Sentara Healthcare Benefits: What you Need to Know

Sentara Healthcare Benefits: What you Need to Know

Understanding your employee benefits and how to maximize their utility is crucial to your financial well-being, no matter if you’re a freshly hired attending or a tenured physician in a leadership role.   

We’ve had the opportunity to evaluate Sentara Healthcare’s retirement and insurance benefits for many clients and prospects over the years and thought it would be helpful to provide a brief overview of what you can expect and how to take full advantage of them.

Retirement Benefits

Sentara 403(b) & 401(k) Plans

Sentara offers a Section 403(b) retirement plan for employees in the nonprofit divisions and a Section 401(k) plan for ‘for-profit’ division employees. The plans are indistinguishable, sharing the same rules, characteristics, and investment options. 

In 2022, you can contribute up to $20,500 to the plan that’s available to you, plus an additional $6,500 if you’re over age 50. Important note: Sentara automatically enrolls you in the 403(b)/401(k) at a 10% contribution rate. The rate automatically increases by 1% every year. It’s imperative to obtain login credentials to your Sentara account, held at Fidelity, to manage your contributions and ensure you ‘max out’ your allowed savings. 

Do you like free money? Assuming you said “Yes!” in your head, we have good news: Sentara matches 50% of your contributions up to 6% of your compensation1

The 403(b) and 401(k) plans also allow Roth contributions.  This option applies to all participants, regardless of how much you make.  Unlike traditional pre-tax contributions, Roth contributions are made after-tax.  While you receive no current tax deduction, you benefit from tax-free withdrawals in retirement.  The decision of traditional vs. Roth depends on many factors, including tax rates, savings rates, goals, and more.  Read our blog post on the Roth vs. Pre-Tax decision to help make the right decision for your situation. 

Also, the plans offer an extensive, diversified list of mutual funds on the investment menu. Talk to an advisor to determine the appropriate portfolio that aligns with your aspirations & risk tolerance. 

Sentara 401(a) Plan

In addition to the 403(b)/401(k) plan, Sentara offers a Section 401(a) retirement plan. What makes this plan unique is that you are not allowed to contribute. Only employer contributions are allowed in this plan. 

Every year, Sentara will contribute 3% of your compensation to the plan1. You are automatically enrolled, but you still need to log in to select the investments and beneficiaries. If you do not choose any investments, your money will default into a target-date mutual fund based on your age. These funds may or may not match your investment needs, goals, or risk tolerance. It’s quite important to log in to Fidelity to set up both your accounts. 

Health Savings Account (HSA)

A Health Savings Account (HSA) is a wonderful employee benefit, and it could be advantageous to start contributing as soon as possible. HSAs are used alongside High Deductible Health Plans (HDHPs). For 2022, the IRS defines a high deductible health plan as any plan with a deductible of at least $1,400 for an individual or $2,800 for a family. A HDHP is available to you as one Sentara medical insurance option. 

They allow you to save and invest money for medical expenses, including deductibles, co-insurance, prescriptions, vision expenses, and dental care. Unused balances are carried over to the following year, funds never expire, and can be passed on to a surviving beneficiary. In addition, HSAs are “triple tax-advantaged,” meaning that they are funded with pre-tax dollars, grow tax-free, and withdrawals are not taxed if they are spent on qualified medical expenses – making them a great retirement savings vehicle. 

Insurance

Life Insurance

Sentara provides a life insurance benefit equal to 1x your base pay. In addition, you can purchase coverage for your spouse & dependents and whole life insurance on yourself (tread carefully there). 

If you are a physician with a family, depending on your income, group life insurance equal to 1x your pay is likely not enough to care for your loved ones. Over the years, we’ve found our clients are often best suited with a 20 or 30-year term life worth somewhere between $2-5 million for physician families, depending on the situation, of course. 

Disability 

As a physician, one of your most considerable assets is your ability to earn a high income. Protecting that ability through disability insurance is thus a crucial part of your financial plan. 

Sentara’s disability insurance is broken down into two separate policies: short-term and long-term. The short-term policy will pay you 50% of your base salary for 180 days after a 21-day elimination period. 

The Sentara long-term disability policy picks up where the short-term policy stopped – after the initial 180-day period. The benefit is still 50% of your base pay. 

Remember that these policies are fully paid by Sentara, meaning the benefits are taxable income to you. 

Also, group disability benefits may not be Own Occupation policies. Without “Own Occ” provisions, the insurance company could argue that even though you cannot perform your current job, you could answer phones or do office work for a living, thus not making you disabled. 

It’s critical to review your insurance options with a trusted financial advisor. 

Other Benefits

Sentara also offers a suite of additional employee benefits such as medical, dental, vision, and AD&D insurances, PTO, sick leave, and legal resources. 

Also, be sure to ask Human Resources about the Tuition Assistance Program. Developing a plan to pay off your student loans could be a valuable part of contract negotiations. 

The Takeaway

Your employer retirement accounts, insurance policies, and student loan repayment plans play a vital role in any solid financial plan. Thankfully, Sentara Healthcare offers a full suite of employee benefits as part of your overall compensation. 

Here at HCO, we offer a complimentary Second Opinion Service to Sentara employees. We review your financial situation to ascertain your progress towards your most important financial goals and determine how we could add value above & beyond what you’re currently doing. 

1 IRS rules stipulate that only the first $305,000 (2022) of your cash compensation is counted towards determining the employer match. This is referred to as the Covered Compensation Limit. 

Disclosure: This literature was prepared by Harrison & Co Wealth Management, LLC, d/b/a HCO Private Wealth. Sentara Healthcare has not endorsed this literature, and HCO Private Wealth is not in any way affiliated with Sentara. You should contact Sentara Human Resources for your most accurate employee benefits details. This information has been derived from sources believed to be accurate. Please note – that investing involves risk, and past performance is no guarantee of future results. HCO Private Wealth is not engaged in rendering legal, accounting, or other non-investment professional services. This information should not be construed as tax or legal advice and may not be relied on to avoid any Federal tax penalty.       

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