Certified Registered Nurse Anesthetists (CRNAs)/nurse anesthesiologists can work as a W2 employee or 1099 independent contractor. These designations impact tax and contractual status but do not impact scope of practice or ability to practice autonomously. The scope of an individual CRNAs/nurse anesthesiologist’s practice is determined by the professional scope of practice, education, experience, local, state, and federal law, and organization policy. Both statuses still allow CRNAs/nurse anesthesiologists to work across practice settings, such as hospitals, ambulatory surgery centers, and offices, as well as across various clinical specialties.
When assessing 3-year trends, AANA member data shows that CRNA/nurse anesthesiologist independent contractor (i.e., 1099) employment continues to increase, with 20% of survey respondents noting this type of employment in 2023. CRNAs/nurse anesthesiologists reporting that they are hospital employees (i.e., W2) remained around 40%, while those noting they are employees of an anesthesia group have decreased to 22%.
Both statuses offer distinct benefits and challenges, and the right choice depends on your career goals, lifestyle preferences, and professional aspirations.
Let’s take a look at the pros and cons of both employment options.
1099 Independent Contractors
A 1099 independent contractor is an individual who provides goods or services under a written contract. An independent contractor is self-employed and not an employee of the facility or group. Income for tax purposes is reported using the 1099 form.
Pros
Flexibility – 1099 CRNAs/nurse anesthesiologists have greater control over work schedules and assignments, choice of work locations, types of cases they handle, and overall career trajectory. Independent contractors can also easily pick up extra locum tenens work. 1099 CRNAs/nurse anesthesiologists often appreciate the mobility and marketability of being able to take on a new contract without being tied down.
Earning Potential – 1099 CRNAs/nurse anesthesiologists often have higher pay rates due to the demand for temporary CRNA/nurse anesthesiologist services and the lack of employer-covered benefits.
Tax Benefits – 1099 independent contractors can take advantage of various tax deductions, including professional development expenses, business-related travel expenses, equipment purchases, liability insurance, and continuing education.
Cons
No Employer Benefits – 1099 CRNAs/nurse anesthesiologists must obtain their own health insurance, retirement plans, malpractice insurance, and disability insurance, and manage their own paid time off. This can result in higher out-of-pocket expenses and additional administrative work.
Limited Legal Protections – Independent contractors typically have fewer legal protections compared to W2 employees and do not receive employer-provided workers’ compensation coverage. Malpractice liability insurance coverage and contractual protections can often be negotiated in the independent contract.
Self-Managed Taxes and Administrative Responsibilities – Since taxes are not withheld, independent contractors are responsible for their own tax calculations and payments, including self-employment taxes. This requires navigating more complex tax filing processes and potentially requiring the support of a financial planner or tax accountant. Additionally, 1099 CRNAs/nurse anesthesiologists must manage their own business operations, handle contract negotiations, cover professional expenses and equipment costs, and stay on top of continuing education and licensing requirements.
W2 Employees
A W2 employee is a worker in a formal employment relationship with a facility who receives regular wages, has taxes withheld by their employer, and is issued a W-2 tax form annually to report their earnings and tax deductions.
Pros
Stability and Security – W2 employment typically provides greater stability and job security than independent contractor arrangements. Employees benefit from consistent schedules, regular paychecks, employer-sponsored benefits, and legal protections under labor laws.
Employer-sponsored Benefits – W2 employees typically receive a benefits package, including employer-sponsored health insurance, retirement plans, malpractice insurance, and paid time off for vacation and education. Additional perks may include sign-on bonuses.
Simplified Taxes – Taxes are withheld by the employer, therefore simplifying end-of-year tax filing. Employers pay half of Medicare and Social Security taxes.
Cons
Reduced Flexibility – W2 CRNAs/nurse anesthesiologists may have less control over their work assignments or schedules. Additionally, changing jobs can be more challenging due to benefits being tied to the employer.
Potentially Lower Compensation – W2 CRNAs/nurse anesthesiologists may earn slightly less base pay than their 1099 counterparts due to employer contributions to retirement plans and other benefits that are part of the overall employment package. The total compensation package, including bonuses, profit-sharing, and retirement contributions, should be considered rather than just base pay.
Limited Tax Deductions – W2 employees typically cannot deduct business expenses like 1099 independent contractors can.
Regardless of W2 or 1099 status, seeking professional assistance from an attorney and a Certified Public Accountant (CPA) is crucial. These professional relationships facilitate thorough review of contractual arrangements, mitigation of legal risks, and optimization of financial strategies, ultimately safeguarding career and financial interests while positioning yourself for long-term success.
AANA Resources
- To find your next career move – whether W2 or 1099 – visit the MOTION Career Platform.
- For more information on compensation and benefits, review the 2024 CRNA Compensation and Benefits Survey. Members receive a complimentary summary report.
- For more information on 1099 practice, visit AANA 1099 CRNA Institute. This comprehensive educational series offers detailed guidance and resources on business structure and legal and tax implications, tailored specifically for independent practice.
- For information on malpractice insurance, visit AANA Insurance Services.
- Visit AANA Practice Management (login required) for resources including contract templates, contract checklists, sample medical staff bylaws, and other business-related content.
This article is for informational purposes only and does not constitute legal, tax, or financial advice.