Accident and Critical Illness Insurance for Gig Economy Workers

Individual and Family

Accident and Critical Illness Insurance for Gig Economy Workers

Published on July 13, 2018


If you’re a contracted gig economy worker, you’re probably not considered an employee. And unfortunately, this means you likely won’t be benefiting from employer-sponsored health insurance.
The good news is, even if plans on the individual market are too expensive for you, there are alternatives like accident and critical illness insurance that could provide you with coverage in the case of a medical emergency.

Self-employed health insurance for the gig economy

With the rising prices of individual health insurance, self-employed and contracted individuals like gig economy workers may be finding that market plans are simply too expensive.
Luckily, the individual mandate has been repealed, meaning that in 2019, nobody will be facing a penalty for not having ACA-compliant major medical health insurance (such as the plans you’d find in the individual market). This means the door has opened up for people who buy their own health insurance, like many who work in the gig economy. Non-compliant, but more affordable health insurance alternatives like accident and critical illness insurance are on the table, and won’t result in a penalty associated with the individual mandate.

What’s the difference between major medical health insurance and accident and critical illness insurance?

If you’re shopping for your own gig economy health insurance, you’re probably worried about the cost. For many, major medical health, or Obamacare insurance is too expensive. Some of the characteristics of this type of coverage include:

  • Ten essential health benefits
  • A deductible
  • A premium
  • An out-of-pocket maximum
  • Coinsurance
  • Co-payments

Essentially, with “traditional” health insurance, you’ll need to meet your deductible before insurance contributes any money towards your medical bills. Coinsurance is the percentage that the insurance company will pay once you’ve met your deductibles. And copayments are usually set prices that you pay out-of-pocket for common medical expenses, like prescription drugs, or visits to doctor’s offices.
With accident and critical illness insurance, you’ll usually have lower monthly costs, and cash payouts in the case of a covered illness or injury occurring. Although these products work well lwhen paired with a traditional health insurance plan, you can also buy them on your own in order to make sure you’ll have financial help if you fall ill or severely injure yourself.
Keep reading to see how these coverage plans could work well for someone working in the gig economy.

What is accident insurance?

If you have an accident, the medical bills can start to add up. In order to avoid financial ruin from all the costs associated with serious accidents, you can insurance yourself with accident insurance. Unlike health insurance plans, which pay the doctors and hospitals, your accident insurance company will make a direct payment to you in order to cover medical bills related to an accident. Some of the accidents that might be covered include:

  • Breaking a limb
  • Loss limbs or digits
  • Burns
  • Lacerations
  • Paralysis
  • Accidental death (payout will go to your chosen beneficiary)

If you think about it, working certain gig economy jobs probably leave you at risk of bodily harm—for example, a gig-based dog walker probably faces more risk of being bit by an animal or injured while crossing a busy street than someone who works in an office all day.
Learn more about the different types of accident insurance plans and the services usually covered by accident insurance with eHealth’s accident insurance guide.

What is critical illness insurance?

Critical illness insurance is similar to accident insurance in that it pays a cash sum directly to you, but it’s applied in the case of an illness instead of an injury.
If you’re diagnosed with certain covered illnesses, then you’ll be given a cash payout that you can spend on whatever you want (since it’s paid directly to you, rather than to hospitals or doctors). Some people refer to critical illness insurance as “life insurance for the living”.
Refer to eHealth’s guide to see what illnesses are covered and different plans and coverage levels to choose from.
If you’re a gig economy worker, critical illness serves as a great backup plan to help you stay financially afloat in the unfortunate event of serious illness.

Why is this coverage good for gig economy workers?

Insurance products like critical illness insurance and accident insurance are actually great for anyone who wants coverage against medical emergencies. If you won’t benefit as much from the ten essential benefits offered on Obamacare plans, or you can only afford the minimum coverage, these products are probably a good fit for you. It is important to keep in mind that with these products, you will not receive as much coverage as you would with an Obamacare, or major medical plan. These products are not a substitution for health insurance, although they can be purchased without a traditional health insurance plan.
According to eHealth’s guide on accident and critical illness insurance, you should expect to pay around $15 to $50 a month for a typical accident plan, and from $50 to $150 a month for a critical illness plan. Compared to the average monthly price of $440 for an unsubsidized individual plan, gig economy workers who don’t expect to need much medical care outside of emergencies could end up saving quite a bit of cash by opting for an alternative to Obamacare plans.

Learn more about accident and critical illness insurance for gig economy workers

If you want to know more about these insurance products, visit eHealth’s 3 step guide to understand both accident and critical illness insurance.
If you feel like one of these products is right for you, then visit eHealth to start comparing quotes on plans. On our website, you can explore various alternatives to ACA plans, which be great ways to get coverage while working as a contracted worker in the gig economy.
This article is for general information and may not be updated after publication.

We’ll let you know when we publish anything new.