FAQs: Therapy Source Move to Corp-to-Corp/DBA/W-2

Beginning January 1, 2020, Therapy Source, Inc. will be requiring every therapist to work as an LLC, under a DBA w/ EIN #, or as a W-2. Below, we’ve put together a list of questions and responses to help you to make an informed decision about which option to choose, and how to move forward.

  1. What are my choices?
  • Choice #1:  Corp-to-Corp – Become an LLC OR become a Sole Proprietor DBA
    About these options: If you would like your pay rate to remain the same, you may want to consider one of these options. Getting set up is simple, with a one-time cost ranging from $50 – $280 for a Sole Proprietor DBA, and $125 – $850 for an LLC.
    You’ll continue to pay your own taxes. These options are similar but do have a few differences. You can see a side-by-side comparison here.
  • Choice #2:  W-2 – Become a W-2 employee of Therapy Source
    About this option: As a W-2 employee, your state, federal and other required taxes will be withheld in accordance to your completed W-4 form. Additionally, your Professional Liability and Workers Compensation insurance will be covered by Therapy Source. On average, this will result in an approximately 10% reduction in your hourly rate beginning January 1, 2020.
    To be eligible for benefits such as medical, dental and paid time off, you must first work at least 1,560 total hours for a full calendar year. More details can be found here.

 

  1. What is the definition of a full-time W-2 employee?
    • The IRS Definition of FullTime Employee. For purposes of the employer shared responsibility provisions, a fulltime employee is, for a calendar month, an employee employed on average at least 30 hours of service per week, or 130 hours of service per month. (This does not constitute benefit eligibility. See Employee Benefits Chart  for specific eligibility details).

 

  1. Will my pay rate change?
  • Corp-to-Corp and  DBA: No
  • W-2 Employee: Yes. If you become a W-2 employee, your hourly pay rate will decrease 10%-12%. Your federal, state and other required taxes will be withheld. You will be covered 100% under TSI’s Professional Liability and Workers Compensation policies.

 

  1. Will the cost of my clearances be covered by TSI as a W-2 employee?
  • Corp-to-Corp and DBA: No, you will continue to assume to cost of your clearances.
  • W-2 Employee: Possibly. You will be eligible to have the cost of your clearances covered, beginning the first of the month after 1 full year as a W-2 employee (having averaged a minimum of 30 hours per week or 1560 hours per year for that time period). You will be reimbursed up to $200 per eligible year towards the cost of your clearances.

 

  1. Will you offer any training for W-2 employees?
  • Corp-to-Corp and DBA: No
  • W-2 Employees: Employees will receive the required company training, but will not receive professional training. There will be a flat dollar amount offered toward required continuing education training if you are eligible. You will become eligible the 1st of the month after 1 full year of service (having averaged a minimum of 30 hours per week or 1560 hours per year for that period.)

 

  1. What happens if I don’t work in the summer? Can I file for unemployment?
  • Corp-to-Corp and DBA: No
  • W-2 Employee: Yes, you can apply for unemployment. The state where you live/work will determine your eligibility.

 

  1. What happens if I don’t want to accept an assignment offered by TSI? Will I be terminated?
  • No, you will not be terminated.

 

  1. Will TSI provide me with testing materials for the position in which I’m placed?
  • Corp-to-Corp and DBA: The Loaner Library process will continue as it is currently.
  • W-2 Employee: You will be able to check out testing materials from our Loaner Library at no charge. All client requests for materials that are not in our Loaner Library must be bought to the attention of your Account Manager. Materials must be returned in a timely manner or you will be charged the full replacement cost.

 

  1. Will family members be eligible for benefits?
  • Corp-to-Corp and DBA: Not benefit eligible.
  • W-2 Employee: At their one year employment anniversary, if an employee qualifies (meeting an average of 30 hours per week for a full year or 1,560 hours annually) and enrolls in medical, dental, vision and certain voluntary benefits, the employee can also enroll their eligible dependents at the associated costs. Employee contribution will be deducted from the employee’s paycheck. Premiums are subject to change annually with open enrollment.

 

  1. Will there be a 401(k) plan?
  • Corp-to-Corp and DBA: No
  • W-2 Employee: Yes, employees will become eligible the first of the month after 1 full year of service and 1000 hours. We offer traditional and Roth 401(k) plans.

 

  1. Will employees be covered under Therapy Source’s Professional Liability policy?
  • Corp-to-Corp and DBA: No, you must continue to maintain your own coverage.
  • W-2 Employee: Yes, you will be covered under the company’s policy for any positions into which you’ve been placed by TSI.

 

  1. If I choose to establish a  Corp-to Corp or DBA, what steps do I take next?

 

  1. Will I be eligible for annual pay increases?
  • There are no guarantees of annual pay increases for Corp-to-Corp, DBA or W-2 Employees.

 

  1. How often will I be paid?
  • Corp-to-Corp and DBA: You will continue to be paid monthly.
  • W-2 Employees: You will be paid twice per month (with submitted/approved billing.)

 

  1. Will I be able to speak with someone if I have questions about my caseload or position?
  • Yes, you will be able to speak with your Account Manager just as you do now.

 

  1. As a 1099, how much time will I have to convert to Corp to Corp? What can TSI do to help me get through the process?
  • You can switch to Corp-to-Corp or DBA status at any time. TSI recommends that you speak with your tax advisor for guidance.

 

  1. Once I become a Corp-to-Corp or DBA,  am I restricted from promoting my services to any school that TSI has not introduced me to?
  • No.

 

  1. I would like to select W-2, but I have some wage attachments. How can I be assured that my pay structure and allocations are kept confidential?
  • An employee’s compensation is always kept confidential. Our Finance Director and Manager are the only ones with access to employee payroll.

 

  1. What happens if I have medical, dental or vision benefits through TSI and my assignment ends? Does TSI cover the cost of my benefits between assignments?
  • No, TSI does not cover the cost of benefits when an employee is not on assignment. The employee would be eligible to elect COBRA for benefit continuation. With COBRA, the employee is responsible for 100% of the premium cost plus a 2% administration fee.

 

  1. What do I need to do to remain a 1099?
  • Remaining a 1099 will not be offered as an option. The options will be W-2, Corp-to-Corp or DBA.

 

  1. If I’m receiving Social Security and choose W-2 status, do I still have to pay Social Security and Medicare taxes?
  • Yes, you do. As long as you work at a job covered by Social Security and Medicare your employer has to deduct both taxes from your check and pay its share of matching taxes.

 

  1. If I choose W-2 but have my own liability insurance can I opt out of being covered under TSI’s policy so my hourly rate will not have to be adjusted?
  • No, this is not an option. All employees are automatically covered under the company’s policy.

 

  1. If I’m a W-2 therapist, can I still provide services with other agencies?
  • Yes.