Cough, Cough…Health Coverage in the Gig Economy | DCR Workforce Blog

Cough, Cough…Health Coverage in the Gig Economy

An increasing number of jobs in the economy are going the “gig” way, as companies move to contingent workforce programs engaging agency temps, on-call workers, contractors, part-time workers and freelancers as workers prefer the work-life balance often offered by gig work. According to the Freelancers Union study approximately 53 million Americans, or 34% of the workforce, are freelancing, which is 700,000 more than last year. Most of these jobs offer benefits such as health insurance.

Recently a colleague’s brother flew in from their native country, planning to have a wonderful time in America. Young and optimistic, he decided not to buy any health insurance for his trip. Toward the end of his visit, he suddenly developed a terrible infection. To treat it, he was forced to cut his visit short and fly back home, in excruciating pain. Lack of proper healthcare is a nightmare, for the patient as well as their family, and planning is never more important than when obtaining health insurance.

According to estimates, 35% of gig workers are uninsured, against 10.5% of all Americans who obtain insurance for themselves. And 55% of these uninsured are looking to obtain health insurance as soon as possible. Take a dispassionate look at the options workers in the gig economy have for ensuring that their health is insured.

How does the Affordable Care Act help gigsters?

The Affordable Care Act (ACA) has made it possible for Americans who don’t have a traditional job get health insurance.

  • Every year, a worker has the opportunity to find and buy appropriate insurance as per the available plans under the ACA.
  • Insurers are forbidden to refuse insurance to people with preexisting medical problems such as cancer.
  • Insurers are not allowed to set annual or lifetime limits on health coverage for a given customer.
  • Insurers are forbidden to charge women higher prices.
  • Youngsters may be included on their parents’ policies up to age 26, which ensures that unemployed or underemployed youngsters in a bleak job market are assured health coverage, which would have otherwise been beyond their means.
  • Between Medicaid and the ACA, most low-income families now have access to quality healthcare.
  • Approximately 20 million Americans obtained health insurance through ACA health plans or the expanded coverage through Medicaid, available in 31 states.

Issues in healthcare still remain

  • The cost of insurance is one of the largest components of costs incurred by workers in the gig economy, who don’t have access to employer-sponsored insurance. Many of them find the insurance costs significantly impacting their take-home pay.
  • Inconsistent income as a gig worker also makes it difficult for a worker to plan health insurance costs with confidence. It also makes it difficult for them to project a year’s income by estimating their future earnings to claim applicable subsidies.
  • Some workers find it hard to manage their own insurance by finding health insurance, navigating subsidy qualification and learning how to fully utilize the health plan. While some leave available subsidy opportunities unclaimed, others are going uninsured.
  • Year on year, it gets harder for gig workers to keep track of their insurance needs, the probable costs and their benefit offerings. The changing premiums, deductibles, out-of-pocket costs and other details make this decision downright impossible to make on time. Most of them keep postponing a decision, as they keep mulling over their choices – go with current plan or switch to new one…and if new, which one?
  • One estimate shows that 85% of gig workers also failed to claim the tax deduction for the health plans purchased by them when filing their taxes.

Since the introduction of the ACA, plan prices have been going up, making it harder for gig workers to obtain health insurance. The nightmarish scenarios which can affect the uninsured are many including:

  • An old tumor or disease returns
  • A child arrives prematurely and needs special (read, highly expensive) care
  • An arm or leg breaks in an accident or other accidental injuries occur
  • A health issue requires hospitalization (which may cost $10,000 per night for the uninsured)

There’s also the concern about the changed political environment, which sees opponents to the Affordable Care Act promising to eliminate the ACA, leaving the 11 million people who obtained health insurance (and peace of mind) under the law, unprotected.

What’s your take on the gig life and health care coverage? Has it affected you negatively or positively? Share your thoughts with us in the comments.

The content on this blog is for informational purposes only and cannot be construed as specific legal advice or as a substitute for competent legal advice. They reflect the opinions of DCR Workforce and may not reflect the opinions of any individual attorney. Do contact an attorney for advice specific to your issue or problem.
Lalita is a people/project manager with extensive experience in operations, HCM and training and development across industries like banking, education, business consulting, BPO and information technology. She believes in a dynamic approach to life and learning as change is the only constant.