When hiring Certified Registered Nurse Anesthetists (CRNAs), healthcare facilities must choose between two primary employment classifications: W-2 employees and 1099 independent contractors.
Choosing the right model can help align CRNAs with your facility’s operational goals, while staying within budget.
According to the American Association of Nurse Anesthesiology (AANA), 1099 CRNA employment has consistently increased in the last three years (20%). However, W-2 hospital CRNA employees are double that number at 40%. This shows that most nurse anesthetists continue to be traditional employees rather than independent contractors.
In this article, we’ll explore both models to help you determine the best hiring approach for your facility.
Difference Between 1099 and W-2
The key difference between 1099 and W-2 classifications lies in how CRNAs are employed and taxed.
W-2 CRNAs are considered employees of your healthcare facility. As the employer, you’re supposed to pay a salary (fixed or hourly), withhold income tax (federal and/or state), Social Security and Medicare taxes, and contribute toward any retirement plans.
Additionally, W-2 CRNAs often receive benefits such as healthcare insurance, malpractice insurance, paid time off, and retirement plan contributions.
In contrast, 1099 CRNAs are independent contractors and are considered self-employed for tax purposes. While you’ll compensate them for their work (usually on an hourly rate), you won’t be withholding any taxes. The CRNAs will pay income and other taxes to the federal and state governments as independent contractors.
In short, W-2 CRNAs offer more consistency and legal protection for employers, while 1099 CRNAs provide greater flexibility and may be better suited for short-term or variable staffing needs.
The choice between W-2 and 1099 classifications has significant financial implications for both the healthcare facility and the CRNA.
For instance, W-2 CRNAs may earn a fixed salary with benefits, while 1099 CRNAs often negotiate higher pay rates to compensate for the absence of employer-provided benefits.
According to the 2018 AANA Annual Compensation and Benefits Survey, the average income for a 1099 CRNA was approximately $230,000 annually, compared to $187,000 for their W-2 counterparts in 2018.
1099 CRNA Employment: Pros and Cons for Employers
Hiring CRNAs as 1099 independent contractors can offer several strategic benefits, but it also comes with unique challenges. Let’s take a look at the pros and cons of this employment model.
Pros of Hiring 1099 CRNAs
Here are some of the main advantages:
1. Greater Flexibility in Scheduling
1099 CRNAs typically have more autonomy over their work schedules, which allows facilities to staff based on demand. This flexibility is particularly valuable for hospitals and surgical centers that experience fluctuations in patient volume or need coverage for specific shifts.
2. Potential Cost Savings
Facilities that hire 1099 CRNAs are not required to provide traditional employee benefits such as health insurance, paid time off, or retirement contributions.
Additionally, employers are not responsible for the employer portion of Social Security and Medicare taxes, which reduces overall employment costs.
3. Ideal for Short-Term or Specialized Needs
Hiring 1099 CRNAs offers the flexibility to address temporary staffing shortages or to bring in specialized skills for specific procedures without long-term commitments. This flexibility may be particularly beneficial in environments like ambulatory surgery centers, where patient volumes can vary.
Similarly, it is also a good idea for rural areas with staff shortages to allow CRNAs to cater to multiple facilities.
Cons of Hiring 1099 CRNAs
While hiring CRNAs as independent contractors offers flexibility and potential cost savings, it’s important to consider the challenges that come with this model.
Some of the key drawbacks healthcare facilities should be aware of are:
1. Lack of Benefits May Result in Lower Job Satisfaction
Independent contractors do not receive employee benefits such as health insurance, disability insurance, or retirement contributions. This lack of benefits can impact job satisfaction and may lead to higher turnover rates among CRNAs.
A survey by Intuit QuickBooks and Allstate found that 78% of employees would change jobs for better benefits.
2. Potential Challenges in Staff Integration and Consistency
Contract-based CRNAs may not be as integrated into the facility's culture or team dynamics. This can affect communication, continuity of care, and overall team cohesion, especially in hospitals that depend on close collaboration among staff or are already experiencing nursing shortages.
3. IRS Classification Risks
Misclassifying employees as independent contractors can lead to legal and financial repercussions.
The Internal Revenue Service (IRS) has specific criteria for determining employment status, and non-compliance can result in penalties for the healthcare facility.
According to the National Employment Law Project, 10-30% of employers misclassify employees as independent contractors.
W-2 CRNA Employment: Pros and Cons for Employers
Hiring CRNAs as W-2 employees offers a more traditional employment structure. Let’s take a closer look at the advantages and potential drawbacks for healthcare facilities.
Pros of Hiring W-2 CRNA
Key advantages of employing CRNAs as W-2 staff are:
1. Stability and Consistency in Staffing
Employing CRNAs as W-2 employees creates a stable workforce for hospitals and other healthcare facilities. It can help ensure the consistent availability of anesthesia care and may better facilitate the integration of CRNAs into the healthcare team.
Also, the AANA projects a shortage of 12,500 anesthesia professionals by 2033. Having W-2 CRNAs may help safeguard your facility against future staffing gaps.
2. Better Job Satisfaction through Benefits and Protections
W-2 CRNAs typically receive comprehensive employee benefits, including health insurance, retirement plans, and paid time off. These benefits contribute to higher job satisfaction and may help retain them for the long run.
3. Simplified Compliance with Labor Laws and Tax Regulations
With W-2 employees, the facility is responsible for tax withholdings and payroll processing. While this adds administrative responsibility, it also helps ensure full compliance with labor laws and IRS requirements, which in turn reduces the risk of legal issues tied to worker classification.
Cons of Hiring W-2 CRNA
While the W-2 employment type offers many advantages, it also comes with some drawbacks that healthcare facilities should consider before committing to this model.
1. Increased Costs Due to Payroll Taxes and Benefits
Employing W-2 CRNAs involves higher expenses for the facility, particularly from handling payroll taxes, labor law compliance, and benefits (healthcare premiums, retirement plan contributions, paid time off, etc.).
Even though 1099 CRNAs get paid more than W-2, those additional costs can quickly add up to make W-2 employment more costly for employers. These additional costs can impact the overall budget and financial planning.
Here’s the cost of paid time off, as reported by a W-2 CRNA:
2. Reduced Flexibility in Adjusting Staffing Levels
The W-2 employment model may limit the facility's ability to adjust staffing levels quickly in response to fluctuating patient volumes or seasonal demands. This can affect operational efficiency and drive up costs, as salaried employees must still be paid during periods of lower patient volume.
3. Increased Administrative Responsibilities
While 1099 CRNAs are responsible for managing their own tax obligations, W-2 nurse anesthetists rely on their employer to process and pay their taxes. This adds to the administrative responsibility for the employer.
For smaller facilities with limited HR or payroll resources, these administrative tasks can become burdensome and add to the overall operational cost.
Factors to Consider When Choosing Between 1099 vs. W-2 CRNA Hiring
When deciding which employment model for CRNAs is best for your healthcare facility, consider the following factors that will help you optimize your operations within your financial budget.
1. Cost Considerations
W-2 CRNAs require a larger financial commitment. In addition to salary, employers must cover payroll taxes, health insurance, retirement contributions, and paid time off.
1099 CRNAs are paid only for the hours they work. They cover their own taxes and benefits, but often charge higher rates to offset these expenses.
The overall cost difference depends on hourly rates and the scope of benefits offered. Facilities with tighter budgets may favor the 1099 model, while those prioritizing retention may opt for W-2.
2. Tax Liability and Compliance
Employing W-2 CRNAs requires the facility to pay the employer portion of Social Security and Medicare taxes, totaling 7.65% of the employee's wages. These taxes, along with any benefits, contribute to higher overall employment costs for the facility.
Hiring 1099 CRNAs saves you the taxes and the burden of collecting them. However, it’s essential to ensure that your facility’s relationship with the CRNA meets the 1099 classification set by the IRS.
Misclassifying workers can lead to significant penalties.
3. Staffing Needs
Using 1099 CRNAs offers greater scheduling flexibility, which is beneficial for covering short-term needs or variable workloads. However, this may result in less consistent staffing than W-2 employees, who provide a stable and predictable presence within the facility.
If your hospital, surgical center, or outpatient facility consistently requires the services of CRNAs, hiring them as W-2 employees can be a better choice. On the other hand, if your facility experiences varying levels of demand for anesthesia services, you may be better off hiring a 1099 CRNA.
It’s a matter of balancing flexibility and stability according to your facility's staffing needs throughout the year.
4. Retention and Job Satisfaction
In 2023, the turnover rate for nurses was 18.4%. And the cost of a registered nurse turnover can be high. For instance, the turnover cost for a bedside registered nurse is $61,110, as per the 2025 NSI National Healthcare Retention and RN Staffing Report.
Employers face the challenge of retaining CRNAs amid a shortage. The employment model you offer can contribute to the overall job satisfaction of the CRNA, and retention.
W-2 positions tend to appeal to CRNAs seeking stability and employer-provided benefits such as health insurance, retirement plans, and paid time off. These factors can improve retention.
In a survey, a CRNA explained why they prefer W-2 over 1099, “Retirement benefits, healthcare, and vacation time. The three big things I don’t get with 1099, as I have to provide it all for myself.”
In contrast, 1099 roles, while lacking traditional benefits, attract CRNAs who value independence, flexibility, and the potential for higher income.
According to a McKinsey analysis, nurses want more time for direct patient care, to coach their peers, and to receive professional development opportunities. They also want to spend less time on administrative tasks (which can be automated with the right solutions). You can offer all of these things with either employment model and increase retention and job satisfaction.
Pro tip: Engage directly with your current or prospective CRNA staff to understand their employment preferences. This dialogue can provide valuable insights into whether a 1099 contract or W-2 position would better align with their professional goals and, consequently, increase their likelihood of staying with the company.
Can You Use a Hybrid CRNA Hiring Model?
Yes, healthcare facilities can use a hybrid CRNA model, where some of the nurses are W-2 employees and others are 1099 independent contractors. This approach is common in hospitals and surgical centers, especially for covering temporary shortages or filling specialized roles.
A hybrid model allows you to maintain a stable core team of W-2 CRNAs while using 1099 CRNAs to handle fluctuations in patient volume or support specialized procedures. It offers the flexibility of contract staffing without sacrificing consistency in care delivery.
However, accurately classifying workers is crucial to adhering to IRS guidelines and avoiding potential penalties. Make sure that the role and responsibility of the 1099 CRNAs align with the requirements for private contractors in this field.
While 1099 CRNAs offer flexibility, ensure that all practitioners, regardless of employment type, adhere to your facility's protocols and standards to maintain high-quality care for all your patients.
Moreover, to effectively manage a hybrid workforce, consider implementing scheduling software that accommodates both W-2 and 1099 staff. Such tools can streamline shift assignments, track hours accurately, and ensure compliance with labor regulations, thereby enhancing operational efficiency.
Pro tip: You can also work with top automation consultants to optimize your workforce management systems and boost operational efficiency across your facility.
Best CRNA Hiring Model for Small vs. Large Healthcare Facilities
When comparing the W-2 vs. 1099 hiring model for CRNAs, the size of your healthcare facility also matters. Patient volume, available resources, and staffing demands vary greatly between small and large institutions, and so should your staffing strategy.
Small Healthcare Facilities
Smaller institutions, such as rural hospitals or ambulatory surgery centers, often experience fluctuating patient volumes and may have limited budgets.
In smaller settings, employing 1099 CRNAs can provide the flexibility to adjust staffing levels based on current demand without the long-term financial commitments associated with full-time staff.
This approach can be cost-effective, as it reduces employee benefits and payroll tax expenses. According to the AANA, CRNAs are often the sole anesthesia providers in many rural settings. A 1099 contract can offer them more flexibility and autonomy of practice in such areas.
Large Healthcare Facilities
Larger institutions, such as urban hospitals with high patient volumes, may benefit from employing W-2 CRNAs. As we explored earlier, this model provides a stable workforce, promotes consistency in patient care, and can enhance staff integration within the organization.
While the financial commitment is higher due to costs associated with health insurance, retirement plans, and other employee benefits, the investment can improve job satisfaction and retention among CRNAs.
Most large institutions have the resources to support these expenses.
That said, large facilities can still use 1099 CRNAs to manage peak periods, leave coverage or specialized procedures while balancing stability with flexibility when needed.
Build a CRNA Workforce That Fits Your Facility
The choice between W-2 and 1099 employment models should be based on your facility’s specific needs, resources, and long-term goals. Administrators can make decisions that support both operational efficiency and high-quality anesthesia care by evaluating factors like patient volume, budget, and staffing flexibility.
It’s also important to involve CRNAs in the conversation; they may have clear preferences based on their career goals, compensation expectations, and desired work structure.
Regardless of the model you choose, you can benefit greatly by partnering with the experienced CRNA staffing agency. They can help match the right professionals to your facility’s needs and ensure both parties are aligned for success
Frequently Asked Questions
Can a healthcare facility hire both 1099 and W-2 CRNAs?
Yes, healthcare facilities can employ a hybrid model, engaging both W-2 employees and 1099 independent contractors. This approach creates an essential team of W-2 CRNAs, ensuring consistent anesthesia care, and uses 1099 CRNAs to handle excess workload or any special procedures that W-2 anesthetists may not provide.
How does IRS worker classification affect 1099 CRNAs?
The Internal Revenue Service (IRS) has specific criteria to distinguish between employees and independent contractors. To classify a CRNA as a 1099, your facility must not control how, when, or where they work beyond contract terms. The CRNA should operate independently, provide their own equipment or insurance, and have the freedom to work for multiple clients.
Do 1099 CRNAs earn more than W-2 CRNAs?
Yes, independent contractors often have the potential to earn higher hourly rates compared to W-2 employees. This is because they are responsible for covering their own taxes, benefits, and other business expenses. They can use these extra expenditures to negotiate a higher pay rate. They can also claim deductions for any work-related expenses, such as malpractice insurance.
It’s recommended to consult with financial and tax professionals for personalized advice on which CRNA employment model is better.
What are the biggest risks of hiring 1099 CRNAs?
Employing 1099 CRNAs involves several risks, including potential misclassification issues, lack of control over scheduling, and variability in staff integration. Independent contractors may not be as readily available as W-2 employees, potentially leading to staffing gaps.
Additionally, facilities must ensure that 1099 CRNAs carry appropriate malpractice insurance and meet credentialing requirements.
Which model, 1099 vs. W-2 CRNA, is best for a small healthcare facility?
For most small or rural healthcare facilities, the 1099 model is often the better fit due to its flexibility and lower overall cost. Hiring 1099 CRNAs allows smaller facilities to scale staffing based on demand while avoiding expenses like benefits and payroll taxes. However, proper classification and oversight are essential to stay compliant with tax laws and maintain care quality.
