Physician practices rarely have a mandate problem — they have a design problem. The same testing rules that throttle owner-dentists throttle physicians, compounded by multiple owners with different ages and incomes and by part-time clinical staff who drift in and out of eligibility. A safe harbor 401(k) with cross-tested profit sharing handles most practices; for high-earning partners, a cash balance layer on top may allow substantially larger pre-tax contributions. If your practice was absorbed by an MSO, the orphaned legacy plan needs its own review.
Why this industry is different
The mandate treats every employer alike. The payroll realities underneath don't cooperate:
- High-earning owners need more room than a 401(k) alone provides — a cash balance or defined benefit layer exists precisely for this, and most physicians have never been shown one.
- Partner versus associate compensation classes — W-2 associates, K-1 partners, production-based pay — complicate allocation formulas and testing.
- Part-time and per-diem clinical staff cross eligibility thresholds unpredictably, and the long-term part-time rules now pull more of them in.
- Fiduciary liability anxiety is justified — in most small practices no one has been formally named, which leaves the owners holding it personally.
- Practices absorbed by MSOs leave orphaned legacy plans that nobody is monitoring, terminating or merging properly.
What actually works
The working chassis is a safe harbor 401(k) — testing exemption, full $24,500 deferral for each owner in 2026 — with a cross-tested profit sharing formula that allocates by benefit rather than flat percentage, which typically favours older, higher-paid owners within the nondiscrimination rules. Where two or more partners are in peak earning years, a cash balance plan stacked on the 401(k) may allow each partner an additional actuarially-determined pre-tax contribution that grows with age. The design must be run against your actual census; the same structure that works beautifully for a two-partner practice with four staff can be expensive for one with fifteen.
We serve as a 3(38) or 3(21) fiduciary on the plans we build, which directly addresses the liability question — in writing, not by reassurance.
The SECURE 2.0 credits frequently cover most of the first three years' administration for employers under 50 staff — the formula, worked honestly — and if after the arithmetic CalSavers is still the right answer for your shop, we'll say so: the full comparison · run your own numbers.
On the numbers. Physician offices are not separately broken out in the published county figures; they sit inside LA County's 26,872 ambulatory health care establishments (NAICS 621), together with dental and allied-health practices — the sector page covers the umbrella.
By county
This guide is statewide. The county pages go local — where the industry physically clusters, which cities it sits in, and the municipal rules that stack on top of the state mandate.
- Physician & Specialty Practices in Los Angeles County
- Physician & Specialty Practices in Orange County
Where this industry clusters near us
Physician & Specialty Practices questions
What is a cash balance plan, in one paragraph?
A defined benefit plan that looks like an account: each year the practice credits a set contribution plus an interest credit to each participant's hypothetical balance. Because the limits are actuarial rather than the flat 401(k) caps, contribution room grows with age — which is why it suits partners in their 50s. It carries a funding commitment and actuarial costs, so it fits practices with strong, reasonably stable income, not everyone.
Our partners are different ages and want different contribution levels. Possible?
Usually, yes — cross-tested allocation groups and cash balance pay credits can be set per partner or per class, subject to annual nondiscrimination testing against the staff benefit. This is the core design work in a multi-owner practice and the reason a template plan fits badly.
An MSO acquired our practice and our old 401(k) is just sitting there. Is that a problem?
Potentially. Someone still owes that plan fiduciary oversight, filings and eventually a proper termination or merger — and 'the deal closed' is not a defense the Department of Labor recognizes. A short review establishes who is responsible and what remains to be done.
Do our per-diem clinicians have to be in the plan?
Not necessarily — eligibility can require 1,000 hours and a year of service — but the long-term part-time rules now admit employees with consecutive 500-hour years for deferrals, so 'per-diem' is no longer an automatic exclusion. This is a census question, checked annually.
A plan designed around physician & specialty practices — not around the average employer
We design around the census you actually have — turnover, seasonality, pay structure and all. Fifteen minutes, no charge, and a straight answer.