THE ADA PRACTICAL GUIDE TO ASSOCIATESHIPS 7 Types of Associateship Arrangements There are several forms of associateship arrangements. While significant legal and practical differences do exist among these forms, the common aspect of such arrangements is that the dentist who is deemed the associate has no ownership or equity interest in the practice. The type of associateship best suited to you reflects your values, need for independence and philosophy of practice. The three most common forms of associateships are: • Associate as employee • Associate as independent contractor • Time-sharing/solo group arrangements Although several hybrid variations of these three forms exist, they are not discussed in this manual. One of the most important issues that differentiate the types of associateships is control. Who will have control over management decisions, and what, when and how things get done? The degree of control and independence fall into three categories: • Behavioral control • Financial control • The type of relationship between the parties involved This issue of control is not only important from the standpoint of the day-to-day management of the practice, but it also has significant tax and financial implications. The Internal Revenue Service (IRS) has established a list of factors that are used in determining whether the issue of control indicates that an employer-employee relationship exists.1 Associate as Employee The associate as employee is a dentist hired by a dentist-owner or the practice entity, depending on whether the practice is incorporated. The typical associateship agreement is one of employer and employee. The employee must abide by the employing dentist’s practice policies and philosophies, fees, scheduling, and payment and collection policies. In the vast majority of cases, associates are likely to be classified as employees for IRS purposes, as well. The dentist-owner often assigns patients to the employee to help him or her establish a patient base and to involve the employee in various aspects of diagnosis and treatment planning. In the case of the group practice, the management of the practice entity may assign patients. As an employee, the associate typically has no ownership rights to patients’ records. The employer is usually responsible for maintaining all equipment, except for the associate’s personal instruments, and has final authority in such matters as working hours and vacation periods. The associate agreement may provide for such benefits as reimbursement for the associate’s malpractice insurance payment, professional dues, health insurance or disability premiums. Other indicators of employee status might be withholding of taxes and employer- provided benefits, including sick leave, continuing education course reimbursement, vacation pay, workers’ compensation and liability insurance. 1 Department of Treasury, Internal Revenue Service. Publication 15A, Employer’s Supplemental Tax Guide. Available at www.irs.gov/pub/irs-pdf/ p15a.pdf. Accessed on July 16, 2013. The type of associateship best suited to you reflects your values, need for independence and philosophy of practice.