MSD 1002 Exam 2 (Dinh 2021)

What term is this? - Most the policy will pay out for the policy term (3,000,000)

aggregate

Who can assist w/ lease clauses?

attorney

- Premium is more expensive - Harder to find - If insurer goes out of business, you will rely on guarantee fund to cover you, which usually provides lower limits and less than desirable services/ defense capabilities - Concerns regarding whether the past policy limits are adequate

cons of occurrence coverage

Wat is a big mistake that older dentists make when they are in practice in relation to fees?

do not increase them

- Once the terms are expired and all conditions have been satisfied. - by agreement - by frustraction - for convenience - due to a breach

end a contract

What form does some one fill out if they are doing an excise tax return?

form 720

- length of it - use of facilities - confidentiality of patient info - compensation - expenses - management

issues addressed in contract

Specifies how income and expenses will be allocated among partners duties of each partner termination or withdrawal and how it will be handled. Non-compete/ non solicitation

partnership agreements

Who does not file an income tax return?

partnerships

What's another way someone can embezzle from a dentist?

payroll

What term is this? - the most the policy will pay out to one patient ($1,000,000)

per occurrence

Can cancel at anytime and have coverage for the time you purchased coverage Ease of buisness

pros of occurrence coverage

What should I do before signing a contract?

read every word including the dine print

When do you receive a free tail policy?

retirement, disability,death

What is the danger if there is no non-disclosure agreement?

staff poaching

Fire deductible set amount?

$1,000

What 3 things help prevent embezzlement?

- Back ground checks - Credit checks - Drug tests

What is the Florida worker's compensation premium rate for dentistry?

- Based on payroll - Dentistry: $0.38 per $100 of payroll

What are state and local taxes for small business?

- Income tax - Employment tax

Fraud Triangle

- Pressure - Rationalization - Opportunity

What are the types of malpractice insurance policies?

- claims made - occurrence

Federal Taxes for LLC

- depending on elections made by the LLC and the number of members, the IRS will treat an LLC as either a corporation, partnership, or as part of the LLC owner

What is the cost of the policy premium for cost of disability?

-1.5%- 3% of the gross income

What are the 5 federal business taxes?

-Income tax - Est. Tax - Self-employment tax - Employment tax - Excise tax

What is the most common coverage amount for malpractice insurance?

1 million-3 million

What are the 4 conditions in a work place that provides opportunities for fraud?

1.) Poor internal controls 2.) Too much control given to employees 3.) Lack of supervision by management 4.) Failure to pre-screen employees adequately

3 things to consider w/ elimination period?

1.) Pre-existing condition 2.) Accumulation period 3.) Recurring disabilities and elimination periods

On average how much will hygiene generate in production of a practice?

1/3

What is the average time to finance a dental practice?

10 years

What form do you fill out fill you are applying for estimated tax returns?

1040-ES

How much does a tail policy cost?

150-200% of the premium you paid for that year.

Minimum age for DI?

18

Wind deductible is based off what percentage?

2-5% of the limit insurance you purchase

How much more do smokers pay for DI?

25%

- malpractice - disability - life

3 types of insurances for dentists

1.) an offer 2.) an acceptance 3.) an interaction to create a legal relationship 4.) A consideration (money)

4 essential elements (Legally binding contract)

How long do benefits pay out for (Benefit period)?

6, 12, 24, or 36 months

Maximum age for DI?

60

Disability income insurance pays a portion of an insured's income typically no more than______?

60%

How long does the underwriting process take?

8 weeks

- amount of rent (Base) - amount and frequency of rent increase - parking - signage - environmental and zoning concerns - Use restrictions - building in compliance

Additional considerations w/ leases

- Liability protection

Advantage of LLC

- Easy to start - Easy to Wind up - Quick Decision and prompt action - Flexibility in operations - Direct maintenance of business

Advantages of Sole proprietorship

What is the business tax return date for sole proprietors, Single-member LLC's, and corporations that end their year on December 31st?

April 15th

- included and excluded assets - transaction structure > allocation of purchase price among the tangible assets and goodwill of the practice - Buyer and seller representation - accounts recievable and credit balance > Buyer purchases AR, buyer collects for seller, seller retains AR. - Bill of sale

Asset purchase agreement

- term: stated duration and renewal method - compensation: basis for compensation and frequency of pay - include a restrictive covenant - termination: address how it can be and the length of noticed required.

Associateship agreement

- Most small business owners, especially home-based business owners - Comprehensive policy that includes coverage to damage to building and contents, business income, general liability and more - Alter insurance components in the package depending on need - Save money bc the bundle of service costs less

BOP (Business owner's policy)

Who said "In this world nothing can be said to be certain, except death and taxes"?

Benjyy Boi (Benjamin Franklin)

- Covers physical damage to commercial property - building in which business operates is owned, the policy will likely cover both the building and its personal property - insure items that are permanently attached to the building itself - EXCLUDES: land, water, plants, roadways, crops, shrubs, money, accounts, instruments, or trees.

Building and personal property coverage form

- Legal structure of an organization > Fundraising, obligations, taxes - Consider your needs and goals - Understand the features of each business structures

Business Structure

- Extension of commercial property insurance - Includes: office supplies, furniture, computers, equipment - Remain at the business to ensure coverage under commecial property policy - If you rent or own a practice in a commercial condo association you will only need this coverage on the policy

Business content and business personal property insurance

- Time concept - subject to waiting period of 24-72 hours - any lost profits incurred DURING this waiting period are NOT recoverable by the business income insurance policy

Business income deductible is a concept of time

- Coverage on doctor-owner or a key person in the practice - Provides the practice w/ cash flow if a doctor becomes sick or injured - Covers employee salary, rent, utility bills, insurance bills. practice loans etc. Different than business income interruption: covers loss of income due to damage to the facility

Business overhead Coverage insurance

- varies depending on business locality - local tax authority require to pay an annual thing in addition to business ones - Lumped together usually - items to pay tax also depend on the jurisdiction - Items a business uses and owns for day to day operations, like furniture, supplies and machinery

Business personal property taxes

•Cost of purchasing an existing practice to building a new practice •Due diligence •Continuity of value: transfer of patient lists and records •Seller dentist remaining as affiliated- defining his/her role •Review and seek advice of financial/business consultant and legal counsel

Buyer perspective

Broker negotiates the deal for the person who is interested in the practice

Buyer representation (Broker)

Most dangerous - mostly verbal agreements - Majority of doctors do not have any idea on how to structure a transition

By owner practice purchase

Default corporation under standard IRS rules - File corporate tax return > pay taxes on corporate level - Face possibility of double taxation: > if corporate income is distributed to business owners as dividends (personal taxable income)

C-corp

- Double taxation - More difficult and expensive to start - increased regulation and overnight

C-corp tax cons

- limited liability - unlimited number of shareholders - preferred for IPO and outside investors - Perpetual existence

C-corp tax pros

- Benefits will increase roughly 3% each year when you're out on claim. Very beneficial if you go out on total disability at a young age

COLA (cost of living adjustment)

What should you never do when you are in the midst of buying the practice/ interested?

Call the office

- covered for 2 conditions: > policy in effect at the time of the incident > policy in effect at the time the claim is made against you

Claims made coverage

- Business w/ significant amount of property and physical assets - Coverage protects your business against loss and damage of company property due to wide variety of events such as fire, smoke, wind, hail storms, civil disobedience and vandalism

Commercial Property insurance

- Tail policy upon cancelation - No back coverage if you lapse in coverage due to non-payment for a long period of time - difficult to switch to occurrence policy

Cons of Claims made

- Coverage lasts for a specified term only - Generally gets more expensive as the policy holder lives longer

Cons of Term life insurance

- Very expensive - variable interest rate (Market conditions) - Surrender charges (fees) may be levied at time of terminating policy or withdrawing money from the account

Cons of universal life

- very expensive, high fees, high commissions to agent, complicated contract

Cons of whole life

- negotiable - start w/ practice and financial considerations - will you lose money on each PPO or HMO?

Contract w/ insurance plan

- remain with the creator, although created on your behalf - contract should include assignment of these protections so that you own the rights to the materials you paid to have created

Copy right

- Incorporated by a group of shareholders > For-profit or non-profit > File articles of incorporation > Issue stock to company shareholders > Shareholders elect board of directors in annual meeting - Shareholders only responsible for the payment of their shares to the company's treasury upon issurance > single or several - Regulated under corporate laws their jurisdiction of residence

Corporate creation

- refer to multilocation, multidoctor dental practice - DSO: > Most recognized type Ex: Aspen, Greenberg, Coast dental > specific business structure designed to comply with state laws

Corporate dentistry

- Employment contract - Purchase sales agreements - Business service agreements

Corporate doctors signed corporate dentistry

- Legal entity that is separate and distinct from its owner - enjoy most of the rights and responsibilities that individual prossess - Some refer to it as a "legal person" - Company does not have to be large > most are small > most are privately held

Corporation

- Work in prison system - Good pay - 1-2 year system

Correctional Dental

- Use company credit card to make personal purchases - use company fund to make payment for personal credit card - Steal patient or dentist identity to apply for a fraudulent one - Stealing patient's card number to make personal purchase.

Credit cards (way to embezzle)

Most recognized type of corporate practice

DSO

- Things to look out for: > bogus designation of independent contractor > ambiguous compensation terms > non-compete/ non-disclosure > Arbitration clauses

DSO contract

- Review monthly report Ex's: Adjustment report, patient refund report, aging report - Review statements monthly Ex's: Bank statement, Merchant account statement, credit card statement, payroll report, Dental and office supply vendor statement - Owner/ Doctor should have administrative passwords to all websites and accounts - End of day procedures: > Reconcile day sheet total collections > Deposit total to prevent alteration of ledger entries after reports are printed > Secondary verification of day sheet > Review audit trail reports to identify transactions that could have been altered or deleted

Day to day embezzlement prevention

- shareholders- generally recieve one vote per share - Board or director appoint and oversees management > Executes corporations business plan > Must take all means to execute business plan - Member of board owe a duty of care to the corporation > Incur personal liability if they neglect their duty

Day to day operations of corporate

- Crime where an individual receives insurance money for filing a false claim, an inflated claim, billing for services not rendered Examples: > Billing for services not provided > Upcode > Submit dental claim under one patients name when services were provided to another person > Altering claim forms and dental records > Billing for non-covered services as if they were covered services > Routine waiver of a patient's co payment

Dental Insurance Fraud

- Insure against your ability to produce income

Disability insurance

- May be dissolved upon death or bankruptcy of a member - May not be suitable options when the founder's ultimate objective is to become a publicly traded company

Disadvantages of LLC

- Limited capital - unlimited liability - lac of continuity - limited size - lack managerial expertise

Disadvantages of Sole proprietorship

- tax principle by which business income is taxed 2x > once at corporate level > again at personal income level when profits distribute to shareholders.

Double taxation

Paramount - There is little fight btw buyer and seller *gentleman deal*

Dual representation (Broker)

What is the big value that venture capitalists are looking at and why they are interested in dental practices?

Effective earnings rate

- Waiting period before able to start receiving disability benefits. - Amount of time after a disabiility before benefits are payable e.g. (30, 60, 90, 180 days)

Elimination period

- Intentional and fraudulent taking of another person's property by one who has been entrusted with the property for his/ her own use Ex's: an office manager, supervisor, an employee

Embezzlement

- Once claims altered or billed for patients, embezzler may go into office records and erase fraud or change transaction to cover their tracks - Multiple adjustments to patient's accounts may be warning sign that an employee is skimming funds.

Embezzler benefit from insurance fraud

1. Best employee 2. Extremely well liked by other staff and patients 3. Intimate involvement with all tasks related to money 4. Territorial behavior around other employees 5. Extremely defensive and always have plausible excuse 6. Never take vacations or even days off 7. Ask for, or have, a private office 8. Work odd hours 9. Noticeable financial pressure 10. Living beyond their means/salary level

Embezzler profile

- Employers have legal responsibility to collect and pay over to the internal revenue service (IRS) taxes withheld from their employee wages > Social security and Medicare taxes > Federal income tax witholding - Also a responsibility to pay employers share of FICA taxes and Federal Unemployment tax

Employment Taxes

- Quarterly filing system requires people and business to pay an est. amount they will owe in taxes that period - also file annual tax returns that determine their exact total taxes due - Quarterly filing is required of those who do not have taxes w/ held from their incomes automatically - IRS Form 1040-ES Due: April 15, June 15, Sept 15, of current year and Jan 15 of next year

Est. Tax

- taxes required on specific goods or services like fuel, tobacco, and alcohol - primarily taxes that must be paid by businesses, usually increasing prices for consumers indirectly - FIle Form 720 on a quarterly basis - Required directly from consumer like property tax and excise tax penalties on certain retirement account activities

Excise tax

T/F Business agreements should always be verbal

FALSE (should be in writing)

T/F the person that closes out at the end of the day should be the same person making the deposit

False (Should NOT)

T/F Corporations are large and publicly held

False (Small & Private)

T/F business income claim deductibles are amount deductibles

False (Time deductible)

T/F defense costs are inside the limits

False (outside)

T/F practice production and collection trend should fluctuate dramatically year to year

False (relatively be the same)

T/F when bank deposit slips are used to embezzle 1.) office copy of the deposit slip contains the less amount reflecting the actual money 2.) Bank copy of the deposit slip contains the correct amount

False (switched; Office copy correct amount, Bank copy less amount)

- Submit bogus receipt - Inflate mileage driven to seminar - Use company cell phone for unauthorized calls - Get reimbursed for personal items

Falsification of Expense account (Way to embezzle)

- Required if the business has 4 or more employees (Non-construction) - Construction industry: 1 or more employees - Non-compliance: Penalty and shut down of the business

Florida Worker's Comp coverage requirement

- Provide dental service abroad - May be shortage in certain countries - Salaries 2-3'x's

Foreign Service Dental

Who can help if you are concerned that you have been embezzled?

Forensic accounting investigators

Case studies show - Office managers over time did not even attempt to disguise it - doctor would sign blank check or allow signature to be stamped to be used (Common practice)

Forge Signatures and or checks (way to embezzle)

- AKA: Future purchase option, Guranteed Insurabilit, Benefit Update - Allows you to increase your monthly benefit as your income increases w/o going through medical underwriting

Future Increase Option

- FOr any buisness owner and its employees - Protects against financial loss as the result of bodily injury, property damage, medical expenses, libel, slander, defending lawsuits, and settlement bonds and judgements Most common: trip and fall at office

General liability insurance

- Business that is owned and operated by 2 or more persons, each has a right as a co-owner and is liable for debts of the business - all parties share legal, financial liability, and profits equally

General partnership

- expressed, implied - Forms the basis of the agreement *** outline contract conditions or contract warranties***

General terms

1.) Patient cash payment is deposited into embezzler's account instead of office account 2.) Petty cash

How employee embezzles cash

- pay as income earned or received during the year - All businesses except partnerships, MUST file an annual income tax return *Partnerships*: File an informal return - Tax forms depends on the business structure

Income Tax

- Paper application - 15 minute phone interview - pull medical records on a case to case basis

Insurance carrier: principal

Paper application and paramedical exam w/ blood work

Insurance carrrier: Ohio national, The standard, or guardian

- entice someone to commit a crime - entered into by someone lacking capacity (e.g. minor) - Was agreed through misleading or deceptive conduct, duress, or undue influence

Invalid contract situations

- Not recognized outside of the US - Not perpetual existence - Not recognized by federal level--> Dictated by state statute

LLC tax cons

- Limited liability -flexible management structure - No corporate business - flexibility to choose tax structure

LLC tax pros

- Employee alters accounts receivable records in order to hide the theft of cash - Diverts payment from one customer and hiding the theft by diverting the cash from another customer to offset the receivable from the first customer - Perpetual > Newer payments are continually used to pay for older debts

Lapping Fraud (Perpetual Cash Theft from AR)

- company's financial debts or obligations that arise during the course of business operations

Liabilities

A contract btw insurance policy holder and insurance carrier where the insurance carrier promises to pay a designated beneficiery (family member, friend, etc) a sum of money in exchange for a premium, upon death of the policy holder

Life insurance

- means that business owner's financial liability is limited to a fixed sum, most commonly the value of that person's investment in a company or partnership if a company with limited liability is sued then he claimants are suing the company *personal assets can't be touched*

Limited liability

What is the corporations most important aspect?

Limited liability

- Coporate structures in the US where owners are not personally liable for the company's debts or liabilities - Regulations vary state to state - Any entity can form this including individuals and corporations - Don't pay taxes--> Profits and losses are passed through to members who claim them on their tax returns > Can elect to not pay federal taxes as an entity > choose different tx classifications > Creditors can go after the members - Formal partnership arrangement - Requires articles of organization to be filed with the state

Limited liability company (LLC)

- limited liability is distributed to every owner - protect each partner from debts against the partnership, they wont be responsible for the actions of other partners

Limited liability partnership

- Has at least one general partner (unlimited liability) and at least one silent partner (limited liability) > Partner w/ limited liability tend to have limited control over the company > General must pay self-employment taxes

Limited partnership

"winding up" used to terminate legal life of corporation - Sells company's assets - company pays creditors and gives remaining assets to share holders

Liquidation

- Provides temporary dental service - Fillin for pregnancy, Heart attacks, even deaths - It takes you into different practices - Pathway into office for a stress sale - Independent contractor - Paid lodging, travel, expenses - State by state issue - Work on cruise ships ** Good work/ Good pay/ Interesting**

Locum tennens Dental

- Pays a portion of a workers salary if they are unable to work for a a longer period *X>6 months*

Long term DI policy

Who should chose sole proprietorships?

Low-risk buisnesses

- dental professional liability - Covers: improper, illegal, or negligent professional activity or treatment, failure to diagnose - Protects the dentist from the cost of litigation and any award for damage or settlement - required to practice dentistry > contact state licensing board to verify state's requirements for health care providers before purchasing a policy

Malpractice insurance

What is the business tax return date for Partnerships, Multi-member LLC's, and S-corp?

March 15th

- Good benefits - Career oriented; more freedom in terms of practice - Allowed to travel - Specialty programs

Military Dental

- Deliver care in a drive up vehicle - w/ state or federal subsidy

Mobile Dental

What exact value determines the value of the practice?

Net cash flow

Makes sure both are on policy - Means insurance company cannot raise rates or cancel the policy as long as premiums are paid

Non-cancelable and guranteed renewal coverage

What fees should you increase?

Non-routine (Crowns and Dentures)

Purchased from the new insurance carrier - coverage provided for the period that you were covered under a previous claims-made malpractice policy that was terminated at the same time the NEW policy with this DIFFERENT carrier was issued

Nose coverage

- non-binding - Highlight important negotiation points of a transaction

Offer to purchase/ letter of intent

- largest practice expense, directly affecting profitability - frustrating and difficult to negotiate - contain many more provisions with imposed liability and expenses on tenant > Commercial more different than standard residential lease

Office Lease

- allows parties to reject the unacceptable terms within a permitted time frame by keeping the other terms of the agreement intact - gives the parties a choice to not be involved

Opt-out cause

- Electronic fund transfer - Minimal petty cash (petty cash log) - Understand cashflow in your business - Know how to print and understand the practice management software reports - Random spot audit checks - Let staff know you are keeping eye on your business

Other embezzlement method guards

policy pays out full benefits if you are unable to perform the material and substantial duties of your own occupation EX: dentist CAN become a teacher/ professor if they lose hand finger or eye sight. Policy *WILL* pay for full policy benefits on top of any other income you recieve in another occupation

Own occupation/ Regular occupation coverage

- Simplest structure for two or more people to own a business together 3 kinds: General, limited, limited liability

Partnership

- Unlimited personal liability (depend on partnership) - No perpetual existence - Must create official partnership

Partnership tax cons

- pass through entity - No corporate business taxes - Easy/ inexpensive business structure set up

Partnership tax pros

- Business structure that is not subject to corporate income tax Profits pass through to owners and taxed under individual income tax

Pass through entity

- No one will notice a daily or monthly report is never printed and reconciled w/ the bank statement - patient visit isn't entered into computer and no statement is mailed to patient - Posting of the amount into patient's account is credited instead of payment - posting amount ambiguously in bank deposit slip, covering the theft with another amount paid for inruance payment. - changing amount on check after signature - Change name of payee to embezzler's own name - making bank deposit using slips with a carbon copy - turn in multiple days worth of deposit slips in one day allowing time to juggle money

Patient Record (Ways to embezzle)

If you can not work how can you produce to live?

Percentage of DI claims

- business owner's personal assets that can be used to satisfy any debt of the business

Personal liability

- Accessible store of money kept by an organization for expenditure on small items - Some offices keep up to $500 - Maintained w/o the use of receipts and no one monitors this steady flow of money

Petty Cash

- Court puts aside limited liability and hold business shareholders, owners, or directors personally liable for the company's actions or debts/ *only happens in cases of serious misconduct or wrong doing* Ex's: Fraud, Comingle personal and business funds

Piercing the corporate veil

- When cash recieved it should be placed in sealed envelope, amount writtedn on outside and initialed by front desk team members - Sealed envelope NOT opened by any member of the front desk team > Envelope placed w/ deposit and opened at the bank - Balance total amounts - Deposits verified by different team members or doctor and deposited in the bank.

Practice for receiving payments and balancing deposit

- Practice value range btw 50-80% of gross income > Banks typically finances up to 80%

Practice worth

- Time period after purchasing a policy that claims cannot be filed until after probationary period is over.

Probationary period

- Each state has a different definitions > Some collect it from businesses in commercial real estate locations > others collect it for vehicles, computer equipment, and other business assets - Amount of tax paid is calculated by total value of the property or on a certain percentage of value

Property Tax

- Affordability > Step Premiums

Pros of Claims made

Cheapest way to insure life and simple contract

Pros of Term life insurance

- Ability to adjust the face value of coverage w/o surrendering the policy - ability to partially withdraw or borrow funds from the cash value

Pros of universal life

- Coverage lasts your whole life and includes cash value where you can pull money out of contract

Pros of whole life

- Is there an up to date appraisal? - What is the transition plan? - Do you have an asset?

Questions to ask the broker or seller

- want to practice skills - don't want to deal w/ mundane details of running a dental practice - quite content to let competent staff take charge and control of these duties - limited staff to segregate duties and not close supervision over managerial staff - Most dental education did not prepare or train on how to run a practice where to obtain resources - Other issues take prescedence

Reasons for a Dentist to be susceptible to Fraud

- allows for the continuation of benefits if you return to work part time due to illness or injury

Residual Disability or partial disability

- Duration of 12-24 months but can not exceed 24 months - If more than one office location, agreement should specify to which location it applies.

Restrictive covenant

Date from which point onwards your coverage extends. - If you purchase a claims made policy out of school, the date that policy starts is this and needs to be on all your policies moving forward.

Retroactive date

Elected a special tax status w/ the IRS with some tax advantages - No income tax is paid at corporate level > profits/ losses are passed through to the business and reported on the owner's personal tax returns

S-corp

- Only 100 shareholders permitted - strict qualifications standards - only recognized inside US - Not recognized by all states

S-corp tax cons

- Limited liability - pass-through entity - Perpetual existence - No corporate business taxes

S-corp tax pros

- Federal income tax > can't prove off the book > bury a lot of personal expenses

S. Corpus

- States may tax the sale of goods and services > check the state Exclusions of sales tax= food, clothing, medicine, newspaper, and utilities - Can tax business for goods and services when sales tax isn't collected > applies to goods and services purchased outside of the state you conduct business in

Sales and Use Tax

- Social security and Medicare tax primarily for individuals who work for themselves - FIle 1040-SE > Net earnings from self-employment X>$400 Sole proprietors, independent contractor, Certain church employees Social secutiry tax (12.4%) + Medicare tax(2.9%)~ 15.3%

Self-Employment Tax

•Fair market price •Commitment of the closing date •Confidentiality agreement and HIPAA Business Associate Agreement

Seller perspective

What are the 3 broker types?

Seller representation Buyer representation Dual representation

Broker negotiates deal for the person who is putting the practice up for sale

Seller representation (Broker)

- Keep receivable account from aging by posting the payment but not depositing the funds - Write off marketing the account "uncollectable" - Fake "discount" or "allowance" - Collect copay from patient amount written off as negotiated portion - Constant change in dental benefit plan payment structure and/ or dentist's lack of knowledge

Short changing or alter transcations (Way to embezzle)

- Pay portion of workers salary if they are unable to work for short period *3-6 months*

Short term DI policy

- Owns all assets and resources of business - Responsible for management of his/ her business enterprise - Responsible for arranging finances for his/ her business - Independent decision-making - Unlimited liability

Sole proprietor

- Unlimited personal liability - Difficult to get business financing - no perpetual existence

Sole proprietorship tax cons

- Pass through entity - Easy/inexpensive business structure set up - minimal reporting requirements - no corporate business taxes

Sole proprietorship tax pros

- Pre-prepared contract - most terms are set in advance with little to no negotiation - printed w/ only a few blank spaces (add names, signatures, dates) Ex's: employment contracts, lease agreements, insurance agreements, and financial agreements

Standard form contract

What does SALT stand for?

State and Local Taxes

•Delaware •Hawaii •Illinois •Iowa •Minnesota •New Hampshire •New Jersey •New York •North Dakota •Ohio •Pennsylvania •South Dakota

States w/o Business personal property tax

- Keep payment mailed to the practice w/o posting it - intercept patient's account statment - change the address on account so the patient never receives the bill - mail statement to themselves

Stealing statements (Way to embezzle)

- premium increase each year til the 5th year after the 5th year the rate stays constant and is called a mature rate

Step premium

Premium-recent dental school graduate: $300-400 After 5 years of practicing: $2,000-$3,000

Step up rate (Claims made coverage price)

- Ownership and management are separate - Unlimited life span coupled w/ ability to raise money--> Potential for significant growth

Strength of Corporate

•Details of the parties to the contract, including any sub-contracting arrangements •Duration or period of the contract •Definitions of key terms used within the contract •A description of the goods and/or services that your business will receive or provide, including key deliverables •Payment details and dates, including whether interest will be applied to late payments •Key dates and milestones •Required insurance and indemnity provisions •Guarantee provisions, including director's guarantees •Damages or penalty provisions •Renegotiation or renewal options •Complaints and dispute resolution process •Termination conditions •Special conditions

Structure of an agreement (Contract)

- FOrm fake supply/ vendor companies - Buy supplies and sell them to practice for 10% more than was paid - Pay an actual vendor 2x. request vendor to return the duplicate check and cash the check to her own personal account - Deliberately purchase more supplied than needed, return the overstock for a refund check

Supplies/ Vendor (Way to embezzle)

allows you to extend coverage from your old carrier for several years when you cancel your insurance because you are closing your practice or switching employers.

Tail coverage (difference from nose)

Covers you backwards from your retroactive date to date of cancellation - If not purchased, NO COVERAGE exists for claims that occurred during the time you were covered by the policy

Tail policy

Premiums remain level for a specified period (10,20, or 30 years). After the end of the level premium period, premiums will increase. Coverage continues providing the premiums are paid

Term life insurance

Most common life insurance policies?

Term life, Whole life, Universal life

Who is the only person in the office to have the administrative right to set up the user access rights?

The doctor

T/F Waive the elimination period IF a second claim is filed on the SAME condition for which the elimination period was previously satisfied.

True

T/F banks and insurance companies cannot form LLC's

True

- Determines final rate of disability income indurance policy premium - Insurance carrier reviews medical records health history, occupation, financials, lifestyle choices and coverage needs to estimate the level of risk of the insured applicant Includes: Medical and drug tests, Physician statement, tax documents to show income

Underwriting Process

- Unilateral include.. allowing one party to but not the other > Avoid or limit their obligations > terminate the contract > penalize for breaching or terminating contract - Vary the terms of the contract

Unfair terms

- Permanent life insurance (Adjustable life insurance) Can reduce or increase death benefits and pay premiums at any time in any amount once there is money in account

Universal life insurance

Rely on good faith of all parties and is difficult to prove

Verbal agreement

Permanent life insurance, providing a set amount of coverage for your entire life - On condition you pay premiums, beneficiery will recieve the benefit amount upon your death - also build up "cash value" from part of the premium being invested

Whole Life insurance

- Be a purchaser of goods and services - Be a supplier of goods and services - Have a partnering agreement w/ others

Why should I Understand a buisness contract?

- Business owners, required by state laws - cover employees from job related illness or injuries > Injured employees receive portion of their wages while they are off work for treatments of injuries or illness sustained on the job and covers medical costs. *Includes: Needle sticks*

Workers Compensation

Consist of a standard form agreement or a letter confirming the agreement

Written Contract