The short answer
More than an employee. As a 1099 contractor, you're responsible for your own taxes, including quarterly estimates, malpractice insurance, licensure and CE, health insurance and retirement, and your own business records. You also keep full professional responsibility for clinical decisions and documentation.
What does a 1099 therapist handle?
Money and taxes
- Income tax and self-employment tax, usually paid quarterly. See How Taxes Work for 1099 Therapists.
- Business records: income, expenses, mileage, and receipts.
- Health insurance, through a spouse, the Marketplace at HealthCare.gov, or another source.
- Retirement savings, such as an IRA or a self-employed plan.
- Saving for time off, since no one pays you to take it.
Professional requirements
- Keeping your license active in every state where you see clients.
- Continuing education for renewal.
- Malpractice insurance at the limits your contracts require.
- An NPI and accurate provider information.
Clinical work
- Clinical decisions and their consequences.
- Accurate, timely documentation.
- Ethics: informed consent, confidentiality, competence, and avoiding abandonment.
- Your workspace, if you work by telehealth: privacy, security, and a reliable connection.
Business setup (optional, but common)
- An LLC or PLLC, which some therapists use for liability or tax reasons.
- An EIN, if you form an entity or prefer not to give out your Social Security number.
- A separate bank account for business income.
What does the hiring organization handle?
It depends on the arrangement. Some handle almost nothing beyond referrals. Others handle credentialing, billing, scheduling, and technology. Ask for a specific list. See What Administrative Support Should Therapists Expect?
Is the responsibility worth the autonomy?
For many therapists, yes. Control over your schedule, caseload, and clinical approach is the point of contract work. The responsibilities above are the cost of that control, and most become routine once they're set up.
How ValorWell handles this
ValorWell therapists are 1099 contractors with the responsibilities above, including their own taxes and malpractice coverage. ValorWell takes on the business infrastructure tied to its pathways: credentialing administration, authorizations, billing, claims, denials, scheduling and telehealth technology, intake, and referrals. You're paid weekly for documented sessions.
Continuing education and additional state licenses may be supported case by case.
Important limits
- No W-2 benefits. ValorWell doesn't provide health insurance, retirement, or paid time off.
- No malpractice coverage. You carry your own.
- This isn't tax or legal advice. A CPA can help you set things up correctly.