Career Corner: Contracting Options Provide Opportunity for Workers and Flexibility for Companies

By: Donna Carroll, VP Business Development & Recruitment, Systems Personnel

There is no doubt that today’s employment market is full of opportunities for the MEDITECH professional. With so many healthcare providers implementing new applications, additional modules, or just upgrading to stay current, the need for skilled implementation specialists continues to grow. However, many organizations cannot afford to increase their headcount with permanent staff. So, they turn to contractors to get the job done.

For employers, the obvious benefits of bringing in contractors are decreased employment costs, increased staffing flexibility, and maintaining budget controls. And, once the project is completed, the contractors (and associated expense) then go away. From an employer’s perspective, it makes great sense to utilize contractors for limited-duration projects.

What about the worker’s point-of-view . . . what makes an individual want to perform contracting? There are many benefits associated with contract work, namely:

• Flexibility in Lifestyle:
  • Control of career path
  • Balance between business and personal obligations
• Potential for Higher Earnings:
  • Higher hourly rate versus annual salary
  • You are paid for every hour worked
• Increase Technical and Professional Knowledge Base:
  • You can increase your portfolio of skills
  • Varied work environments and projects increase your marketability
• Evaluate Potential Permanent Jobs (Temp-to-Perm):
  • Evaluate work scope and corporate culture before accepting employment offer
  • Network with key personnel for future opportunities
• Opportunity to Travel:
  • Provides for flexibility in assignments
  • Local, national, and international opportunities

Now that we know the benefits, let’s explore the potential downside. Like any career option, there are both positives and negatives associated with contracting. Some of the negatives include:

• Inconsistent work schedule (gaps in work between assignments)
• No medical benefits
• No 401(k) or pension plan
• Administrative tasks (billing, collections, tax payments, etc.)

Through my daily conversations with MEDITECH professionals, I’ve learned that the number one reason why more people don’t consider contracting is their need for affordable medical benefits, followed closely by their lack of interest in being a sole proprietor and having to perform all the administrative tasks associated with running a business. In reality, the single largest risk for both contractors and employers is the potential of being improperly classified as an ‘Independent Contractor’ according to IRS regulations. The IRS evaluates the behavioral control, financial control, and type of relationship in order to determine if a worker is an independent contractor or an employee. If a worker is incorrectly classified as an independent contractor, both the worker and employer can be held liable for employment taxes, plus a penalty.

So, how can MEDITECH professionals leverage their high-demand skills and enjoy the great benefits of a contracting career without all of the risks associated with it? Generally speaking, there are three options to consider:

Option # 1 – Consultant Employee
For those who like the idea of being a consultant, but need a steady paycheck and the camaraderie of a team and company behind you, the best option might be to seek permanent employment with a well-reputed consulting firm. In this instance, you would be paid an annual salary and benefits (versus an hourly rate), and would be assigned to a specific client or project by your employer, the consulting firm. Although you would not have to find your own work assignments, you would also have little control over which assignments you accept or decline. There are many well-established consulting firms which provide services to the MEDITECH market: First Consulting Group (FCG), Healthlink Inc. (an IBM company), Beacon Partners, CTG HealthCare Solutions (CTGHS), ACS Healthcare Solutions, and Perot Systems, to name a few.

Option # 2 – 1099 Contractor or Corporation
There are also several smaller consulting firms in the MEDITECH market which are well-reputed. Most of these firms are also well-established, but prefer a lean staffing model and service their clients by engaging independent contractors (paid on a 1099 or corporation-to-corporation basis) for specific projects, as needed. This allows these firms greater flexibility, less overhead, and the ability to offer a more competitive rate to their clients. Some of these companies include: CRH Consulting Inc., Inteck Inc., maxIT Healthcare, and Navin, Haffty & Associates, among others. Working with such firms would be an option for someone who has incorporated themselves as a business, or who legitimately qualifies as an independent contractor (see IRS Form SS-8), and does not mind performing the administrative tasks required.

Option # 3 – Contract Staffing Service Provider
So, what if you like the independence of choosing your own clients and projects, but don’t want to run your own business? An ideal solution would be to find an organization which could act as your employer, taking care of all of the administrative tasks, offering you affordable medical benefits and the option to participate in a 401(k) plan, and paying you for every hour you work plus expense reimbursement (if applicable) on a weekly basis.

There is such an organization which performs this service for thousands of contractors at everywhere from small, local companies to well-known Fortune 500 companies. Top Echelon Contracting, Inc., is a contract staffing service provider for technical, professional, and healthcare contract staffing. Top Echelon Contracting is NOT a consulting firm, nor are they a professional search firm. They do not find work assignments for contractors, nor do they recruit contractors for companies. Their sole function is to handle the financial, legal, and administrative responsibilities associated with hiring contract staff, and they’ve been doing it nationwide since 1992. Contractors become an employee of Top Echelon Contracting, which coordinates everything involved in the employment process including:

• Employment Paperwork and Forms (W-4, I-9, etc.)
• Employee Benefits Administration (medical, dental, vision, life insurance, 401(k), etc.)
• Weekly Payroll funding and processing including:
  • Federal Income Tax Withholding
  • Social Security (employee and employer share)
  • Medicare (employee and employer share)
  • Federal Unemployment
  • State Income Tax Withholding
  • State Unemployment Insurance
  • State Disability Insurance (if applicable)
  • Workers’ Compensation Premiums
  • Year-end W-2 Forms
  • Expense Reimbursements (if applicable)
  • Direct Deposit into Employee Bank Accounts

Benefits to Contractors

Contractors who are employed by Top Echelon Contracting enjoy the following benefits:

• Weekly Paycheck:
  • Direct deposit
  • Applicable expense reimbursement
  • Itemized payroll statements
• W-2 Payroll Tax Withholdings and Matches:
  • Tax withholdings, filings, and matches handled by Top Echelon Contracting
  • Top Echelon Contracting maintains responsibility for government compliance on its employees
• Workers’ Compensation Coverage:
  • Coverage nationwide for approved job descriptions
  • Hotline with access 24 hours a day, 7 days a week
• Human Resources Services:
  • Benefit specialist to answer any benefits questions you may have
  • Employee Handbook with policies and procedures
• Optional Benefits:
  • Three new health insurance plans available (effective July 1, 2007) to employees working an average of 30 hours or more per week
  • Dental Insurance
  • Vision Insurance
  • Life Insurance
  • Accidental Death & Dismemberment Insurance
  • Aflac (Short-Term and Long-Term Disability, etc.)
• 401(k) Savings Plan:
  • Eligible to join at the end of six months of continuous employment
  • Retirement planning tools and investment consulting through Financial Services

Benefits to Companies

Some of the benefits to companies utilizing a contract staffing service provider include:

• Reduce Employment Costs
• Increase Staffing Flexibility
• Reduce Payroll Tax Issues
• Reduce Benefits Administration
• Reduce Unemployment Exposure
• Reduce Workers’ Compensation Exposure
• Maintain Budget Controls
• IRS Protection Against Employee Misclassification

For more information about Top Echelon Contracting, Inc., please visit their web site at http://www.topecheloncontracting.com.

Whatever option best suits your preference, we encourage you to explore a contracting or consulting career. As a professional search firm, I work with companies discussed in all three of the options and have numerous opportunities for candidates with MEDITECH skills from the Clinical, Financial, and Administrative application suites. If you'd like to learn more about contracting or consulting, feel free to call me at 413-258-4511. I’d be happy to listen to your specific needs and help advise you on a career path. All the best! - Donna