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Nurse Partners FAQ
Q: What is the latest position from the Royal College of Nursing about indemnity insurance for nurse partners?
A: In August 2006, the RCN made the following statement about its indemnity insurance:
"Where a member is working in a self employed capacity, whether trading as a sole proprietor or behind a limited company, and does not employ other health care workers, he/she will be covered by the scheme.
Where a nurse enters into a partnership with another nurse or nurses who are all members of the RCN, then all partners will be covered by the scheme. If they are not all members of the RCN the member will be excluded from the scheme.
Where a member is working in a self employed capacity, whether as the sole proprietor or behind a limited company, and she employs or otherwise engages with a health care worker who is not a member of the RCN, the member will be excluded from the scheme.
Where a member enters into a partnership with a GP or other health care practitioner, and her partners are not RCN members, the member will be excluded from the scheme.
If, in addition to working in their business, a member undertakes work outside of the business, such as on the bank or through an agency, then she remains covered by the scheme."
Nurse partners who employ GPs are therefore still excluded from indemnity insurance cover by the RCN.
Q: I have heard that there is a new form of partnership called a 'limited liability partnership' - what is this?
A: A Limited Liability Partnership (LLP) shares many of the features of a normal partnership - but it also offers reduced personal responsibility for business debts. Unlike members of ordinary partnerships, the LLP itself is responsible for any debts that it runs up, not the individual partners.
Q: What should I look out for when arranging indemnity insurance as a nurse partner?
A: There are some questions you should clarify with any medical protection organisation before taking out indemnity insurance. These are:
- Do I need a policy of my own rather than being included in a group scheme:
- Is the cover for clinical work only or does it also cover vicarious liability for employees, and/or public liability insurance?
- What is the effect on the cover provided of maintaining my RCN membership?
Q: I have heard that the RCN will no longer indemnify nurses who become practice partners – is this right?
A: The RCN issued a statement in May 2005 that clarifies the existing situation. The authors, with the benefit of hindsight, accept that some of the wording is misleading. The fact is that the situation has not changed. The RCN's insurers have never been able to provide nurse partners, or any nurse who is an employer, with the ‘business cover' they need as partners in the practice/employers: that is, cover for their vicarious responsibility for the actions of practice staff, and their liability for the actions of their partners.
The cover that a nurse partner takes out for this business risk, for example from a medical protection society, also covers her own professional practice while working in the business. If she was also covered by the RCN indemnity, then in the event of a claim against her, there could be a dispute between insurers about who would pick up the costs. Such a dispute would bring unnecessary complications to an already difficult situation. The RCN insurers have therefore made clear that they do not provide indemnity cover for nurse partners.
Q: So as a nurse partner I get no indemnity cover at all from my RCN membership?
A: The RCN's insurers will continue to cover the nurse employer in relation to any practice undertaken outside of the business/general practice – for example, bank shifts, and charitable acts as a ‘Good Samaritan'.
Q: What should I do now?
A: Check that your medical protection society cover does cover your professional practice while working in the business. Also check whether your practice has insurance cover for the business as a whole in relation to clinical negligence, that you are part of as a nurse partner. Such insurance is a business expense, like insurance for the equipment and premises) and can be offset against the income of the practice for tax purposes, rather than having to be paid for by the individual nurse partner.
Q: What is happening about nurse partners and NHS pensions?
A: The NHS Pensions Newsletter (TN 3/2005) from the NHS Pensions Agency, dated 22 March 2005, states that ‘subject to the Amendment Regulations coming into force on 5 April 2005, all non GP partners in GMS are now eligible to join the NHS Pension Scheme.' The regulations apply retrospectively from 1 April 2004. The Newsletter goes on to explain the criteria and procedure for non-GP partners in GMS joining the NHS pension scheme.
Q: So what is the current position?
A: Non-GP partners in nGMS practices are now able to join the NHSPS, like non-GP providers in PMS. The Primary Care Trust or Local Health Board is the ‘employer' for pension scheme purposes and responsible for pension records. The PCT/LHB must agree the partner's pensionable pay, on the basis of their partnership share, as specified in writing to the PCT/LHB. The PCT/LHB will collect non-GP partners' NHSPS contributions via agreed deductions from their practice global sum.
This information is taken from the NHSPA newsletter, and is not a complete description of the scheme. For help and further information, see the revised ‘Practitioner NHS Pension Scheme Member Booklet' (SDP) on the NHSPA website, or available from the Agency's Stationery Store (tel 08701 555455). Or telephone the NHSPA direct on 01253 774774.
Q: What is the difference between a ‘salaried' partner and any other sort of partner?
A: A salaried partner receives a fixed amount of money from the practice each month, rather than a share of the profits of the partnership. But as a partner rather than an employee, s/he may be able to contribute more to the strategic decision-making within the practice. Other types of partner receive either an equal share of the profits of the practice, or an agreed proportion of the profits – for example, the agreed share may be less than an equal share if the partner works part-time rather than full-time – as set out in the partnership agreement.
Q: How much financial risk am I taking in becoming a practice partner?
A: Under a normal partnership agreement, all partners are ‘jointly and severally liable' for the liabilities of the practice. This means that you could not only be liable for part of any debt, but for all of it if other partners default. It is very important that you take individual legal and financial advice before signing any partnership agreement.
Q: Are there other professionals in the same position?
A: Yes, we know of practices where the practice manager is also a partner.
Q: Where can I get advice or support?
A: You can get general information and answers to ad hoc queries from the QNI, which has access to existing nurse partners willing to offer advice and share their experiences. However, this cannot replace the individual legal and financial advice you will need if you are preparing to negotiate or enter a partnership agreement. If you are a member of the Royal College of Nursing, you can get half an hour's free legal advice from a solicitor instructed by the RCN. Contact the RCN for details.
Q: Are there other forms of owning a practice that don't involve the risks of a partnership?
A: You could form a public limited company, which has a legal existence separate to that of the people running it, and so allows you to limit your liability in a way that you cannot do in a traditional partnership. You should seek further legal advice about this.
Q: If I’m thinking of partnership with other professionals rather than joining a practice partnership, what kinds of organization could I set up?
A: There are many different organizational forms that could be used as the vehicle for delivering primary care services, in addition to PMS or GMS contracts. The websites listed here will give more information, but do not replace individual legal advice for specific circumstances.
Q: If I am self-employed as a nurse partner, I don't have an employer to give me ‘sick pay' if I'm off work through illness – what can I do about this?
A: You could take out a sickness insurance policy to provide some income. Some companies will provide cover for the costs of employing a locum to take your place in the practice while you are off work. Your partnership agreement should state whether/for how long the partnership will pay locum fees, so that your own insurance provides appropriate cover, and what will happen if you are off sick for a long period of time. Some partnership agreements state that costs of locum fees to cover sickness will come from the affected partner's share of the profits
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