Holistic providers who are considering accepting insurance generally have plenty of questions surrounding the issue of whether to bill under the practice name or use a personal social security number. If you’re establishing your practice, you might be tempted to just use your SSN - however, there are numerous advantages to utilizing an Employer Identification Number (EIN) attached to your practice.
Ultimately, the decision to bill under your SSN or EIN should be addressed prior to treating patients, ideally, after consulting with an accountant or attorney as to which makes the best sense for you. Keep reading to learn more about the benefits of an EIN compared to an SSN for medical billing!
What is an EIN?
An Employer Identification Number (EIN) is something you may not have even heard of until recently, though it was an identification system established by the IRS in 1974. According to the IRS, “An employer identification number (EIN) is a nine-digit number assigned by the IRS. It’s used to identify the tax accounts of employers and certain others who have no employees.” If you don’t have employees, you aren’t required to get one - however, there are still valid reasons to do so, whether you plan to bring employees aboard or not. 
Think of an EIN as a public social security number for your holistic practice. Similar to how each individual has a unique social security number, each business can have its own EIN. So if you’re the sole employee of your holistic practice, you can choose to use your social security number to identify your business. Nevertheless, there are some factors to consider before plastering your private, personal SSN on various business forms for your practice.
What are the Benefits of an EIN vs SSN?
When setting up the administrative side of your practice, it’s important to consider your options carefully. For example, comparing the benefits of utilizing an EIN instead of your personal SSN for medical billing might include the following points:
Using Your SSN for Medical Billing Puts You At Risk for Identity Theft
Applying for an EIN - which takes about 10 minutes - instead of using your private social security number will continue to keep this critical number safeguarded, reducing the risk of identity theft. Rather than broadcasting your personal SSN on various business forms, using your holistic practice’s EIN is more secure for your identity. It’s less likely for someone to break into your accounts when you keep business finances and personal finances separate. For example, If you’re a sole proprietor without an EIN, and you continue giving out your SSN to clients or vendors, you’re putting yourself at a higher risk.
An EIN Helps Establish Business Credit - and Benefits Your Finances
An EIN also means your practice is officially recognized as a legal entity. Therefore, you can start building credit for it! If you’re new to starting a holistic practice and unsure about how to build credit for your business, don’t worry. It’s essentially the same as establishing, managing, and utilizing your own consumer credit report information. In the same way you established your personal credit to apply for credit cards, mortgages, or even personal loans, your new practice needs to establish credit. In fact, most banks require an EIN in order to open a business banking account; this will simplify the process of tracking and managing your professional expenses, and, as a result, you’ll be able to make more efficient budgeting plans for your holistic practice. Plus - in the worst case scenario - if your practice files for bankruptcy, your personal assets are protected from business losses.
Another advantage to distinguishing your personal assets from your holistic practice’s deals with taxes; filing taxes on behalf of your holistic practice with an EIN separately from your personal accounts might result in tax benefits. Be sure to consult your tax professional to compare rates and see where your holistic practice’s EIN might come in handy with Uncle Sam.
Utilizing an EIN Aids the Hiring Process
If you’re starting your holistic practice and you’re its sole employee, it might be hard to imagine now — maybe your practice is just getting started, you like the pace, and you’re excited about going it alone — but you may want to hire additional employees sometime in the future. And when you do, you will absolutely need an EIN. It’s a requirement by the IRS for taxation purposes, plus you’ll need it for any payroll systems you set up. An EIN is a small thing now that can make a big difference and help reduce headaches in the future of your holistic practice!
How To Get an Employee Identification Number (EIN)
It might be uncommon to hear a government form described as simple or easy, but we promise applying for an EIN is just that! This process takes less than 10 minutes, it’s free, and it can really impact the administrative aspects of your holistic practice.
Here’s how to do it:
1. Grab your laptop and visit the IRS’s online EIN Assistant page.
2. Follow the EIN Assistant’s instructions and submit the information requested.
3. After your application is submitted, you’ll get your EIN immediately.
4. Be sure to write this number down somewhere safe so you always have it handy.
That was easy! We here at Holistic Billing Services know it takes a lot to run a streamlined and effective practice. Serving your patients and treating them with the best holistic approaches should always be your top priority, but sometimes massive piles of paperwork, billing errors, and insurance delays can weigh you down and poorly affect your practice.
Our experts here at HBS believe that your success is our success. From handling medical billing and coding to offering consulting services and much more, our team is dedicated to making it feel like we’re in-house. With a focus on holistic practices, insurance background, and proven consultants, our team can work with you regarding all holistic practice-related matters, and even help you navigate legal complexities like non-compete agreements. Contact us today!