Changing your signed contract is tough to approach. But what if you’ve signed a contract and have a desire to take a year or two off for fellowship or research?
Justin Nabity is in The Doctor’s Life Podcast studios to give you a rundown on looking in to changing your signed contract. All episodes of The Doctor’s Life Podcast are available on iTunes, Android, and on SoundCloud. Make sure to subscribe and you will be the first to get new episodes of The Doctor’s Life Podcast.
What do you do if you’ve already signed a contract and want to take a year or two off for fellowship?
- Negotiate the contract so that termination will be as smooth as possible
- Specifically look at the language in the termination section to see what financial conditions and requirements will be imposed on you
- Try to find what the document says about malpractice insurance at termination. Most contracts say you won’t have any protection after you leave and if you want to continue the insurance coverage, you have to pay for it yourself. In particular it would say you have to pay for the tail insurance.
- Before signing a contract see if you can soften the impact of this provision because leaving an attending income, being saddled with a huge tail insurance cost and then making a low fellowship income is a disaster waiting to happen
- If you are changing jobs, all the points raised above are applicable
What if you are already stuck in a contract that requires to pay for tail upon termination?
- Find out what the cost is to get tail insurance from the current provider your employer uses
- Compare this with several other insurance companies to see if there are better options
- Determine your claim risk level and assess if the same limits are necessary
- Request a payment schedule that is reasonable for your situation
Here’s a real life example of a client who was in this situation:
The contract said she had to work there for at least 2 years before they would share in the cost. The quote for the insurance was over $80k. She had to decide should she go “bare,” extend the current policy or pursue an alternative. We introduced her to a specialist who was able to save her about $26k for a total of $67k. The payment schedule offered was 50% in year one and about 25% for the next two years.
Hindsight is always 20/20. There is a lot you can do on the front end to reduce the impact of changing your signed contract or exiting a contract so we recommend working with advisors who can help you navigate this area.
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Go to the previous podcast episode.
