I was wondering if anyone has any experience in being an independent contractor for a hospital just like an agency nurse but not going through an agency. If so, what tips can you give me and how does the billing work? Thanks!
I typically recommend a nurse set themselves up as a business. Even if it's a single owner/run entity, you want to convey the message that the hospital is doing business, well, with an actual business.
Setting up a business entity isn't really complicated, and there are many resources available. Deciding what type of entity is probably the most confusing, but ultimately each State has it's own rules/regs. I could of course go on.
The billing aspect is that your company (YOU) would just bill the hospital for the hours worked, but this billing may only occur every two weeks and may even happen once a month. Then, once you submit billing, the hospital may pay you anywhere from 15 days to 30days (you would really want to define the paramaters). It would consist of what's called Net 15 or Net 30. Again, I could go on.
The take away really is that you just need to establish a business entity, and this is really my opinion, but I do speak from experience.
Thanks for the information. From those I have talked with so far, I am finding that the limiting factor deals more with the federal, state and employment tax laws. If anyone can chime in on this, it would be GREATLY appreciated. I have been told that it may not be possible to work in a hospital as an independent contractor because no one would be paying the employee tax that hospitals or agencies currently do for hospital employees or agency nurses respectively. Does anyone know if this is the case and is there a way around this by having the independent contractor pay their business taxes?
The taxes are ultimately your responsibility, but certainly don't be overwhelmed by this.
Essentially the hospital pays your company (you) a flat fee for hours worked. Let's say you were charging the hospital $65/hr. Your company (remember that's you) would invoice the hospital for this rate. Keep in mind that you are not going to be paying yourself this.
Let's say that you payed yourself $50/hr. You would take out your federal and state taxes just as your employer would, you'd pay the company portion of your FICA/Medicare, and the net income is your take home salary. Part of that extra $15/hr goes to paying some of the taxes and overhead, but remember the only thing you're paying "extra" on is the company match FICA and medicare taxes. These are also tax deductible.
As an employee your current hospital is taking out the federal/state taxes and depositing them to make "payments" on your behalf. As a business owner, you would actually be doing this.
Believe me, you can get the hang of this concept. Just remember as I said before, think of yourself as a business, not an employee. And, don't sell yourself short...EVER. Make what you're worth.
When you say agency nurse, are you talking about local registry work? If so, while I hate to discourage budding entrepreneurs, I think it will be almost impossible to break in that market with you as your sole product. A hospital hires a registry with the reasonable expectation of getting a good portion of their needs met in many departments (specialties). You just can't do that alone.
If you are talking about travel contracts, that is a different kettle of fish altogether. I've been traveling since 1995, and formed my own agency in 2004 and have been working for myself ever since. On business form, I started as a sole proprietor, and a year later decided in favor of a C corporation (an unusual choice, most do LLC or S corp). But as Kevin says, there are many places to learn about business types, including any book on starting a business. I agree completely that you need to have your own business to properly represent yourself.
One small difference with Kevin's info, I invoice weekly, and I've not heard of any travel company doing differently. Cash flow and financing a payroll are big issues when you are paying employees (of course your situation is not that, but that is still the expectation - heed Kevin's advice about thinking like a business, not as an employee). Standard business practice is that invoiced businesses have 30 days to pay. This means a minimum float of 5 weeks before you get paid. While it takes almost no money up front to start your own agency, you do have to be prepared to have significant savings or line of credit to afford this lag time. That financial advice applies to regular travelers as well, as anything can happen while away from home.
Might as well start your own agency. You will have your business entity and you alone can't cover all the hours needed. Hire on some good employees make some extra money on top what you would be making. This is my first year at it the first 3-4 months was rough financially but the money is coming in regards now and will be picking up second contract soon and will be hiring cans and nurses soon. It's very exciting and fun.
My specialty is clinical reimbursement, MDS, for long term care. I have been working as an interim, using recruiters as my marketers basically. I invoice the company directly. My contracts start out for 8-12 weeks, however, there is so much work out there and not enough MDS Coordinators to fill those positions that some of my contracts run over that initial time frame. Some last just under a year. I have been really busy. I love this type (independent contracting) of work.