New Independent Here!

HarryHK · Mar 31, 2006

I guess that's because you feel they don't exploit nurses??? I don't get it. You later say they DO. ????

I never stated an opinion one way or another. Exploitation is a political view primarily.

Again, I didn't say anything about higher expenses in my post in this thread. Why do keep insisting on putting words in my mouth?

Your exact words:

A big reason for this is that groups of employees have access to lower cost benefits than their IC counterparts. An IC might bill more than an agency employee is paid, but they also have significantly higher expenses and higher risk levels.

I think I paraphrased you accurately.

However you are not correct in your statements. Economies of scale apply here. A large employer has more resources and SUBSTANTIALLY greater bargaining power than you, as a single IC do. That's a fact. It has the benefit of substantially less expensive GROUP benefits for instance. The list goes on, but is that really needed?

Actually, in the world of travel nursing, just the opposite is true. The larger the company, the less they pay travelers. Any traveler will tell you that. Some still prefer to work for larger companies anyway because they do have more resources: more existing contracts is the biggest one - which means you don't have to do the time consuming work of either switching agencies or maintaining your paperwork with several small agencies to go where you want. Personal choice, but not more money working for larger agencies. The whole prime vendor thing that the large agencies do also tend to bring down travel nurse pay.

I have also found out myself, that negotiating for just myself with a hospital gives me a clear advantage. Larger agencies have to consider future business at the same facility, I do not. So far I have always had the highest bill rate at every hospital I've worked in. Small businesses are much more nimble than large businesses, especially when in the case of sole practitioners like me, there are no other employees to worry about.

You state opinions but not facts. For instance, I have a 401k with my agency. They match 100% of my contributions. In other words, I double my money the first day I "invest" it.

I would call that an opinion. You are not contributing the maximum allowed by the IRS. That is either $14,000 or $18,000 annually depending on your age. The agency "match" is technically profit sharing and is limited to 25 percent of your FICA wages. I would be amazed if they contribute this maximum amount. But in any case, it does not double your money, it comes out of your total reimbursement that the agency has calculated that still preserves the margin they need to run their business. It comes from money that you earn the agency. They are merely returning some of it.

I get FREE top tier BCBS insurance. I get a free $25,000 life insurance policy. I get free AAA membership. Free dental. Free vision. All pre-tax benefits. I also get a post tax benefit in paid time off (free money after taxes). How much do you pay for your benefits? Of course they are tax DEDUCTIBLE for you, but unlike you, I don't have to SPEND money to get them tax free.

Nothing in life is free. If your agency is "giving" you this, it comes out of what they could otherwise pay you. It is just a rearranging of compensation, just as I do when I arrange my own benefits.

You are correct that it has become SLIGHTLY easier to obtain health insurance as an individual, but you will more than likely have higher deductibles than you would in a group plan. You will definitely pay more (higher premiums) than a group, unless you have very marginal insurance.

Insurance is quite complex and I'm sure that for any individual that we could invent a situation in which some type of insurance will be better. But let me give you a brief description of how high deductible insurance works. An individual group health plan's cost is an average of $400 a month this year (the range is from $250 to $600 a month). A typical high deductible plan is an average of $100. That means the group health plan has an average annual premium of $3,600 more a year than the high deductible plans. High deductible plans can run as low as $1,000, but the premium I quoted is for deductibles of $3,000 to $4,000 a year. So if you are in typical health, you will come out dollars ahead generally as for most individuals, that difference buys a lot of health care.

And if you think about is just conceptually, you would realize the truth in this. After all, the insurance company has to show a profit margin in group health. And high deductible plans have an advantage for them as well. There is a substantial cost to processing many small claims a year.

Then as an additional personal advantage to high deductible insurance, you can contribute $2,700 a year to a pretax HSA. The resources I have been reading say that about 80 percent of Americans would be better off with such a plan. They are best for those under 65 in averagely good health. The resources I have been reading also say that almost all employers would be better off with such plans.

You have the same access to contracted healthcare rates as group health. And the same protection against catastrophes. And it cannot be taken away from you in such events the way group health will be taken away if you cannot continue to work (you can COBRA for 18 months and then that is over).

Deductible aspirin??? I can see how that 89 cents per 200 caps can really add up! You must get a lot of headaches. Of course, I can do that too through my FSA/HSA. If you aren't running it through one you are committing tax fraud on your aspirin by the way. I itemize on my taxes, so I also get to deduct my work related mileage. Yay for me!

I don't actually use aspirin. That was merely an example of how powerful the advantages of having your own business can be. A corporation is allowed to pay for all healthcare expenses for its employees. This is a legal benefit that does not have to be reported as taxable income to the employee. No normal employer would do that, too expensive. I can because I only have myself to cover. It is in my corporate bylaws, as required by law. No fraud involved.

If you itemize your taxes, it is likely because you have significant interest expense (the reason most people itemize). That means that you are actually paying a significant amount to save money. In addition, those kind of expenses (presumably reported on Form 2106) are subject to a threshold of 2 percent of your AGI, and then you may only deduct those expenses OVER 2 percent of your AGI - a rather large amount. And all your wages were subject to FICA, your itemizing expenses will never get you one cent of that back.

In contrast, as a small business owner, I deduct expenses above the line. They are subject to no thresholds, nor have I paid FICA on them, nor do I have to itemize my personal taxes to take advantage of the tax benefits as employees do.

Failed? Are you kidding? I CHOSE not to.

As such, your decision does not help to encourage others to become independent (the reason why nurses come to this forum), and in fact, I've never seen you say anything positive to nurses wanting to start their own businesses, only the drawbacks.

You need to understand the difference between presenting a balanced view of entrepreneurship vs. bullish optimism.

I do, and do present a balanced view. If you could step back from your posts, I'm not sure that you could say the same. My replies to your posts are bullish on IC because I am attempting to balance your negativism. Elsewhere, I have written many thousands of words about how to become an independent nurse. If you would like to message me privately, I'll be happy to share the link. I lay everything out, good and bad.

I have been an independent for three years now. In each of those three years, I put more in the bank than I was able to do in 12 years as an employee.

Right. If you say so, I'll have to take your word for it, but I have my strong doubts on that.

I don't know how else to convince you. In another thread, you also doubted my financial statements and I laid out a summary of what I had earned and expensed. For last year, I put over $80,000 in the bank from revenue after all costs. This was for 9 months work. The only thing left to do is email you my bank statements, tax returns, and corporate books. I could also send you my Quicken personal file complete for the last 15 years to show how much I saved each year.

I applaud your efforts, but you are misleading people if you say it is not hard, expensive or risky. There absolutely is risk. It potentially could be ALL of those if they follow THAT kind of logic. Let's be honest here.

OK, to be perfectly honest here, I come from a travel nurse perspective. From that perspective, I stand by my statement that it is not hard, expensive, or risky. You are doing EXACTLY the same job as before, just taking on the agency role in addition. There is not one risk that I can see that is one iota different for a traveler working as an employee for a regular agency.

Hard? It takes me about two hours total time to negotiate and contract with a new hospital. (That would be 8 hours a year). Invoicing takes five minutes a week. I do my own taxes, that take me about three hours a year. (I do utilize a payroll company though which probably saves me at least another three to ten hours of work annually though).

Expenses? What expenses? My biggest costs are insurance (last invoice was $265 for the year), corporate franchise tax at $50 a year (no retained income). The payroll company should be $25 a month but I am still getting the first two years free as a promotion. After that, I will have to re-evaluate that potential expense. The benefit for having my own company is theoretically 25 percent more revenue than my total employee compensation for a regular agency (including all direct agency cost to pay me - including benefits and payroll taxes). That represents the average travel industry margin last year. (I actually do somewhat better than that as I describe above). Shelving the rather large health insurance question for now as a wash, I can pay all the same employee costs as an agency, have 25 percent more, and be able to deduct more of it. I think that pays rather nicely for my fixed expenses.

To close, I have been an entrepreneur most of my life. I am also an educated accountant, financial consultant and business advisor (of 15 years) as well as a nurse. I have owned several very successful businesses that produced millions of dollars per year in revenue prior to selling them for substantial amounts of money. I started many of them on shoe-string budgets. I have seen the ups and the downs. Thank God, mostly ups. However, that's because I made sound, rational decisions. I also helped a great deal of people in their entrepreneurial persuits, and it's one of the things I am most proud of in my life.
I thoroughly enjoy discussing business and helping others. Please have the respect not to assume otherwise simply because you disagree with what I say. Moderation is a good thing friend.

It is very difficult not to question your motivations. You would be the first employee nurse I know who is a millionaire. Lots of nurses love their job, but come on!

You are consistently discouraging of entrepreneurship here. It goes far beyond a balanced view. I recognize that you have a different business perspective here, but when you are talking about single nurse businesses here, you have to realize that I have a lot of experience here. It is not hard. Your business experience lies elsewhere. Some of your comments have value for those trying to start large businesses such as nursing homes. Huge risks there and lots of stuff to consider. Most nurses that come here just want to cut out the middleman, a relatively obtainable goal for the right nurses and should be encouraged and enabled with real information rather than non factual talk about "many laws, regulations, ethical issues and tax considerations". How about actual advice on how to do something?

I meet plenty of business owners, lawyers, CPAs, doctors, and nurses whose professional advice is consistently negative. Says nothing about their own personal success, I don't question their success or yours. I do avoid getting their professional advice and seek council from those professionals with more balanced if not a positive "how can we do this" or "fix this" attitude rather than how we can't do something.

I would argue that many of them would have been further ahead or equally well off financially had they not gone the IC route.
I've been an agency nurse for about 8 years full time. At one point I considered becoming a contractor and researched it to death. I chose not to because I can make roughly the same money but without all of the "extra" work and risk associated with being self-employed in this line of work.

These statements don't leave much wiggle room for the assertion that you present a balanced view. Your opinion here is that based on your research, you can make roughly the same amount of money as someone else's employee as an IC without the risk. Leaves little room for discussing the possibility that you can be better off in many ways when you are self employed.

My actual experience (not theoretical) shows that financially you can be much better off. Again, it is not for everyone. If it is not for you, don't rain on everyone else's parade.