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Tail Coverage
Hey all,
I’m reading over a new contract, and I know that tail insurance can be an important thing to consider. Is it normal to have tail coverage covered 50% if working for a group for a shorter amount of time and then 100% if you work for a longer amount of time? I think that’s the only question I have about the contract, so I’d thought see if you all had seen something like that before. -
15 Replies
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What is the time period? Is it corporate or PP?
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BUMP. Thanks for your responses everyone. This is a private practice. It specifically states that tail will be covered 50% if the employee has worked 3+ years and 100% if they’ve worked 10+ years. Is this common?
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That seems like a long time to get fully covered tail. Tail vesting is apparently common, but Ive never seen it.
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Oh, and it’s partnership track. So that may play a role…
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Quote from clinicallycorrelated
BUMP. Thanks for your responses everyone. This is a private practice. It specifically states that tail will be covered 50% if the employee has worked 3+ years and 100% if they’ve worked 10+ years. Is this common?
What are the terms in the partnership agreement ?
Seems a bit longer than what I have seen, the cost of the tail increases with the amount of ‘risk’ you accumulate along the way.-
Quote from fw
Quote from clinicallycorrelated
BUMP. Thanks for your responses everyone. This is a private practice. It specifically states that tail will be covered 50% if the employee has worked 3+ years and 100% if they’ve worked 10+ years. Is this common?
What are the terms in the partnership agreement ?
Seems a bit longer than what I have seen, the cost of the tail increases with the amount of ‘risk’ you accumulate along the way.
Vesting of 5 years is reasonable; not 10.
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I was considering retiring this year, have been in practice almost 30 years. Contacted my med mal insurer last year and asked if I took a part time job elsewhere , with a group that does not use this insurer, my tail would be 55k. If I stopped working completely, no tail. If I worked for a group which used this insurer I could work 12 weeks per year without paying a tail. As such , slowing down could be costly.
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You mean slowing down could be more costly than retiring outright…
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I wonder if it possible to use asset protection instead of purchasing tail insurance in some states if tail insurance is not required in the employment agreement? The attorney would then go after the employer.
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Quote from clinicallycorrelated
Hey all,
I’m reading over a new contract, and I know that tail insurance can be an important thing to consider. Is it normal to have tail coverage covered 50% if working for a group for a shorter amount of time and then 100% if you work for a longer amount of time? I think that’s the only question I have about the contract, so I’d thought see if you all had seen something like that before.
Yes, some sort of graduated payment scheme for the tail is common. Its a bit of an incentive for the new hire to stick around for a while.-
common
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Tail coverage may protect the group also.
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Quote from vonbraun
Tail coverage may protect the group also.
Oh, the practice buys the tail regardless of whether you want to pay for it. It mostly protects the practice.
Good news, tail in year 1 and 2 is not much money.
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IDK if what the OP mentions is “normal” but I wouldn’t balk at it.
As someone else mentioned, tail coverage if you leave after a couple of years will probably be less than if you’d been working for 5+ years. Pretty easy to see why that’s the case.
Not really germane to the OP, but another aspect of MP coverage I’ve seen is a “complementary” tail policy if doc is over 65 and retires completely from medical practice (“complementary” meaning no charge for the tail coverage in that situation). Given the evolution of economics/finances and the seemingly never-ending search for “efficiency” drilling down into just about every friggin’ aspect of our lives, I wouldn’t be surprised if this is being phased out.
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Quote from Dr. Joseph Mama
Not really germane to the OP, but another aspect of MP coverage I’ve seen is a “complementary” tail policy if doc is over 65 and retires completely from medical practice (“complementary” meaning no charge for the tail coverage in that situation). Given the evolution of economics/finances and the seemingly never-ending search for “efficiency” drilling down into just about every friggin’ aspect of our lives, I wouldn’t be surprised if this is being phased out.
That’s a common feature of claims-made policies. Not sure if all have it, but there is usually some type of retirement provision built in, after x years of premium payments and retirement from active practice. This can create a situation where someone is forced to fully retire even if they would want to stay active for their group in some reduced capacity (long term locums). Sometimes there is an allowance for that, e.g. you can work ‘x shifts/year’ without losing the ‘retirement tail’ (while being insured under the locums provision of the master policy).
Some insurers have interesting provisions. A friend was a bit befuddled about the whole thing and asked me to look at it. She was leaving a primary care practice after two years to move closer to her parents. Turns out, the insurer actually provided a complimentary tail for anyone leaving the state after less than ‘x’ years to practice somewhere else. They only wanted to get paid for the tail if you switched to their in-state competition, if you moved somewhere else, they issued a separate tail policy for free. This was a physician run mutual insurer, not an investor owned outfit, but it was a neat feature that gave people who started a job an ‘out’ if they wanted to leave.
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