Independent Contractors (exam 2 - finished editing)

What is the primary difference between a salaried employee and an hourly employee?

- Salaried employees receive a fixed annual salary

- hourly employees are paid based on hours worked.

salaried employees

benefits:

taxes:

schedule:

- health insurnace, PTO, retirement plans, workers comp, unemployment insurance

- employer withholds FICA taxes (SS and Medicare)

- follows employers schedule and workplace policies

hourly employee

benefits:

taxes:

schedule:

- benefits depend on hours worked

- employer withholds FICA, federal, and state taxes (W-2)

- must track all hours worked, clock in and out, timesheets; usually consistent hours

Are salaried workers exempt or non-exempt?

exempt

Are hourly workers exempt or non-exempt?

non-exempt

What is the overtime pay rate for hourly employees in Florida?

Overtime is required at 1.5 times the regular rate for hours worked over 40 in a week.

if census is low in the clinic, with the managers priority of employees?

salaried employees are priority because they get paid regardless, but hourly employees are asked to go home

What is a per diem employee?

hired on an as-needed basis with no guaranteed hours and generally not eligible for benefits.

are taxes still withheld for per diem employees?

yes as a W-2 employee

what is the payment like for per diem employees?

typically high rate due to limited hours

where are per diem employees mostly seen?

- home health

- SNF

- IRF

- some hospital-based OP

what is an independent contractor?

self-employed and provides services under a contract rather than an employee agreement

where are independent contractors most likely seen?

- private OP clinics

- telehealth

- consulting

What is the tax form received by independent contractors?

1099-NEC form

What is the main financial responsibility of an independent contractor?

Independent contractors are responsible for paying self-employment tax and IRS payments; but may deduct business expenses (supplies, mileage, CEUs)

what is needed of an independent contractor for billing?

EIN and SSN

do independent contractors get benefits?

no they must have their own professional liability insurance

do independent contractors always follow all the scope of services in their practice?

not all the time they define their own scope of services through the contract

What does it mean for an independent contractor to define their scope of services?

It means they outline the specific services they will provide through a contract.

what are legal considerations for independent contractors?

- must have an active license

- IRS determines true status

- misclassification exposes agencies to penalties

- non-compete clauses are enforceable in FL

- should form an LLC

what is a non-compete clause?

an agreement restricting an employee from working for a competitor or starting a rival business for a specified period and geographic area after leaving their current job

who should you hire when you are starting and LLC?

an accountant

when starting an LLC, what are some things you will need?

- liability insurance

- medicaid provider # or insurance provider

- BLS

why is liability insurance important to have when starting an LLC?

to have coverage for amounts up to $1,000,000 each claim or $3,000,000 annual collection

What is the National Provider Identifier (NPI)?

a unique, HIPAA-mandated 10-digit number assigned to healthcare providers for billing and electronic transactions.

What are the two types of NPIs?

Type 1 NPI is for individuals, and Type 2 NPI is for organizations.

what is the criteria for type 1 NPIs?

- assigned to individual OT/OTAs

- required for solo practitioners and ICs

- used when billing under your own name

- does not change when you change employers

what is the criteria for type 2 NPIs?

- assigned to group practices, clinics, hospitals

- required for any entity employing OTs

- a single facility can have one type 2 NPIs

- used with practitioners' type 1 NPIs

What is CAQH ProView®?

a centralized online database for healthcare providers (IC) to store credentialing and licensing information.

how is CAQH ProView® beneficial for insurers and health plans?

access to information involving credentialing and licensing information streamlines provider enrollment and re-credentialing

why is CAQH ProView® important for FL practitioners (IC)?

without an active CAQH profile, payers (insurance companies) cannot complete credentialing, which delays the practitioner's ability to bill their clients and receive payment

What is the requirement for maintaining an active CAQH profile?

Providers must re-attest every 120 days to keep their CAQH profile active.

What is the purpose of an Employer Identification Number (EIN)?

used to identify a business entity for federal tax purposes, similar to a Social Security Number for individuals.

Who needs an EIN in OT practice?

- OT private practices / LLC

- independent contractors,

- For-profit organizations hiring OTs

- non-profit organizations / school districts

why does an OT private practice and LLCs need an EIN?

to open the business bank accounts, file business taxes, and fire employees

why do independent contractors need an EIN?

to bill payers under a business entity, and separate personal and business finances

why do for profit organizations that hire OTs need an EIN?

to issue W2s and 1099s to employed OTs and contracted practitioners

why do non-profit and school district organizations need EINs?

for all tax-exempt organizations providing OT services in Florida

What are the benefits of being a salaried employee?

Salaried employees typically have stable income, employer benefits, and tax withholding.

What are the advantages of being an independent contractor?

maximum autonomy, potential for higher earnings, but bear full tax responsibility.

What is the significance of the NPI for OT practitioners in Florida?

The NPI is required before billing any payer in Florida.

what is the difference between NPIs, CAQH, and EIN?

NPI: permanent professional ID number for billing

CAQH: centralized credentialing hub

EIN: business's federal tax ID for ICs, LLCS, or group practice

3 multiple choice options