PSLF for medical group workers

The Public Service Loan Forgiveness Program provides student loan forgiveness to borrowers who make 120 qualifying payments under an income-driven repayment plan while working full-time for an eligible employer. This usually means direct employment by a government or a 501(c)(3) nonprofit organization.

For health care professionals (doctors, nurses, physician assistants, and other medical staff), this means that PSLF eligibility depends on who employs you and where you work.

Employees of non-profit hospitals, community health centers and public clinics usually qualify. But for medical professionals working in… Private medical groupsthe situation is more complicated. If your group contracts with a hospital rather than being directly owned by it, PSLF eligibility is not always clear.

It’s also important to note that any employee who works in a medical group — including billing, administration, etc. — is still eligible in the same way as doctors and nurses. It simply matters who hires you!

When medical group employees qualify

To qualify for the PSLF program, your employer must fall into one of these categories:

1. American government organization (Federal, state, local, or tribal, including the U.S. military)
2. A 501(c)(3) tax-exempt nonprofit organization Of the Internal Revenue Code
3. Some other non-profit organizations That provide eligible public services (such as public health, emergency management, or public education)

If you are a nurse, technician or administrative staff Employed directly by a hospital or nonprofit health systemIn general, you are qualified. But if you work for a for-profit medical group that contracts with a nonprofit hospital in states where direct employment is prohibited (notably California and Texas), your eligibility depends on whether the hospital or clinic is considered a “qualifying employer.”

The largest medical groups in the United States

Remember, you simply have to work for a medical group (not just a doctor or nurse). Here are the largest nonprofit medical groups in the United States:

• Kaiser Permanente
• The health of the common soul
• Ascension
• Lawyer’s health
• Providence
• Trinity health

It is also worth noting that the Department of Veterans Affairs (VA) is also a PSLF-eligible medical group.

Special rules for California and Texas doctors

California and Texas have long prohibited most hospitals, organizations and nonprofit clinics from directly employing doctors. Instead, doctors typically form medical groups or professional corporations that contract to provide medical care in nonprofit facilities.

Under previous PSLF regulations, this structure made many doctors ineligible, because they were not technically “employees” of an eligible employer—even if they worked full-time at nonprofit hospitals serving the public.

Realizing this problem, the The Department of Education has issued new PSLF guidance(PDF) Which allows certain doctors in California and Texas to qualify under expanded definitions of “employee” and “qualifying employer.”

Eligible employer

For purposes of PSLF, nonprofit hospitals, 1206(l) organizations, and other nonprofit facilities prohibited by state law from directly employing physicians are now considered eligible employers of physicians who provide services there, even though the physician’s salary comes from their medical group or organization.

In other words, the nonprofit facility (not your medical group) must be listed as an eligible employer on PSLF forms.

However, there are limits:

• Contract physicians at public hospitals exempt from this ban (such as UCLA or county hospitals) must be employed directly by those hospitals to qualify.
• Simply holding a recognition relationship or working as an independent contractor does not automatically count.

Definition of employee

Doctors in California and Texas can now meet the PSLF “employee” requirement in one of two ways:

1. Their medical group or professional organization has a written contract with a qualified nonprofit facility to provide care (for example, an exclusive agreement to staff a clinic or hospital department).
2. The physician individually holds hospital privileges or another form of legal authorization to provide care within the nonprofit organization.

Both tracks recognize that “employment” in these countries may take unconventional forms due to legal restrictions.

Full-time employment and proof of employment

As with all PSLF participants, medical group workers (including those covered by the California and Texas exceptions) must meet requirements Full-time service requirements:

• Work rate At least 30 hours per week Through one or more eligible employers.
• He makes 120 qualifying monthly payments on direct loans while meeting this employment criterion.

Borrowers can combine part-time service at multiple eligible institutions as long as their total hours meet the minimum.

What does this mean for medical group employees

If you work within a nonprofit medical group, you will likely qualify for Public Service Loan Forgiveness.

If you are directly employed by a 501(c)(3) or government entity, you are already eligible. If you work for a private medical group that contracts with a nonprofit hospital, your eligibility will depend on whether your employer or work site is recognized as an eligible organization in Department of Education’s PSLF database.

It is a good idea to check if your hospital, institution or practice appears in that database and keep copies of it Employment certificate forms (ECFs) to confirm your condition over time.

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