Benefits of Offering a 401(k) For Your Dental Practice

There are many reasons why you may not already offer a 401(k) plan through your dental practice; concerns about cost and complexity of running a plan, questions regarding whether your practice is even big enough to need a 401(k), and worries about fiduciary responsibilities are all common reasons employers cite when asked why they don’t offer a retirement benefit to employees [1]. But here’s the reality: there are 401(k) providers in the market that specialize in operating small business plans and design their services around alleviating the concerns small business owners have. Whether you have one employee in your practice or 100, there are cost-efficient 401(k) plan options out there that can be customized to fit your business needs, help minimize your administrative duties, and limit your fiduciary responsibilities.

Not to mention, as the head of your practice, your employees are counting on you to help them financially prepare for the future. You’re also going to need to replace some—if not most of—your own pre-retirement income when you reach retirement age, and offering a 401(k) plan for your practice is one of the most advantageous ways to do that.

Top three reasons employers don’t offer a 401(k) plan statistic
  • Think company is not big enough (54%)
  • Concerns about cost (42%)
  • Employees not interested (18%)
401(k) plan access for employees of small businesses

Only 60% of small businesses offer a 401(k) or similar retirement plan to employees, yet 81% of workers agree that retirement benefits offered by a prospective employer are a major factor in their final decision when job hunting.

  • Tax deductions for the employer

There are a variety of tax deductions and credits dentists can take advantage of when starting up a 401(k) plan for their practice. If your practice hasn’t had any type of retirement plan for at least three years or you are starting a 401(k) plan for the first time, your practice may be eligible to receive a tax credit that covers up to 50 percent of the startup and administrative costs, up to $5,000 per year, for the first three years of the plan.* Plus, any matching contributions made to employees on behalf of the business are a deductible expense, up to 25 percent of total participant compensation. 

  • Attract and retain top talent

It’s no secret that many American workers expect to be offered a retirement plan to save in as part of their comprehensive benefits package. In fact, doctors may be missing out on top talent by not offering some type of retirement benefit to employees of their practice; more than 8 in 10 workers agree that retirement benefits offered by a prospective employer are a major factor in their final decision while job hunting [1].

  • Plan design options allow for flexibility to fit business needs

A 401(k) plan offers added flexibility in plan design compared to other retirement plan options, allowing employers to add Safe Harbor provisions, profit sharing options, etc. Plus, 401(k)’s offer enhanced contribution options for owners and other highly compensated employees—which may be especially intriguing for dentists who run their own practice—as well as payroll integration options to help streamline benefits processes. 

  • Help your staff (and yourself) financially prepare for retirement

Experts recommend saving 10-15 percent of gross income for retirement, but that can be hard to do in an Individual Retirement Account (IRA) or other types of retirement plans that have low contribution maximums. One major benefit of 401(k) plans is that they boost the highest contribution limit among any type of retirement plan, allowing plan participants to save up to $19,500 in 2021, plus an extra $6,500 in catch-up contributions if they’re age 50 or older. 

Learn more about the hidden benefits of 401(k) plans

Five things to look for in your practice’s 401(k) provider

Dental practices can vary in size quite drastically, which may leave some doctors feeling like they aren’t qualified to run a retirement plan for their employees. But studies show that most 401(k) plans for dental practices actually contain fewer than 25 participants—and even further, about two-thirds of those plans contain ten or fewer [2]. Clearly, practices of any size can offer a 401(k) plan for employees, but it’s important to find a provider who specializes in small plans and can help take some of the responsibilities of being a plan sponsor off of your plate. Here’s what to look for:

  1. Flexibility in plan design

We’ve already mentioned how 401(k) plans allow for maximum flexibility in plan design, so make sure you choose a 401(k) provider that offers the features you’re looking for. Whether you want to add Safe Harbor provisions or are considering various matching contribution options, your 401(k) provider should be flexible in helping you design a plan that fits your practice’s needs.

2. Upfront pricing

You and your employees should feel comfortable while investing in your future—and hidden fees can make participants and plan sponsors alike uneasy. Your 401(k) record keeper should provide completely transparent and upfront pricing, so you and your employees know exactly what the plan’s fee structure is before any contributions are processed. 

3. Easy-to-use website

One of the most important parts of a successful retirement plan is participation, so your 401(k) provider should make it as easy as possible for participants to get enrolled and start contributing. Participants should be able to sign up and manage their account online, and the website should be easy-to-navigate so participants and plan sponsors can find necessary forms and account information.

4. Knowledgeable and helpful Customer Care team

Chances are you’re not a retirement professional—and certainly, you aren’t solely focused on running your practice’s retirement plan. Your 401(k) provider should offer access to a Customer Care team that’s available to help you and plan participants navigate the path to retirement readiness. Some providers, like PAi Retirement Services, will even go as far as offering first year end plan support and perform applicable non-discrimination testing on behalf of the plan sponsor.

5. Financial education available

Investing and financial jargon can be overwhelming, so many employees in your practice may not know where to start when it comes to investing and saving for their future. Choose a provider that offers robust financial education and support for both plan sponsors and plan participants—and a plan, like PAi’s CoPilot Prime 401(k), that includes personalized education, fast setup, and easy plan management. With CoPilot Prime, you can focus on running your business while PAi focuses on running the retirement plan, giving you more time to do what you do best: take care of your patients and grow your practice.

With actively managed accounts, fiduciary protections, and access to an award-winning Customer Care team, CoPilot Prime offers a viable option to dentists considering starting a 401(k) plan for their practice. To learn more about CoPilot Prime or the other CoPilot retirement plan options available, contact PAi Retirement Services at 800.236.7400, Option 1.

Sources:

[1]19th Annual Transamerica Retirement Survey, Transamerica Center for Retirement Studies, 2019.

[2] 401(k) Benchmark Report, ALM Intelligence, 2018.

* Requirements for this credit include:
– Has less than 100 employees
– At least one non-highly compensated employee must be participating
– Employer must not have sponsored a qualified plan in the last three years

Choosing a Dental Lab? Ask These 5 Questions First

Choosing a dental lab can be difficult. Communication is key to your relationship with a lab. Here is a list of questions to ask a prospective new laboratory before starting a business relationship. Narrowing the list to five questions was difficult, but as you will see, there are many additional questions within each category. While some of these questions may seem harsh, most labs will appreciate your honesty and direct approach toward forging a new relationship by addressing these issues upfront.

#1 “Do you use FDA-approved materials?”

This is important because you want to make sure all materials the lab uses are manufactured by reputable companies when choosing a dental lab. For example, some labs “brown bag” metal shot from a guy on the corner who makes his own copy of another manufacturer’s alloy for a fraction of the cost. When you ask for a high-gold crown, and the lab gives you an incredibly low price, you must question how this is possible. Quite often, nonprecious or other substitutes are used and passed off as the alloy of request to keep the costs down and increase profits. To ensure you are getting quality alloy, request the IdentAlloy®sticker from the manufacturer to be applied to all the invoices to certify what was used on the case.

In the case of brand name crowns, such as the many different zirconia crowns on the market, you want to know if the lab is an authorized lab for that product and if they are using genuine material. For example, is that a genuine Procera crown or Lava crown, or is it an imitation zirconia crown that costs a fraction of the price but is being passed off as the real thing? 

Remember, if the lab is offering a product at a much lower price than every other lab for the same thing, chances are it isn’t the same thing. The number of authorized Captek™ labs in the country could not produce the number of crowns being sold as “Captek.” Many labs will just cast yellow gold copings, bake porcelain on it, and call it Captek. You can contact any company and question whether that lab is an authorized user of that product.

#2 “Do you use genuine manufacturer parts and hardware for implant restorations?”

As with alloy, genuine implant manufacturer parts must be used on your restorations unless you request otherwise. There are many copycat implant manufacturers on the market today. Some make decent parts, while others are noticeably inferior. If you choose to use imitation parts, that is your prerogative. But if you ask for a genuine Nobel Biocare™ bridge and the lab uses a knockoff, that is a severe offense. The manufacturer’s warranty is voided, and you will be responsible for a full charge on the remake. If the implant failed, the surgeon or periodontist would be accountable for the new implant. It is not uncommon for labs to use plastic imitation components and pass them off as genuine. Just as you might question the ethics and reliability of a competing dentist who charges one-third of every other dentist’s fee in the area, you must ask how a lab can offer any implant restoration at such a low cost. If you want to save money on parts, the way to do that legitimately is to get your account, buy your parts, and supply them to the lab to use. You may even be able to get a discount on the parts.

#3 “How do you perform quality control checks on your work?”

How does a lab make sure you are getting a good piece of work? If the turnaround time is swift, you must consider when that lab owner or technician will check the result. For example, when choosing a dental lab, consider what it takes to make a single porcelain-fused-to-metal (PFM) crown: The models need to be poured, “Pindexed” (or similar system), and counter models poured and mounted. The dies must be trimmed, die spacer applied, then waxed to correct contour. A sprue must be added, then placed on a base. Since it makes more sense to group wax-ups in a casting ring, a technician will wax more than one case and invest them all for overnight burnout. Is there someone in charge of quality control on these wax-ups to ensure that the wax-up is correct?

The ring will be cast, divested, and finished. Is there someone who makes sure that the coping is completed correctly to the exact specifications and desired alloy? The coping is cut back and opaqued to the desired shade. Finally, the ceramist will apply the porcelain. A final quality control day is required. If something needs to be adjusted, fixed, or remade, an extra day is more helpful. 

An average lab will take at least seven to eight days to do this entire work, not including the pickup. If a lab is taking three to five days for a single PFM, how does quality control happen? How is the work being performed? Does the lab have full-time employees or subcontractors who come in after-hours and knock out a few units? Is the work performed at the lab? Find out how many technicians work at the lab, and ask if they all work full time. A consistent team of technicians supplies a consistent quality of work. If the lab allows after-hour technicians to come in after their workday at another lab to do a few units, consistency and quality will suffer.

#4 – “Do you send your work offshore?”

Many labs send their work to China, Korea, India, the Philippines, Mexico, Costa Rica, or any other country with low labor and production costs. They do this without telling the dentist. These countries do not have the FDA or ADA compliance laws to ensure that approved materials are used. 

Lead-laced alloy and porcelain on PFM crowns have already been reported in this country in the last few years. The patient’s and the dentist’s health — who inserts, grinds and adjusts the crown — are at risk with these contaminated crowns. The labs can get crowns as low as $29 from overseas labs and resell them at a lower rate than other American labs, but still at a significant profit. Some labs advertise this fact and offer low prices to the dentist. When choosing a dental lab, ask yourself how a crown that contains palladium, gold, or silver alloy, ADA-approved materials, porcelain, and that is made with quality craftsmanship cost less than $150? Many labs do not tell you they are sending the work overseas; they pass it off as their own.

#5 – “May I inspect your lab?”

Ask, and then do it! Meet the lab owner and the quality control guy. Meet the office staff. Take a tour of the lab. Is it clean? If this is a quality-oriented lab, then the facility should follow suit. Why would you accept a dirty, pumice-covered, chaotic mess of a dental lab instead of a professional-looking establishment when you are choosing a dental lab? You should examine the work pans and look at the work coming in and going out. Are the pans covered in plaster and the models and articulators sloppy and dirty? Do the impressions look like the kind you would send? Are the work desks neat? Do the technicians take care of the equipment and respect their tools? Ask if there is an inventory closet or area where they keep their implant hardware. Take a look and see if they stock genuine parts. Ask to see all the pans. Look for a wall or shelf that has many empty pans with prescriptions in them. Ask why they are empty. Chances are the work has been sent offshore to be completed by another lab.

Talk to the owner and see if you get along. 

The key to the dentist/lab tech relationship is just that — it’s a relationship, not unlike a marriage. You will work together through thick and thin, so you must have a rapport with each other to be able to talk about anything without fear. The lab owner must be able to call and question a bite, a die, or any discrepancy in your impression or model without fear of an argument or losing you as an account. You must be able to suggest tighter or looser fits on crowns and question overall quality without fear of a fight. If you have an understanding, you will have many years of a great working relationship.

Transition Safely After Choosing A Dental Lab

  1. Don’t send all your work in one shot. 
    Send a few cases one at a time and build the relationship from that. – At Zircon Lab, we offer three free coupons for any crown to be used at any time. 
  2. Do not send failed cases from a previous lab.
    It is not fair for the new lab to be held accountable for another lab’s case, and even though you say you won’t, you will judge their work on this case.
  3. Feel each other out to make sure the owner knows what you want, and correct the lab when something is done wrong.
    It would help if you had a foundation for a relationship between the fifth and tenth case. If this does not happen, you may not be compatible; maybe you are not meant to work together. If that is the case, leave on good terms. You never know in a few years you may meet again, and circumstances may have changed; this lab may be able to give you what you were looking for the first time.

By Steven Pigliacelli, CDT, MDT

At Zircon Lab, we only use FDA approved materials and genuine manufacturer parts and hardware for implant restorations. Every case is quality checked before shipping. All of our restorations are custom designed and handmade in the USA by highly trained and experienced technicians. We are always open to any dentist visiting us to take a tour of the lab. Zircon Lab believes that quality work plus exceptional service equals beautiful results.

Retirement – Are you Planning For Your Future?

Planning and saving for retirement doesn’t just happen independently; It takes a lot of planning, commitment, and most importantly, it takes money.

It’s a proven fact that less than half of Americans know how much they need to retire. Some businesses do not offer 401K plans, which can affect your plans for saving. Whether or not your company offers a 401k plan, you must set goals, start saving and keep saving.

If you’re not currently saving, start small and work your way up. Make saving for retirement your number one goal, and remember it’s never too early or too late to start saving. You will more than likely need at least 90% of your preretirement income to maintain your standard of living when you retire. Once all of your debt is paid off, and your employer offers a 401k plan, or you go elsewhere to invest, make sure you contribute all that you can.

Over time, compound interest and tax deferrals make a big difference in the amount you will accumulate. Find out how much you will need to get the full contribution from your employer. Once you build your retirement savings, never touch it. Life happens and can become difficult at times, but never fall back on your retirement no matter what you do. You will lose principal and interest and might end up paying withdrawal penalties. If a change in jobs happens in your future, make sure that you keep your savings and roll them over into your new employer’s retirement plan or an IRA.

When you open an IRA, you have two options, Traditional or Roth. IRS’s can be an easy way to save in addition to your 401k plan. No matter what methods you choose to start planning and saving for your retirement, you must remember that it takes goals, commitment, and money.

Bill Pay – How To Collect Outstanding Debts

It’s always best to encourage your patients to pay at the time of service. Many staff members can become nervous or uncomfortable when asking patients to pay their bill. 

Recruit The Right Staff

It would be best if you had someone with a strong and confident personality to get the payments at the time of service. It’sIt’s crucial to have a system that works in your office. 

Discuss Bill Charges Before Procedures

Communication is the key to getting your payments on time. Ensure your staff is explaining to the patient precisely what services they will be performing, how much everything will cost, and most importantly, confirm that the patient is accepting your treatment plan and prices.

  • For example, Your staff should never tell the patient they are due for x-rays and perform the service without confirming that they are comfortable with the extra expense.

Active Communication is Always Better Than Passive

Display signs in your waiting room explaining to the patients to please update any insurance changes pay at the time of service, or please prepay before your appointment is not acceptable. 

These signs will ultimately take away from the communication between your staff and your patients. Inform your patients what to do at their appointments. This is why you pay your team. 

Ask & You Shall Receive 

The most effective way to receive your payment is to have your staff ask for payment after rendered services. 

The staff member asking for the payment should always be prepared to present the bill to the patient and explain all services and costs. If the patient is unable to pay in full at the time of service, always have options for a payment plan ready to discuss in private with the patient. Remember, some payment is better than none, always try your best to accommodate the patient with affordable payment plans if necessary.

Offer Many Ways To Pay 

Always accept all major credit cards, checks, and cash. Make the process as convenient and straightforward as possible for the patient.

Protect Privacy

It is crucial to respect your patient’s privacy. Make sure your office allows complete privacy between your patient and your staff member asking for the payment. Have a staff member escort the patient to the front desk after their completed exam. 

It’s never easy to discuss money, but clear and direct communication will improve your dental office’s financial situation.

10 Dental Lies That Need To Stop in 2021

As humans, we tend to believe things that are not necessarily true because they fit our view of the world. Even one dental lie or innocent self-deceptions may seem harmless but can be very costly to professional practice in time, money, and satisfaction. As advisors to dentists, we have found the following to be the most common “lies” dentists tell themselves:

Dental Lie #1. “I am a doctor, not a business owner. Success is guaranteed.”

Many dentists struggle with the challenges of owning a business. Some will proudly tell you that they didn’t become a dentist to profit, but rather to help people treat dental diseases. Being a financially successful dentist and being a good doctor is not mutually exclusive. To be there to treat your patients, you or your employer must make a profit. In today’s world, you must devote time to the business side of your practice.

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Dental Lie #2. “Budgets are a waste of time. I check whether I’m doing better than last year.”

Just the sound of the word “budget” sounds confining and restrictive. We all want the freedom to spend as we please. Ironically, when budgeting is proactive, the process “frees

up” money that tends to get wasted. Budgets provide the dentist with three significant benefits:

  • Budgets set revenue and expense goals. Studies have shown that people are more likely to accomplish written goals than those that are not.
  • Budgets ensure the efficient use of resources. Setting and reaching revenue goals ensures that cash is available to meet all obligations. Expenditure goals ensure that resources are directed toward those activities that will move the practice forward toward a well-defined goal. Finally, a dentist is less likely to impulse buy because expenditures have already been budgeted. 
  • The budgeting process helps the dentist internalize the practice goals, resulting in better practice management decisions.

Depending upon last year’s numbers, managing one’s practice is like driving a car by looking in the rearview mirror. Start budgeting and experience freedom.

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Dental Lie #3. Scheduling for production is all about money.

One of the most dramatic improvements you can bring to your practice is to learn to schedule for productivity. Often, practices confuse being busy with being productive. Scheduling for productivity is about time management. A sound scheduling system maximizes the efficient use of both doctor and staff time. Done well, scheduling can reduce patient’s and staff’s stress, improve patient satisfaction, and reduce the time a patient will need to spend in your chair. A few dollars spent with a qualified consultant can pay big dividends.

“One of the important lessons doctors must learn is that each and every one of their staff contributes to their success or failure. […] Being appreciated is one of the top reasons employees continue to work for a particular employer.”

Dental Lie #4. “I have more important things to do than plan my equipment purchases. I can wait until it wears out and then buy what’s currently “hot” at the dental convention.”

Planning equipment purchases seems like a mundane task. However, the money saved by doing this planning can be pretty exciting. Most practitioners finance the purchase of dental equipment if the amounts are significant. However, by planning and saving rather than borrowing, the results are positive and dramatic. If a dentist expects to acquire $50,000 of dental equipment in three years, merely setting aside the funds in an equipment reserve account can save $8,200 (assumptions are 5% rate of return, 40% tax bracket, 7.5% interest rate, 60-month repayment term for equipment loan). Money-saving ideas occur when the dentist develops and works a good business plan in partnership with an accountant that understands the dental industry.

Dental Lie #5. “Staff is all overpaid and don’t appreciate their job – or me.”

One of the most critical lessons doctors must learn is that every one of their staff contributes to their success or failure. Studies have shown that 68% of patients that leave your practice do so because of something your team has done. It would help if you created a culture where everyone works towards practice success. Being appreciated is one of the top reasons employees continue to work for a particular employer.

Dental Lie #6. “Leadership training doesn’t apply to our practice. We’re all professionals and know what we’re doing.”

How would you feel if you were boarding a flight to London and overheard the pilot say, “We don’t need a flight plan today; we can just ‘wing’ it?” Most people would feel nervous and uncomfortable because they want the pilot to know the best course, be aware of bad weather, and anticipate air traffic conflicts, so they arrive at their destination safely and on time. Likewise, patients and staff want the dentist to have a clear idea of where the practice is going and assume a leadership role. When everyone is pulling in the same direction, astounding results occur. If each person on your dental team cannot be articulate and enthusiastically support the practice goals, the practice has a leadership vacuum. You are the person responsible for filling that vacuum. Improve your leadership skills, and your practice performance will soar.

“Waiting even five years [to plan for your retirement] can cost you a large amount of money, and putting off funding retirement indefinitely will most assuredly put your ability to retire at all in jeopardy.”

Dental Lie #7. “Staff meetings are a waste of time and money.”

One of the symptoms we see when a practice is struggling is the lack of communication between doctors and staff. Well-run practices understand the value of staff meetings. Staff meetings take several forms. Each day should start with a morning huddle to review the day about to take place. At least monthly, the practice should set aside a couple of hours for a full staff meeting. The staff meeting is an excellent opportunity for training, problem-solving, reviewing systems, and holding team members accountable.

Dental Lie #8. “Our practice is not experiencing any problems. We can afford to coast.”

After working hard to build a practice, a dentist must guard against complacency. Little thoughts creep into one’s mind, “Everything is going well. I think I’ll coast for a while. I deserve it.” In times past, people manufactured horse-drawn carriages, steam locomotives, slide rules, and typewriters. Today all of those once-useful products are obsolete. We sometimes forget that the world is continuously changing, and if we are not constantly changing, our dental practices become outdated. If your practice looks the same as it did three years ago, it is likely a red flag warning you to innovate, upgrade, and improve. A dynamic business plan will include innovation and improvements. Create or update your project, and use it as a daily guide.

Dental Lie #9. “My bookkeeper will never embezzle my company.”

Of course, we trust our employees; we would never hire a person we don’t trust. Trust is crucial to running a successful business. As prudent business owners, we always insist on honesty and ethical behavior. Despite the best intentions, a substantial number of dental practices (15% to 20% by most estimates) unfortunately experience fraud or embezzlement. To protect business assets while simultaneously maintaining high employee morale through mutual trust and support, a dentist must implement and maintain “internal controls.” Internal controls are self-checking systems that frequently alert the owner whether business assets are handled responsibly. Internal controls can include a record like a day sheet, a procedure such as checking daily production totals against the schedule, or a policy such as “the dentist must always sign checks.” If you are unsure whether your internal controls are protecting you, contact your dental CPA.

Dental Lie #10. “I can wait until later to start funding my retirement.”

We believe the first day a dentist should begin planning for their retirement is the first day of practice. Developing the discipline to save for retirement early is the best way to meet your retirement goals. Consider five different dentists who contribute $25,000 per year towards retirement but started at different ages (35, 40, 45, 50, and 55) and earn a rate of return of 6%. The dentist who begins at age 35 contributes a total of $750,000 and accumulates $1,976,455. The dentist who waits until age 40 only earns $1,371,613. Waiting to start at age 45 only allows the dentist to collect $919,640. Only waiting until age 50 results in only $581,899, and $329,520 if you wait until age 55. Waiting even five years can cost you a large amount of money, and putting off funding retirement will most assuredly put your ability to retire at all in jeopardy. There are many qualified plan choices for dentists today that provide flexibility and tax advantages. Your dental CPA can help you choose the best plan for you to meet your retirement planning goals.

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