Grady Lee Bryant, MD, an otolaryngologist with Allergy and ENT Associates of Middle Tennessee in Hermitage, knew he was in trouble when he hurt his back. Thanks to disability insurance protection and advance planning, both he and the practice survived this financial challenge.
“A herniated disc compromised my ability to work,” said Dr. Bryant. “I was in conservative therapy for six weeks and working half time. When that failed, I had back surgery, and it was about six months from the injury before I was back to a regular schedule.”
The Council for Disability Awareness reports that a typical female in her mid-30s has a 24% chance of becoming disabled for at least three months during her professional career. The typical male in his mid-30s has a 21% chance.
Planning for disability is a complex undertaking. Legal, contractual, and tax implications for both the individual and the practice necessitate consultation with attorneys, accountants, and insurance advisors to ensure effective preparation.
Insurance is an important part of planning for the both the physician and the practice. Understanding exactly what you are getting and when benefits will be paid should be the first cut in decision making. Many practices include group disability insurance for their staff. While this is helpful, physicians should look at integration with any personal policies they have. “I would not suggest any physician rely solely on their group policy,” said Janos Bodnar, senior vice president at Golsan Scruggs Insurance and Risk Management, based in Battle Ground, Wash. “If they leave that practice, these policies are not portable. Doctors should understand the importance of having personal income protection.”
For both personal and group disability policies, it is important to look carefully at the definitions. These parts of the contract outline what constitutes a disability, when you will be paid, at what rate, and for how long.
“One of the things to consider is what is known as ‘own specialty’ definition of disability,” said Bodnar. “This says if a person cannot work in their own specialty, the payments will start. If you are an otolaryngologist and you can no longer perform surgery, you are disabled under the policy.”
Bodnar says this is a “Cadillac” policy with the lowest bar for collecting, and usually the highest premium. Another possibility is “own occupation” where you will be paid if you can no longer function as a physician in any capacity or any specialty.
Additional elements a physician should take into consideration when looking at insurance policies include:
- Amount of time the payments will last;
- Elimination period (how long you have to be disabled before the benefits start);
- Availability of extra money to pay off student loans in addition to the regular benefits; and
- Residual or partial benefits, which base the payment on the amount of time you can still work.
“I think physicians don’t realize that good plans pay even if you aren’t completely disabled,” said Dr. Bryant. “While I was able to still work half-time, I got 50% of my benefit. For the six weeks I was completely out, it went to 100%.”
The Health of Your Practice
Another issue that arises when a physician is disabled is the survivability of the practice itself. The size of the practice determines the types of concerns that need to be addressed.