HarryHK

Traveler.

What questions provoked this response? You may well have been asking questions with proprietary answers that no agency is comfortable answering. Questions like how many travelers do you have, what is your bill rate, how many assignments terminate, and so on.

What I posted was in the context of contracting to acute care hospitals. In most states, there is no regulation of such agencies or insurance requirements. Home health is outside my area of expertise, and I understand that in most states the industry is heavily regulated. That said, there are always ways around regulation. For example, the woman you took the class with may have been running a simple referral business, with fees charged to the client or the worker. There would be a direct "contract" between the healthcare worker and the client, so no regulation or insurance requirements for the third party. In other words, she was not actually an employer. It is also common for per diem agencies to use nurses on a subcontract basis, and provide no benefits, and may require that you carry your own workers comp and liability insurance. Thus, no payroll, and a large percentage of their costs are shifted to the worker. In the case of per diem workers at acute care hospitals, it is up to the individual facility if this practice is allowed. For home health, I think it depends on the state regulation. Hope this helps. Not a very fast response!

1. If you are working away temporarily from your permanent home, the expenses incurred such as housing are tax deductible. Alternatively, if the agency provides either housing or a stipend in lieu of, that is a tax free benefit - no receipts required. 2. Sign up with several agencies to gauge fair market prices. Yes, with most agencies you can negotiate. The larger agencies tend to be harder to negotiate with. 3. Your agencies will guide you through the whole process. Find agencies with a Google search, or journal ads. 4. Some agencies have better insurance than others, you will have to inquire. Generally your permanent employer will have superior insurance. If that is important to you, you can continue it for up to 18 months per COBRA regulations. You can also purchase your own private insurance through companies like Blue Cross Blue Shield, there are major advantages to doing so if you are relatively healthy. 5. No, the bill rate from the hospital is fixed. However, some hospitals may require ACLS, so having certifications may open up additional assignments to you. It is worth your while to call a couple of agencies and you will start to get a feel for travel nursing. If possible, do not give them your contact information or resume until you are ready to go AND they have a suitable assignment with acceptable compensation.

No matter how you slice it, agencies make a gross profit margin of between 20 to 30 percent of the bill rate after all direct nurse expenses have been paid (the definition of gross profit margin). This is AFTER paying all those additional expenses you are referring to. It is difficult to lose on a direct contract. Now if you want to talk about the time spent in looking for and arranging housing and benefits, you've got a point about the benefits of an agency doing this for you. And withholding taxes, paying their overhead (recruiter commissions, owners, rent, utilities), and marketing, yes, that comes out of the 20 to 30 percent gross profit margin. For those willing to do the extra work and who have the inclination and the skills, direct contracting is a no lose situation, it is not possible to make less money. It is more about considering basic aptitude than worrying about losing money. About the only real money issue for independents is the delay between invoicing and getting paid (usually 4 to 6 weeks), and the upfront money for housing. But every traveler has a cash cushion if they are wise to cover the unexpected. Travelers who are not good money managers should certainly not start their own business, and some would say not even travel!

Thanks, I guess. Not sure what your point was other than projecting your own animosity at innocent nurses who are in no way responsible for your budgetary problems and citing "facts" with no evidence. So if I helped you realize that, you are welcome. I might point out that healthcare costs and outcomes is an interesting topic and we could have had an interesting discussion on that. Certainly the numbers and quality of nurses impacts both costs and outcomes and an open discussion with both management and worker perspective would have been productive for both parties. The high road is always better.

Gee Karen, we seem to be responding to your own animosity for nurses and lack of citations for your "facts". We've cited a reputable study as well as pointing out well known demographic factors. Until you substantiate your claims, ad hominem attacks are a poor substitute for a reasoned argument. OK, a poor substitute even with evidence to support your position.

fizz2Nurse is completely correct in all her posts with tax rules. To add to her excellent posts about some specific statements like the ones above: Assuming the traveler is working away from a legitimate tax home and follows the rules, none of the above is a factor in initiating an IRS audit, or needed for defense in an audit. It is true that for very high wage earners (or more often, high passive incomes), a large shift in taxable earnings is a factor in closer examination of taxes. For ordinary earners such as nurses this is not true. There is no expectation of some threshold of earnings that must be maintained. My own taxable wages swing $50,000 from year to year (a very large shift indeed on a percentage base) and I've never been audited. Some think that making to little in hourly wages is a red flag. The IRS has no idea and no way to know how much you make per hour. They receive quarterly reports on total taxable wages, not wages broken down per hour or per week. Saving receipts for expenses that you have been reimbursed for (such as lodging and M&IE) is completely unnecessary. The IRS doesn't require it, nor do they have any information about your reimbursements as it is not reported to them. Only income is reported to the IRS, not reimbursements. Working 50 miles away from home is not a factor of a determination of a legitimate tax home. This is an urban legend among travelers that arises from two sources. One is the IRS rules on moving expenses which requires a 50 mile distance to be deductible (travelers do not move). The other is from agency based internal rules about whether reimbursements to travelers will be taxed or not. All companies are required to have minimum policies in place to determine if a traveler is eligible (by agency rules) to receive reimbursements tax free. 50 miles is a common determinant (although not the only one). An agency is not the tax police, they only have to show a reasonable effort to protect themselves. How they determine internal rules or actually pay the traveler has nothing to do with whether a traveler is actually eligible for tax free reimbursements. This is a very important distinction that many travelers are confused about and their recruiter assists in this misinformation. The recruiter knows what the agency policy is but is not a trained tax professional.

It is clear that you have a narrow management perspective and to imply that you are preparing a foundation for a new generation of nursing professionals is wrong. You are actually preparing a new generation of workers to exploit. I would suggest to you that rather than denigrate travelers for being overpaid, you should consider the reality that you are underpaying your own staff nurses. If you paid appropriately, you would not be understaffed . And from a national perspective, there would not be a nursing shortage if all nurses were paid what they are worth. Despite being a manager, you are not understanding the basic economic principles of supply and demand, only the constraints of your own corporate pocketbook. You might look to the California example. Not only do they have mandated staffing ratios, but pay far above the national average. In fact staff pay routinely is so far higher than travelers that travelers become staff there. And the use of travelers in California has dropped precipitously in lockstep with the rise in pay over the last couple of years.

As the general contractor, you will be required to show proof of general liability, you may in turn pass this liability down to your contractors and require that they obtain insurance contractually and show proof to you. You are not responsible for workers comp on your contractors. However, the facility may demand such proof by you or your contractors. Ultimately, you have little control over the contractor filing a WC claim against you or the hospital by attempting to show that they are an employee, not an IC. Good contracts and handling of work relationships are key to protecting yourself. A good text to read if this is of concern by you is: HIRING INDEPENDENT CONTRACTORS: The Employer's Legal Guide, Attorney Stephen Fishman, AUG 2000 NOLO $29.95 304 pages

My knowledge base is limited to traveling. That is something that can be done to employ one's self with practically no funds or licenses. A local staffing agency is a very different beast. Yes, you will need significant funds and/or a way to finance your payroll, set up an office, purchase needed utilities and licenses, and promote your business. Good luck with that! It is certainly not low hanging fruit but if you know the industry well and have many contacts with local nurses and facilities, then that is the kind of business you should take a stab at. Do do lots of research before you start, check out your competitors and what you can do better, and of course other market conditions, particularly availability of staff and needs of facilities.

Only a person MOVING to the state. Not business travelers.

I would never put the name of an agency on your resume. They cannot provide a good reference and even have some incentive to give a bad reference. It is the hospital that is providing you with a workplace and supervision and a reference/evaluation as needed (you should be maintaining your own professional portfolio - get your own written references for best control over your career). Your goal should be to have a one page resume, particularly for agency or travel assignments. No one cares to look through a five page resume, they are hiring a warm body and just need to ascertain minimum skills and experience. Be ruthless and expunge all irrelevant information, even education if you have a long work history. Add stuff if you have a short work history to flesh out the page. Format it so a quick glance will allow the reader to get a snapshot of your professional life. In this regard, the hospital names you have worked at will be a key clue for the manager. Resumes are very individualized and often have to be because of unique experiences. As such, there are many ways to format information. I'm a fan of one hospital, one line with start and stop dates. I have 12 years of travel on a one page resume and still have room for education. That cannot work that way for per diem though. In your case, I would say per diem, general area (Los Angeles), date range worked, and the specialties worked. That may take up two lines. Then a list of all hospitals worked, in this format you can list more than one on one line. There are a dozen resume books just for nursing, and innumerable ones for resumes. If you go to Google images and search for nursing resumes, you will come up with many samples (mostly inappropriate in my opinion as they are designed for permanent staff positions). Pantravelers.org has samples specific to travel which may get you a better idea. Look under Resources>Download for them (I believe a free registration is required).

Ignore the cops. If they issue a ticket, take it to the courthouse along with a copy of your contract. You should be able to get it settled without an actual court date. It is not in the best interests of the State to incur the costs of a formal court appearance for something that will be thrown out on the basis of your evidence. Ignore also the threats that you will have to return in three months. You do not. You can present evidence by mail. In addition, if you are out of state, that is more evidence in your favor, and they cannot touch you out of state unless you return. California has every right to defend tax and fee collection and as noted, a number of California residents register their cars in Nevada or Oregon to avoid the high costs of car ownership and insurance in California. California is the most aggressive state I know of in this regard, even to posting an 800 number to call on billboards to report out of state cars in your neighborhood. The rules are clear, but the bottom tier person, the cop, may not understand them. California also has a much misunderstood rule on a presumption of residency if you spend 9 months in California. This is also not relevant for travelers, but you do often have to fight this presumption.

Agencies do not charge 70 to 100 dollars an hour. The norm is more like 50 to 62 an hour depending on location and specialty. But why would you want to undercut your competition? Get what you are worth! I have always been the highest paid traveler at every hospital I go to. The reason is that I do not have the limitations of regular agencies, I can negotiate just for myself as I am not trying to compete with other agencies to provide many nurses. And they cannot obtain my services from any other agency. This allows me much more flexibility to structure my contract to meet the hospital needs. If your skills are valuable and you are a consummate professional, you are a valuable commodity, not the warm body of the usual agency placement.

I may be looking for capital myself in a few months. Your choices are pretty much as you have outlined them. -Line of credit - has to be secured with assets -SBA guaranteed - tremendously invasive and intangible assets (skills and past record) are important -Angel investors - best way to go, but you really have to sell them on your business -selling shares - friends and family again. With this choice, they are not only sharing risk, but potential gain too. -venture capitalists - they will examine your business plan very closely, which is an advantage similar to the mentor you probably should have. They will probably make more from your business than you will but will not be interested unless they can flip their shares for a good multiple in 5 to 7 years. In addition, your business needs to be proprietary and not easily copied. If you are interested in an ongoing business that you control, vc is probably not the way to go. Here is one final option if your needs are less than $25,000 (mine are 20 to 40 times that), prosper.com offers unsecured loans from individuals in an eBay sort of way. Very unique! You must repay in three years. I'm a long way from determining how much I will need. I might be able to swing it myself, but don't want to put all my assets at risk. I have pretty good odds of raising what I need from friends and family and some with networking.

1099 employee is a common expression. Google it for thousands upon thousands of hits I used it for clarity in this conversation. I use the word contractor in all of my contracts. My contractors are required to carry their own insurance. I'm well aware of the risks of pass through workers comp. As I said before, this is the risk that makes it advisable for hospitals to contract with corporations. So far as I have said, no one has asked or otherwise verified that I am a corp although they would be well advised to. This does not eliminate their risk completely though. If for example I go bust and my subcontractor is hurt at work. I've been in business for over four years, currently own three businesses and am starting one more. I have real world experience on the ground starting a small business, your credentials in larger businesses do not impress me. You are a consultant? Ask any nurse how impressed they are with various consultants who come to hospitals and lecture from lofty levels. I have done plenty of research and am debating you from my actual knowledge base. An Inc 500 company is far removed from how to run a small business and would be right to laugh at how we run our businesses. Different risks completely. The business I am about to start is a rather large one and will have staff employees and none of the advice I am giving here is pertinent. Nor is your advice. Dang, it sounds like you are agreeing with me while you say you disagree! OK, name one source of liability exposure for a sole practitioner without business premises that incorporation will protect personal assets. Not for personal professional liability it hasn't. Whether a hospital or other employer is also liable is another story. People can and do sue for anything, whether sustainable in court or not. But that has nothing to do with the risk of being a sole proprietor or carrying the proper liability insurance. AAS by the way is fully owned by HCA. In any case, I'd like to know what the legitimate basis could be for suing a staffing agency. I can think of some scenarios, however they are unlikely. No argument here about this elementary advice (never mind that there are tens of thousands of business owners who disagree), however for the umpteenth time, the question is about starting as a sole practitioner, and this advice is irrelevant. I am not arguing about the real advantages of incorporation, I'm incorporated myself. And it is intimidating to most people although relatively easy. But statement that it is not necessary to start off incorporated is completely valid. So is the fact that sole proprietors have much less work to do when they cross state lines. I'm still waiting for evidence that sole proprietors have to register when they work in other states, had a bit of a laugh about a high powered business consultant saying that myself. You will have to share this with your agency owner friend. Just to cover my bases, some states do require agencies to register with the board, however this is the exception rather than the rule, and is specific to nursing agencies.

By the way Eddy, I just realized something about every single hospital contract I've done. Not one hospital has ever used a corporate identifier on their contract. So every single hospital I've signed a contract with has also committed a "crime". I guess I'm in good company with my practices in case anyone ever wants to prosecute me!

We agree on many things apparently but some of what you are saying is just wrong. I'm not sure who you are giving advice to, but the post I most recently replied to wishes to start off contracting personally. Large business advice is inappropriate, particularly when incorrect. There is no corporate shield available for your own professional liability. This is indisputable. If that was so, it would be easy to set up corporations with no equity and not bother with insurance at all. That is not the case. I meet many locum docs who operate as sole proprietors. They have insurance because they know it is needed regardless of the type of entity. The major reason that sole practitioners incorporate at all is for benefits. Which is why I did it. I'm not sure why it matters, but I do have employees. 1099 employees. I do not have W-2 employees because the risk is much higher in regards to workers comp and unemployment. The liability risk is negligible. Not sure you understand that. Do you know any nurses who have been held civilly liable for their actions? It would be remarkable if you did. There is a reason why nursing liability insurance is so cheap, there are no claims. Go one step farther, have you ever heard of an agency being held liable for a contract nurse? I never have. The insurance that I do carry is only to satisfy hospital vendor requirements, I know that otherwise it is just money down the drain. Sole proprietors can operate across state borders much more readily than corporations. That is a major advantage of a sole proprietorship for travelers. Many business books mention just this about choosing a business form. Incidentally, corporations are state creations. There are no federal laws controlling use of names. It is state law that primarily governs corporate actions. That is the reason so many large corporations choose to incorporate in Delaware, corporate case law is more complete there than perhaps any other state and it is easy to settle corporate issues in their courts than any others. Finally, as a matter of fact, I know many nurses who contract themselves out to hospitals. Many are sole proprietors. I hate to just say I know better than you, but you've never done this and do not understand small business issues and practices. I've been doing this for four years as both a sole proprietor and a corporation and I understand the laws and the risks, and when I talk to other agency owners (some quite large) they seem to be on the same page as I do.

Are you a healthcare professional? There is no corporate shield available for professional liability. If you harm a patient, your personal assets are on the line period. Just as they are as a normal employee of a hospital (who is also incorporated). Insurance is needed. Yes, if you use employees or have business premises, incorporation can shield you from some types of liability. However, that has never been absolute, and post Enron there is much more responsibility on corporate officers on how business is operated and personal liability for corporate practices. For example, if you knowingly send an incompetent nurse out on contract and a patient is harmed, you can be held civilly and even criminally responsible. Insurance is needed. True, so what? You still need insurance to manage your risk, just as does a corporation. I've said this to you in the past and I will say it again, most small businesses in this country are sole proprietors, even some mid sized employers. It is a valid business model. I'm not fooled and it is a company policy. But you are right that the rate is adjusted for employees actually working. However, your advice is misplaced. I am talking to someone who will start by only employing himself. No other nurses involved. Can you cite a source for this remarkable statement? If a sole proprietor contracts with a hospital and does not state that he is a different entity, how could that fact void the contract or collection? Technically true, but you are living in a cave if you think that there are not other practices out there. The fact that multinational companies and some of the large travel companies do not identify their corporate status on their documents gives me great confidence that there is little risk in this practice. The real risk would be the other direction, a sole proprietor representing himself as incorporated. However that too would not by itself invalidate contracts made and performed to specification. Again, can you cite a source for this remarkable statement? Hospitals have hundreds of vendors and I can promise you that they do not do any sort of due diligence on most. They do validate competencies and credentials of every individual healthcare practitioner they employ or contract, perhaps this is what you are referring to. Yes, some hospitals do OIG. Takes about 10 seconds online. Recently, hospitals have been requiring me to supply them with a report (which would seem to break a chain of custody to me). That goes right along with the insurance credentials I also have to send them. Perhaps this is the due diligence you are referring to, looking at my documents? They certainly do not call my insurance company or the state workers comp board to ensure I'm operating legitimately. Another remarkable statement. No reason to register as a sole proprietor in a state where you don't have a physical presence. If that is true, a company selling widgets would have to file in every state they send an order to or a salesperson. Just not true. But if you care to cite any state site that lists such a rule or a page with a mechanism for filing such a status, I'd be happy to stand corrected. Of course, I must withhold taxes appropriately for the work state, perhaps that is what you are calling registration? My risk and that of many thousands of other companies. It would be a civil offense, not criminal though. And I manage my liability with insurance, just like any other responsible person or business. All business decisions carry risk, it is up to the individual owner how to manage that risk. The experience of very large businesses and very small businesses are very different and require different approaches. Risks are also very different. Large companies can have whole departments related to corporate compliance (especially if publicly held), one person operations cannot afford or need this. If you want to advise a one person shop that they need to spend $5,000 a year to cross their t's, that is fine. But until you live in our shoes, your advice on how large companies manage their business is ill advised.

Oh yes! Well under a $1,000 is all you need for insurance and possible incorporation costs (optional). Maybe some accounting software as well. And you have more than enough cushion to pay for your living expenses for a couple of months.

While I don't disagree with you about the benefits of incorporating, an large portion of small businesses do not (it is a rare one with over 50 employees though). A sole proprietorship is a "true" business entity and can get appropriate insurance. I did it, and worked for a number of hospitals without a problem. Theoretically, they prefer to work with corporations if they know the real risks, but I can tell you from personal experience not one hospital has asked and I do not say Inc. on any of my paperwork before or after I incorporated. Nor as far as I know has any of them done any sort of due diligence on me. Hospitals have in the range of several hundred vendors (often 20 of them just staffing agencies). I don't know how they could do due diligence on each one. It is easier to do business across state lines as a sole proprietor. That is a fact! No need to register your corporation in every state you do business in. That can get not only expensive but incredibly cumbersome for a small business. Granted that many small corporations fly under the radar (as do I) but that is not technically legal. There is certainly no reduction in work load for a corporation so I'm not sure where you are coming with this claim. I have to do 8 tax returns a year now!

I'm going to have to disagree with both your points. There is no requirement to incorporate (and it is actually easier to staff nationwide without incorporating), and having been a staffing agency for over four years, I have never heard of a staffing license. Perhaps for staffing non licensed personnel? I only know of two states with specific requirements for nurse staffing. WA requires registering your agency with the BON (although I have no idea if agencies actually do or not or how they might enforce it). RI requires a physical presence in the state. Other than that, nothing I know of!

The pay cycle is what you set, but 30 days is standard business. Also standard is charging 1% per month interest on unpaid balances (which is killer money if you don't depend on cash flow). Of course, someone actually has to work before you can invoice, so that would be close to 6 weeks before cash actually starts coming in. Factoring costs can be 7% (from what I hear) down to 3% for rock bottom really good client deals. You might want to consider starting small, learning how your business model works with low risk, and then scaling up if it seems feasible. Much better than jumping off the deep end. I've never even had to consider such things as a factor.

There are no insurance requirements by state, only by hospital. However it is pretty standard stuff: 1/1 million general insurance including fire and water; and 1/3 million professional liability.