Can an employer charge a flat rate for Medical Malpractice insurance per physician, regardless of the actual individual premium?

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Can an employer charge a flat rate for Medical Malpractice insurance per physician, regardless of the actual individual premium?

Group is attempting to add Physicians to a group policy previously each physician had an individual policy and they want to charge a flat rate per physician regardless of where the physician is according to the step increases from the retroactive date. Some physicians that have a retroactive date less than 5 years would pay more than their actual premium to cover the other physicians who have retroactive date greater than 5 years would pay less. Is this a legal practice?

Asked on December 2, 2016 under Employment Labor Law, Virginia

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

Yes, it is legal: there is no law mandating that the cost to cover employee physicians must be related to their experience or the actual cost to cover that physician, or that some employees cannot effectively "subsidize" others. It is completely up to the employing group whether and how to provide group coverage, and how to charge its employees.


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