three years. And if you terminate that agreement early, you may be required to pay back a prorated amount for how long you’ve been there, or you may have to pay back the entire amount. So, you just want to keep an eye on that, make sure you read your employment contract very carefully so that you know what you’re signing and what the consequences are if you do decide to terminate your agreement early.

The next business expense typically is any type of licensing fees or dues. If you need a DEA license or need to be credentialed with insurance companies, Medicaid, Medicare, any sort of state agencies, things like that, that’s always normally reimbursed and that should be reimbursed. That is one thing that should always be done because you need that to provide your services. So, they should reimburse you and these can get costly. Now, occasionally I’ve seen an employment agreement where you’re given some type of reimbursement allowance. You’re given up to 5,000 for all your licensing and fees, other times your employer, and I would say most times, your employer will just say that they will reimburse you 100% for any of those costs.

Then moving along, your CME allowance, and continuing medical education. You must do this to keep your license and provide your services, so therefore you’re considered an employee. Your employer should be reimbursing you for this. Again, this is structured normally as an allowance anywhere from $3,000 to $5,000 annually. Sometimes it must be approved for what you’re using those funds for, other times it doesn’t. Again, you want to read your employment agreement. And then also, normally you’re given PTO time to go ahead and take those CME courses or conferences because if you’re not, you have to take vacation time and that’s actually money being taken away from you. So, CME also is very important. If you need a cell phone for your work, cell phone usage sometimes can be reimbursed, or they may provide you with one directly.

Technology, so laptops, if you’re provided with one or they’re going to reimburse you for using your own, that’s rare in healthcare. You’re normally provided one directly from the company. And then also travel expenses. Sometimes if you have some type of mobile practice or you’re going to be providing services at multiple clinics, sometimes travel expenses are also reimbursed. And this is what I was talking about at the beginning. Every situation is unique. And so, there may be expenses that are unique to your situation. You just need to look at what you need to provide the services that you have agreed for your employment.

Negotiating an Offer Letter and Contract

How to negotiate an employment agreement for a physician assistant? When you are negotiating the terms of your employment, the two things you really want to keep in mind are, one, what type of leverage do you have? And two, what are really the most important things that you want to throw that leverage towards, to get the best deal for yourself, and what do you want to negotiate? What can you negotiate? What’s typically negotiated within the industry? Let’s first start with leverage. How much leverage do you have? Well, let’s first think about that. You are a physician assistant, and, in most states, you need some type of supervising physician. So, you want to keep that in mind. And then also, are you right out of school?

You’re going to need a lot of direct supervision. Are you experienced and you can just step into that role? How specialized are you? Again, this all just depends on your state. But really what you’re looking at is how much oversight you need, how much training, or can you just start providing care and collecting for your services? That’s how you judge how much leverage you have. Now, let’s talk about negotiation. I get questions from clients all the time: can I negotiate? Is this something am I going to upset this prospective future employer? And I would say, no, it is customary within your industry to negotiate the terms of your employment contracts. Most of the time they’ll hand you or send you an employment contract and give you one or two weeks to look it over, consider it, and consult with legal counsel, that’s me, and come back with any terms.

Sometimes you do want to negotiate. There are things that you should advocate for. Sometimes there also might be terms that you don’t understand, and you need clarification for, or you need this employer to define for you. There are some negotiations and back and forth. That’s customary, you should not feel that you’re going to upset them and they’re going to resend this offer. That’s just simply not the case. You’re always going to negotiate some part of your employment contract and your employer expects this. They do not expect you to just sign on the dotted line and agree to all the terms. That’s extremely rare. And I think your employer would be surprised if you came back with that. Now, let’s talk about what we’re going to negotiate. Most people, when they think of negotiation, they think of their base salary. The big money amount on their employment agreement, that’s what they want to negotiate first.

They want to use all their negotiation power for how much money they’re going to be receiving. If you feel like you’re not getting compensated how you should, you absolutely should advocate for yourself and try to negotiate that amount. But what I look for and I think is the most important to negotiate is sometimes it’s the non-compete clause. That’s the first thing that I would probably negotiate. Because a lot of people don’t think about the non-compete clause until their contract ends. And you can negotiate a couple of different parts of the non-compete clause. Normally, it starts with how long does the non-compete? Is it enforceable? Once your contract terminates, your non-compete will start. It’s anywhere from one to three years I’ve seen on a contract. I would never want anything over 12 months. I would push for 12 months or six months, honestly, but most people are going to agree to 12 months.

What Kind of Benefits is Expected? 

A brand-new physician’s assistant can expect to receive some benefits from their employer, but they may not be able to negotiate the entire array of benefits that they may get with more experience. That said, even new PAs should not shy away from asking for some of the following benefits. 

Health Insurance Coverage

A basic structure of the American healthcare system is that the vast majority of employees are covered by an insurance plan offered through their employer. This employer-based healthcare system is something that physician assistants are well-aware of, and it is something that they need to adapt to in order to make sure they have the coverage that they require to protect their health. 

Depending on where they work, some PAs may have the chance to get heavily discounted healthcare programs because they can receive many of the services that they require directly at the facility where they work. That is something worth looking into more deeply as you scan your contract. 

Retirement Plan (401k)

The median amount of money that the average American has saved in their 401(k) retirement plan is just $33,472 according to an analysis by investment house Vanguard. This is disturbing because it means that most people are not saving nearly enough toward their eventual retirement. It is also something that should motivate every physician assistant to make sure they have a 401(k) plan included in their contract. After all, no one should count on programs such as Social Security to bail them out if they don’t save enough for retirement. 

A variety of options should be available to every employee who wants to put money away in their 401(k) program. This means that physician’s assistants need to look into the depths of the 401(k) plan that is offered to them so they can figure out if it is indeed a quality program that they can rely upon. 

Paid Time Off (PTO)

No matter who you are or what you have going on in your life, you will need to take some time off from work in order to recharge your internal batteries. Taking some paid time off (PTO) allows you to do so without worrying about missing out on a paycheck. That is one of the biggest concerns that people have when they take some time for themselves, and it shouldn’t have to be this way. Employees should be able to enjoy their freedom to take a break from the day-to-day work that they do in order to enjoy some time for themselves. 

PTO should be a demand made even by those who are brand-new PAs. There is no reason not to be able to enjoy at least some time off throughout the course of the year. The standard is to allow for at least 2 weeks of PTO per year, ideally more.

Consultation with Chelle Law

When your Physician Assistant agreement is reviewed by a contract review attorney, you will find financial benefits which end up outweighing the cost of the review. Leave it to the experts. If you are in need of assistance with an employment agreement or contract review schedule a Physician Assistant Contract Lawyer with Chelle Law today!

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Definitely recommend! I’m a nurse practitioner and was able to renegotiate my contract with the help of Chelle Law. The outcomes were above expectations.
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I placed my trust in Chelle Law to handle my issue with the State Board of Nursing and they did not disappoint. Service was professional and courteous. I could not have asked for a better outcome. I highly recommend this firm!
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I am a veterinarian about 3 years+ out from school changing jobs for the first time since graduating . The idea of needing to closely review a contract was foreign to me and I honestly had no idea what I would be signing . Luckily I found Chelle law and worked with Erin who put all my worries at ease . She took the time and even went over our scheduled time slot to review / translate every section of my contract and make valuable suggestions that I could bring up to my future employer. Throughout our discussion it was clear to me that Chelle law is very familiar with the intricacies of a veterinary contract and what it typically should entail. I was very pleased with my experience .
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I needed a lawyer to review my partnership contract and Chelle Law provided a great experience at a fair price. My lawyer thoroughly explained the meaning of the contract in terms I could understand and provided valuable perspective as to which parts were normal and which parts were atypical or in need of modification. Thanks to their help, I've reached a contract that I and my partners are very happy with!

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