It’s August and a whole new crop of recent residency graduates can now moonlight for the first time in their Naval careers, so here is a video and blog post that discusses some of the basics of moonlighting.
Should You Moonlight?
I think the answer to this question depends on a lot of things. First, do you envision yourself working clinically when you leave the Navy? For most physicians, the answer to this question is yes, and depending on your specialty you may need to moonlight to maintain your clinical skills. We don’t always get exposed to the full scope of our specialty in the Navy. My wife is a pediatrician, and when she was on active duty I thought she had a full scope pediatric practice and did not need to moonlight to maintain her skills. As an emergency physician, though, it is rare to get exposed to the full breadth of emergency medicine in a Navy emergency department. You have to make an honest assessment of your specialty, the breadth of your Naval practice, and whether you need to moonlight to maintain your skills.
In addition, you need to figure out your motivation for moonlighting. A common motivation is to earn extra money, and that is a fine motivation, but you never want to make decisions that make you dependent on the money. You may deploy, your CO could take away your moonlighting privileges, or you could PCS somewhere where you can’t moonlight. You don’t want to be the bankrupt doctor because you bought a house you can’t afford without moonlighting.
The Navy’s Moonlighting Rules
In order to moonlight you have to get permission from your command. It is a privilege, not a right, and you can lose this privilege if you fail a PFA, don’t stay up-to-date on your training/readiness requirements, or don’t produce academically when required.
If you are going to moonlight somewhere outside of a 2 hour drive, you need to take leave. If you are flying anywhere, no matter the distance, you need to take leave. You can’t moonlight more than 16 hours/week and you need to have 6 hours of time off between clinical periods for your moonlighting job and your Naval duties. You’ll need to complete an annual attestation that says you are aware of these policies and compliant with them. If your specialty makes complying with these guidelines hard, you can ask for a waiver from your command.
Where Should You Moonlight?
If you moonlight locally you don’t need to take leave. If you can find a clinical setting you think you’d like after your time in the Navy is complete, you can even start working toward partnership.
If you work locum tenens, you can travel and sometimes chase “the big money.” If you work enough, the locum companies will cover all of your expenses, DEA, state licenses, travel, hotel, expenses, and malpractice insurance. Because you are likely traveling to a location more than a 2 hour drive away, you’ll need to take leave.
Basic Financial Planning for Moonlighters
Moonlighting allows you to put more money in tax advantaged retirement accounts. If you’re a non-moonlighter, you’d be limited to putting $19,000/year in the TSP and $6,000/year in your IRA (based on 2019 limits). If you moonlight and get paid on a 1099 as an independent contractor, you can fund a SEP IRA or solo 401k up to $56,000/year. It is rare that you’ll hit this maximum because you can’t moonlight enough to earn the amount required to do it, but you will be able to put more away than a non-moonlighter. A SEP IRA is easier to set up than a solo 401k, but a Solo 401k allows more money to be contributed at an equivalent salary. Plus, a SEP IRA messes up your backdoor Roth IRA contribution. For a great discussion on these two options, go to this article, but the bottom line is you’ll likely want to set up a Solo 401k and not use a SEP IRA:
Finally, moonlighters often want to incorporate because they think it provides malpractice protection, but that is a myth. Although there may be some tax advantages to incorporating, it doesn’t protect you from professional liability or malpractice.
If you are going to sign a contract, you are going to need to get some professional help. You should hire a healthcare or contract attorney to review any contract you are considering. You could also consider using a company that specializes in reviewing physician contracts like Contract Diagnostics. There are many issues you need to understand, including:
- Due process or termination clauses – For what reasons can they terminate you? Are you entitled to a hearing with the medical staff before your privileges are removed or restricted?
- Tail coverage – Does your malpractice insurance require tail coverage? If so, who is paying for it? Tail coverage is malpractice insurance that covers you after you stop working for that employer, and it can be VERY EXPENSIVE so you will want to know who is paying for it.
- TRICARE or VA eligible patients – You can’t bill these patients as they are already entitled to your services. This is spelled out very well in the moonlighting paperwork you will file with your command, but make sure your employer understands this.
Here are the Powerpoint slides for the video podcast below: