The purpose of insurance is to protect against extraordinary or catastrophic financial losses. One potential loss to consider is when a terminated or disgruntled employee hires an attorney to sue your practice for wrongful termination or for an array of other situations while a member of your staff.
Employment Practices Liability Insurance, or EPLI for short, is the type of insurance that protects against claims filed by disgruntled employees. Expect to pay annual EPLI premiums based on the size of your staff and the dollar amount of wages paid. In the grand scheme of insurances, the premiums are generally quite reasonable, especially when compared with the potential for a sizable settlement that could financially devastate your practice.
For an EPLI quote, please reach out to the insurance agent where you obtain your Property and Casualty (P&C) insurances, which includes business liability, workers compensation, and malpractice. Your life, disability, or health insurance agent probably can’t help with EPLI.
If you are unlucky enough to ever receive that certified letter notifying you that your practice is being sued by a disgruntled or terminated employee, you will be very glad that you purchased EPLI. Simply pass that certified letter along to the insurance company that issued your EPLI policy, and they should take over from there. Since your EPLI company takes on much of the risk of losing money on the settlement, they take whatever steps are necessary to minimize the claim.
In the many years that we have helped our healthcare practices, we thankfully haven’t seen too many employment-related claims. Even so, they do happen from time to time, and sometimes the losses can be substantial. For that reason, we recommend that all our clients who own their own practice and employ staff consider purchasing EPLI.
And Don’t Forget About Cyber Insurance:
While you’re getting a quote for EPLI for your practice, please also inquiry about obtaining Cyber insurance for your practice to protect against the costs and headaches that follow a cyber breach.
If you haven’t already filed for forgiveness of your PPP2 loan, please do so soon. Otherwise, your PPP2 lender will require that you begin making payments on that loan. Any payments made will be refunded when the PPP loan is ultimately forgiven, but why not just take care of filing for full forgiveness now?
Start by contacting the PPP2 lender and finding the link to submit for full forgiveness. If you prefer to handle things like this on your own, here are a few articles on our website that might be helpful:
Otherwise, we can help you apply for PPP Loan Forgiveness with your lender. Our fee for to complete the Form 3508S is $750, discounted to $500 if you use our firm’s payroll service, while our fee is $1,000 to complete the Form 3508EZ or $1,500 for the Form 3508.
From IRS News IR-2022-104, May 6, 2022
WASHINGTON — With many businesses facing a tight job market, the Internal Revenue Service reminds employers to check out a valuable tax credit available for hiring long-term unemployment recipients and other groups of workers facing significant barriers to employment. For any business now hiring, the Work Opportunity Tax Credit may help.
What is the WOTC?
This long-standing tax benefit encourages employers to hire workers certified as members of any of ten targeted groups facing barriers to employment. the IRS notes that one of these targeted groups is long-term unemployment recipients who have been unemployed for at least 27 consecutive weeks and received state or federal unemployment benefits during part or all of that time. The WOTC is available for wages paid to certain individuals who begin work on or before December 31, 2025.
The other groups include certain veterans and recipients of various kinds of public assistance, among others. Specifically, the 10 groups are:
- Temporary Assistance for Needy Families (TANF) recipients,
- Unemployed veterans, including disabled veterans,
- Formerly incarcerated individuals,
- Designated community residents living in Empowerment Zones or Rural Renewal Counties,
- Vocational rehabilitation referrals,
- Summer youth employees living in Empowerment Zones,
- Supplemental Nutrition Assistance Program (SNAP) recipients,
- Supplemental Security Income (SSI) recipients,
- Long-term family assistance recipients and
- Long-term unemployment recipients.
Qualifying for the credit
To qualify for the credit, an employer must first request certification by submitting IRS Form 8850, Pre-screening Notice and Certification Request for the Work Opportunity Credit, to their state workforce agency (SWA). It must be submitted to the SWA within 28 days after the eligible worker begins work. Employers should not submit Form 8850 to the IRS.
Claiming the credit
Eligible businesses then claim the WOTC on their federal income tax return. It is generally based on wages paid to eligible workers during the first year of employment. This is a one-time credit for each new hire and an employer cannot claim the WOTC for employees who are rehired.
The credit is first figured on Form 5884, Work Opportunity Credit, and then claimed on Form 3800, General Business Credit.
By Guest Write Stefan Zelich, President/Founder of FOCUS Healthcare Realty
Rent is typically a dental practice’s 2nd or 3rd highest expense behind payroll, but it’s also one of the most negotiable. This ability to negotiate one of the highest expenses to a practice allows doctors to improve their overall profitability significantly. I typically find most practices could save a significant amount of money by approaching their expiring lease with the proper amount of leverage.
How does the math work?
Let’s say that you have a 2,500 SF practice, and you’re looking at signing a 5-year extension. The practice has been there for ten-plus years and needs some updates. Many landlords are willing to provide generous tenant improvement allowances for a long-term lease because it represents a direct investment into their space. An allowance of $20 per SF comes to $50,000 and will likely cover new flooring, paint, and lighting for the practice.
If the practice can reduce its rent by $3 per SF, that’s $7,500 per year and another $37,500. Suppose you take that savings and invest it into an investment account at a 7% rate of return. That amount jumps to $45,000, which brings your total savings to $95,000. Then it’s just a matter of getting the landlord to return a piece of the original security deposit to get you to the total of $100,000 in savings.
How to accomplish the savings?
The scenario outlined above is not uncommon, but it can only be achieved by maximizing your leverage with the landlord. There are three keys to maximizing your leverage in a lease negotiation.
- Timing – You must have enough time to move your practice. If you don’t have enough time, your landlord will not be worried about you leaving and will not be willing to offer their best terms to get you to stay.
- Secure multiple offers – In any negotiation, it’s always the person with the most options that come out on top, so it’s critical that you go out and secure offers to move your practice elsewhere.
- Hire a real estate broker – The call/voicemail to your landlord goes like this: “Hi Mr./Mrs. Landlord, my name is Stefan Zelich, I’m a commercial real estate broker, and I’ve been hired by your tenant ABC Dental to help them decide what to do when their lease expires in 12 months. They’ve received offers on a couple of other properties and would be willing to sign an extension if we can agree on some new terms. We’ve drafted a letter of intent outlining those terms that I’ll send shortly. Please let me know if you have any questions.” This approach gives the idea of you leaving significantly more creditability than if you were to call the landlord on your own. The best part is that the landlord will pay your real estate broker’s fee in addition to the concessions, so you don’t come out of pocket for anything.
A significant amount of money is tied up in most practices’ real estate leases. Unlocking that money usually comes down to applying the three keys outlined above. Most doctors will only have one or two, maybe three, opportunities to negotiate new terms with their landlords. If handled correctly, the potential for future savings can be in the hundreds of thousands of dollars. By hiring a broker well versed in the healthcare space, the doctor can focus on what they do best and let the real estate expert focus on what they do best.
Stefan Zelich, President/Founder
FOCUS Healthcare Realty
Last month during the 2017 Yankee Dental Conference in Boston, I was interviewed on the topic of Minimizing Practice Overhead to Maximize Profits.? While this interview was geared specifically towards dental practice owners, much of the information discussed applies to all healthcare practice owners.? I hope you are able to use some of this information to increase the profitability of your practice.
Below are the talking points from that interview:
Question – Like any business, dental practices pay a lot of money on their overhead each year.?
Yes, overhead for most general practices ranges from a low of 45% of collections to as high as 60% or more.? Please note that is ?non-doctor? overhead, which means that the salaries and benefits paid to owners and Associates are excluded from overhead. Most dental practices, therefore, have somewhere between 40% and 55% of practice collections available to pay the salary and benefits of the owners and the other doctors, and also pay the practice debts and invest in equipment and technology.
Question – What is generally the largest expense incurred by dentists?
Staff expenses are pretty much always the largest expense grouping. Practices we work with around Boston pay on average 23%-28% or higher of their collections for salaries, payroll taxes, health insurance, retirement plan contributions, and other staff costs and benefits Remember, this is non-doctor staff costs that includes the hygienists, assistants, and front desk/admin staff.
Question ? How can practice owners minimize their staff costs?
Start by leveraging technology that is available and reasonably inexpensive to replace labor intensive activities.? All practices can improve communication with patients and save payroll costs by utilizing programs that sit on top of the popular practice management systems and interact with practice patients, including:
- Lighthouse 360
- Revenue Well
- Solution Reach (fka Smile Reminders)
- Demand Force
One of my clients insists that using Lighthouse 360 saved the practice that he had purchased a few years prior. When set up properly, these programs save staff time and cost by:
- Confirming appointments via text message or email
- Filling the schedule following cancellations
- Sending out surveys following each visit
- Promoting Yelp and Google reviews
Another way to save staff time and costs is to utilize a collections service.?Paying staff to chase after delinquent patient receivables becomes expensive.? An inexpensive service such as the one provided by Transworld Systems sends out a series of 5 letters to delinquent patients for a cost of just $15 per account.? The series of letters starts out very friendly and then proceeds to get a little more demanding with each subsequent letter sent out.
Another benefit of using a collection service is that doing so?helps front desk staff adhere to the financial policies of the practice.? All they need to do is send over a delinquent account through a web based system once the account exceeds a set number of days past due.
Question ? What about marketing costs?? It seems dentists can spend a lot on marketing that doesn?t always pay off with results.
Practices we work with seem to spend 1% to 2% of their collections on advertising and marketing each year.? According to a recent article in Dental Economics, the best way for practices to attract new patients is through:
- Existing Patients
- The?Practice’s Website
- Social Media (Facebook and Google ads)
- Yelp and Google ratings and review
To get the best results from these four methods of marketing, make sure that each patient has the best possible experience with each visit to your office so they become your best advertisement by broadcasting to their friends and family how great you are. Also make sure to track how new patients heard about your office to figure out how best to allocate your marketing dollars and efforts
I strongly recommend that you read 1 800-Dentist founder Fred Joyal?s book ??Everything is Marketing.
Question – What Are Some Other Opportunities to Cut Some Costs?
Here are some recurring costs that you might be able to save by contacting a few providers to get updated pricing:
- Merchant Fees – don’t assume you have the best pricing for processing credit cards.
- Utility Costs ? now that there has been deregulation.
- Insurance Costs ? putting all insurance with one company can save money
Question – A lot of dentists who purchase existing practices, purchase equipment or technology, or open or expand practices have loans they are paying.? What can these dentists do to cut this overhead expense?
There are a few options available to practice owners with debt to cut the interest rate on those loans. Start by trying an?“Internal Refinancing” with your current lender. This opportunity is generally available after 1 year of paying the debt. and only in circumstances where the interest rate on the loan is higher than the rates currently being offered.? There are generally minimal loan costs and paperwork required in connection with an internal refinancing.
A second option is to refinance your practice loans with another lender. There are multiple dental specific lenders in most markets competing for good loans, and they all love refinancing opportunities, especially for great practices
Question ? Besides staff expenses, dentists seem to also spend a good amount each month on their facility expenses.? How can they cut these costs?
Most established dental? practices we work with spend between 5% and 7% of collections on Facility Expenses ? rent, repairs and maintenance, utilities, and local taxes.?? The good news is that there is a relatively new national business service available to all healthcare professionals to provide lease renewal assistance.
The name of the company is call?Carr Healthcare Realty, and unlike a Doctor that negotiates a lease once every five or ten years against property owners who negotiate leases as part of their job, Carr acts as the Doctor’s agent and use their experience and access to market data to professionally negotiate for better terms including:
- Monthly Rent Cost
- Free Rent for a certain period of time
- Tenant Improvement Allowance
Since Carr acts as your agent, their fee is paid by the Landlord as part of the lease you sign.? We have had clients save tens of thousands of dollars over the term of their lease thanks to Carr Healthcare Realty, and paid no direct fee to Carr for that valuable service.
Remember, each 1% that you can cut from your overhead puts $10k more into your pocket assuming you have a $1 million practice.
By guest writer Phil Kluge, Transaction Resources, Inc.?
Big changes are here for businesses that accept credit card payments.? Essentially, an EMV liability shift takes place October 1, 2015 that could cost your business a lot of money if you end up processing fraudulent transactions.
EMV is an acronym for Europay, MasterCard, and Visa. EMVCo?is now the organization that will manage the standards for MasterCard, Visa, Discover, American Express, JCB, and China UnionPay.
According to EMVCo’s website:
?EMVCo exists to facilitate worldwide interoperability and acceptance of secure payment transactions. It accomplishes this by managing and evolving the EMV? Specifications and related testing processes. This includes, but is not limited to, card and terminal evaluation, security evaluation, and management of interoperability issues. Today there are EMV Specifications based on contact chip, contactless chip, common payment application (CPA), card personalization, and tokenization.
This work is overseen by EMVCo?s six member organizations?American Express, Discover, JCB, MasterCard, UnionPay, and Visa?and supported by dozens of banks, merchants, processors, vendors and other industry stakeholders who participate as EMVCo Associates.?
In the U.S., EMV may be implemented as Chip and PIN, Chip and Signature, or other variations.? It is up to the issuer to choose.? As always, an effective strategy to protect against duplicate card fraud is to maintain a “card-present environment”.
EMV Liability Shift
Beginning October 1, 2015, if a business accepts a “chip card” without the use of an EMV capable terminal, the business will be liable for any fraud connected with those transactions even if the business receives an authorization for the transaction.
However, if a business has an EMV capable terminal, receives an authorization and later finds that a fraud occurred with a transaction, the issuer would be liable for that transaction instead.
What Does EMV Mean to Merchants?
If your credit card terminal is more than 12 months old, you should replace that terminal with one that is EMV-capable that supports:
- Magnetic Stripe Reader
- Chip Card Reader
- NFC Reader (Apple Pay, Google Wallet)
What Should You Do At Your Business?
Even though there has been slow adoption of EMV in the U.S,, POS vendors and processors are now scrambling to meet EMV implementation dates.? Please make sure to talk to your Merchant Services provider or Phil Kluge at Transaction Resources to see if your business is in compliance.
Transaction Resources Inc. (TRI)?offers innovative payment processing solutions by combining the latest technologies, a passion for customer service and competitive rates.?You can contact Phil Kluge and his team at 781-496-3454.?TRI also maintains CardDog.com, which helps businesses build successful gift, loyalty, prepaid cards, and discount programs.