Physician-owned medical and dental practices are the most common §401(h) sponsors. The fit is structural: high owner income, a small W-2 staff, and almost universal cash balance plan adoption already in place.
Why the fit is so clean
A typical 3–6 physician practice running a cash balance plan with $300,000–$800,000 of annual contribution has room for $50,000–$150,000+ of §401(h) capacity. Owner-physicians are also the most likely retirees to spend the §401(h) balance on Medicare premiums, LTC, and dental in retirement.
Coordination with the existing 401(k) + cash balance stack
Most practices already run a 401(k) with safe-harbor match and profit sharing, plus a cash balance plan. The §401(h) attaches to the cash balance plan and does not change the 401(k) at all — there are no new employee elections, no new payroll deductions.
Common objections
The most common objection is the 'forfeiture risk' — that unused §401(h) balances revert to the plan rather than passing to non-spouse heirs. For owners with significant projected retiree-medical and LTC spend, the lifetime tax savings typically outweigh the residual forfeiture risk.