E783 | 401K And Health Insurance: What You Need To Know

Providing Benefits in Your Clinic: A Guide to Attract and Retain Top Talent

As your clinic grows and you begin hiring staff, one of the most important decisions you'll face is what benefits to offer. Benefits play a critical role in attracting and retaining talented employees, and they also contribute to creating a positive and supportive work environment. In this blog, we’ll break down the two most essential benefits for clinic owners to consider—healthcare and retirement savings—and how to approach them effectively.

Why Benefits Matter

Offering benefits isn’t just about meeting employee expectations. It’s about building a workplace where your team feels valued and supported. Benefits such as healthcare and retirement savings demonstrate that you care about your staff’s well-being, making them more likely to stay with your clinic long-term.

However, small clinics face unique challenges when competing with larger organizations that have greater resources. The key is to provide benefits that balance employee needs with your clinic’s financial realities.

1. Healthcare: The #1 Priority

Healthcare is the most essential benefit employees look for, and for good reason—navigating health insurance on their own can be overwhelming and expensive. Offering healthcare coverage is a major recruiting and retention tool, even for small clinics.

How to Approach Healthcare

• Work with a Healthcare Broker: Many payroll services, like Gusto, offer access to healthcare brokers who can help you find the best options based on your state, business size, and employee count.
• Cover a Portion of Premiums: Most states require employers to cover at least 50% of employee premiums. Some clinics go further, covering the full premium for individual employees and letting them pay the additional cost for family coverage.
• Consider Health Sharing Plans: For smaller clinics or startups, health sharing plans can be a cost-effective alternative. These aren’t traditional insurance but can cover medical expenses through pooled contributions.

Why It Matters

Healthcare is often a dealbreaker for potential hires. If your clinic doesn’t offer a health insurance option, you risk losing talented candidates to larger employers.

2. Retirement Savings: Beyond the 401k

Retirement savings is another common benefit employees ask about, but it’s not as urgent as healthcare. While 401k plans are the standard in many workplaces, they can be expensive and complex for small businesses to manage—especially if you don’t offer an employer match.

Alternatives to 401k Plans

• Individual Retirement Accounts (IRAs): Encourage employees to open their own Roth or Traditional IRAs. These plans are independent of your business, portable, and easy to manage.
• Financial Planning Support: Offer access to a fee-for-service financial planner who can help employees create personalized retirement strategies. This approach empowers them to make informed financial decisions without being tied to a specific workplace plan.

Why It Matters

Employees value guidance on how to save for their future, but they’re more interested in an employer match than the plan itself. If you’re not ready to offer a match, focus on providing tools and education to help them manage their finances independently.

Balancing Benefits with Growth Challenges

Adding benefits like healthcare and retirement options increases overhead, especially during the growth stage when your clinic may also be facing higher costs for space, equipment, and staff.

Here’s how to navigate this:

• Start Small: Begin with essential benefits like healthcare and add more as your clinic grows.
• Communicate Clearly: Be transparent with employees about the benefits you can offer and the reasoning behind your decisions.
• Focus on Culture: Beyond benefits, create a positive workplace culture that employees are proud to be part of.

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Podcast Transcript

Danny:  Hey, real quick, if you were serious about starting or growing your cash based practice, I want to formally invite you to go to Facebook and join our PT entrepreneurs Facebook group. This is a group of over 6, 000 providers all over the country. And it's a pretty amazing place to start to get involved in the conversation.

Hope to see you there soon. Hey, are you a physical therapist looking to leverage your skill set in a way that helps you create time and financial freedom for yourself and your family? If so, you're in the right spot. My name is Danny Matta and over the last 15 years I've done pretty much everything you can in the profession.

I've been a staff PT I've been an active duty military officer physical therapist. I've started my own cash practice. I've sold that cash practice And today my company physical therapy business helped over a thousand clinicians start growing scale their own cash practices So if this sounds like something you want to do listen up because i'm here to help you What's going on?

Dr. Danny here with the PT Entrepreneur podcast and today we are talking about benefits in your clinic. This is one of the more common questions that I get from the clients that we're working with and especially at the stage where you're bringing staff on it is what benefits should I have in my clinic?

What does that look like? And there's a lot of options, right? And it can, it can be very dependent on a number of factors in terms of your, your clinic size, number of providers you have, the state that you're in. That, that makes, that can make a massive difference. So this is generalized sort of you know, advice in terms of what I, I see most clinics want to do, especially.

The stage where you're going from yourself to somewhere in the range of three to four providers, right? And that that'll usually get you to a top line revenue number of somewhere between half a million and a million dollars top line revenue so but you're trending that direction and this is usually where you have to you know, kind of decide what you're going to do and and i'll tell you there's There's two areas two, two types of benefits that people are gonna primarily ask you about that you're gonna need to eventually, you know, have some sort of something provided with for your employees.

The first one is healthcare. Health insurance. Health insurance is hands down the most important benefit that you're going to offer as an employer, and it's because it is a big pain in the, in the butt for people to figure out on their own. And they want to make sure they have health insurance. And if you can take that off their plate because your business offers that, that is a massive recruiting win for you, potential hires, as well as retention benefit for you.

So the whole point of benefits. Is to create a, you know, a great work environment where your people want to to, to work and stay right? Like you want to create a culture that is a great work culture, but part of that is also that they have a good salary and benefits that go along with that and the challenge in some ways is you're competing with much bigger businesses clinics hospitals Far more infrastructure, far more resources, far more profit in many cases as well.

So at this stage you can feel tough because you don't really have the, that advantage. And, but yet the people that you hire are expecting that you're able to provide, you know, benefits similar to that of a big, you know, clinic or hospital. So. I would say healthcare is number one and then the second one that a lot of people ask about is you know, a 401k and I think that primarily number one, healthcare for sure is a, is a big problem that people don't want to deal with.

401k is one of those things that I think it's just something they probably heard their family talk about. More so than anything else and especially What they mean like no one really cares about a 401k as much as they care about a 401k match, right? Most people in the stage that i'm talking about aren't going to Be at a place Especially early stage where you're just having your first one or two Hires where you're going to be able to do some sort of match to retirement savings like that's probably not gonna Probably not going to be the best option for you as you get bigger.

That's definitely something you can look at And I'll tell you kind of what we see people do in these both these scenarios So the these two types of benefits number one is, to find a health care broker or To go through your payroll system to have Being in contact with a health care broker and it's based on your state in a lot of ways to what what options you have there and what the regulations are per state, but let's say you use Gusto, for instance, as a pretty common payroll service.

You can go through Gusto, you can look at the healthcare options you have for the type of company that you have, the number of employees that you have and then you can give them different options and each state can be different. It may require that you pay for a portion of that. With our clinic, what we did was we actually paid for the entire premium of a individual.

And then we would pay for whatever the amount is for that individual if it's for a family, we would cover the individual amount and then that person would cover whatever the additional amount was for the family. And that was dependent on how many people were in their family and things like that, their age, lots of factors.

So that's what we did. You don't have to do that in most states. It's 50 percent that the employer covers and the other 50 percent the employee covers. But that's one option. That's probably the most legitimate option. I should say, like it, it is something that people are most familiar with, you know, bigger health insurance companies like a blue cross or whatever United or Aetna or like those, those are, you'll be able to find companies like that within your, your payroll service.

The second option would be. To have some sort of health sharing plan within your business And there's there's a lot of people that we work with that do this I never have done this in any of the businesses that we have but this is where it's essentially not technically insurance, but it will cover, you know medical things that are that are needed they're very, they can be very different.

They're essentially money that gets pulled typically into some sort of nonprofit. And then if you have a healthcare incident, then you submit the, the payments that you've made on that, the claim that you have, and then it gets reimbursed to you. Right. These are typically way cheaper. I've, I've heard.

You know, kind of mixed things with these, like same thing as, I mean, healthcare general, normal healthcare is pretty mixed as well. These are significantly less expensive. Typically they're tied to some sort of like nonprofit or Christian group usually, and this can be an option for you too, especially if it's just like so cost prohibitive that you're unable to provide health insurance.

This can be an option. What you don't really want to do is just be like, yeah, we don't even have. Anything right now, like go and do something on your own go figure it out, or you technically can't give somebody money and say, use this for healthcare, you know, you can give them like an extra couple hundred bucks or whatever, a month if you want to.

And you can say like, we're going to do this because we can't. Cover insurance. Actually, I don't know if you technically can say that. This is what we did with our first staff member. We had our first office manager. We just didn't have any idea what we're, what we were doing with that. So, you know, we basically were like, okay, we're just gonna give you a pay bump.

You can figure it out. Does that sound fair? You know, and, and that's where we started. Eventually we brought health insurance in house in that business. But those are the two options that I see, but, and this is the number one thing that you're going to deal with. As far as a benefit that people want that's going to either attract and retain people or deter people because if you don't have any sort of healthcare option and you know, you're, you're trying to grow your your, your clinic, the, the work like the staff members in your clinic.

You need this as a benefit for sure. The second one is 401k and a 401k is is basically just a savings, plan That has some tax benefits to it depends on the type that you do that is you know, provided by your workplace and I am not necessarily the biggest fan of these mainly because In my experience, what I've seen is they're kind of expensive to maintain.

They're very challenging logistically to close if you decide that you don't you don't want those. And unless you're gonna do some sort of match, it doesn't really matter too much versus somebody just being able to create their own Roth IRA or traditional IRA. Most people are not going to max out more money in their account than that, than, than, than what we're talking about.

With a 401k, so if you're not doing some sort of match, then there's really not a massive benefit to it. It also allows them to like, you don't necessarily have their plan that they have to figure out how to move it. If they ever, if they ever take a job somewhere else, these are their individual plans.

I like them better that way, especially for these smaller businesses. And the other thing you can do is you can hire a fee for service financial planner to sit down with your staff member, you know, and actually like spend some time with them to figure out what the right setup is for them and what their family goals and all that.

Like, I think that actually goes much further than you just being like, okay, cool. Here's a 401k and the. 10 options you have within it, right? Like now they get a chance to sit down with somebody that I think of a fee for service. Financial planner is sort of like a cash based physical therapist. It's the kind of way I look at it, right?

It's just like, okay, I'm going to pay you for your expertise. You put together a plan for me. I will implement it. I can reach out to you if I have questions. But to be able to, to like, I have that as a benefit where yet we work with a financial planner that we. pay for on your behalf to actually for you to sit down and get a plan put together for you.

And then they can say, okay, cool. I can set up these accounts and these different brokerages. And then I'm going to set aside this much per month or put it on an auto draft. It's very similar to what you do the 401k except it's their plans. It's not tied to the business. And if there's no match either way, then, you know, I actually think it's a better option to just go with with a, like a plan put together by professional and then have them do either a traditional or Roth IRA or a mix of those.

Okay. And that, that's probably the most you need to do for that. I say that the two, by the way, healthcare is definitely the number one, number one. And I am close, even with PT business, we're like, you know as we've hired people even, even recently, one of the number one things people ask about is, Healthcare, right?

Like, okay, do you, do you offer healthcare? Yes. All right. Awesome. It's like a check the box in, in most cases. So that's the number one thing that you have to, to make sure that that you're adding in and it's tough that that growth stage where you're adding these things in, you know, you're also increasing your overhead.

You're, you're getting a bigger facility. You have build out loans, equipment loans. You know, you don't have nearly as much profitability and you have to grow through these, this stage to get to a point where your business is you know, You know, is bigger through hiring people. That's the way service businesses work.

And you have to take care of your folks too. And this is part of it. So these are you know, this is my advice as far as these two benefits are concerned is probably the ones you're getting the most questions on. Hopefully this helps. This is something that a lot of people that we work with deal with on a regular basis and are setting these up.

And overall it's really important, right? Like this is providing benefits to your staff members. This is a really good thing. Like this shouldn't be viewed as like, Oh crap, I got to provide healthcare for people. It's like, are you serious? Like you're providing amazing. job and opportunity for them. And I think if you view this differently, if you view this as if I can take care of my folks best that I possibly can, within reason, within the profit that I have within the business, right?

And you make the best decisions based on them. You're going to have people that are going to be happier. They're going to stick around longer. They're going to be more productive. Like they're going to be more engaged at work and it's going to be better for the business overall. So these are just ways in which you can really provide a great work life.

Environment for people so they can take care of their Families and they can have a job that they're proud of and they can have benefits that they deserve Right and and and that that's the way that I think you should really look at it Not necessarily as this burden. I think it's a really positive thing to be able to go through as a business owner

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