Individual and Family
The gig economy refers to the growing number of people who work as contract and freelance workers. Some common examples might include drivers for ride-sharing services, contract software developers, and freelance writers. Very often, a third-party website or mobile app will connect remote workers with employers. However, some freelancers may work directly for clients or work through more traditional temporary agencies.
The simple answer is that when working a gig economy job, you’re probably working on a gig by gig basis, and are considered a contracted worker—which means the employer is not required to offer you health insurance. Companies don’t qualify these workers as regular employees and will report earnings with a 1099 tax form instead of a W-2. In most cases, these workers cannot expect gig economy health insurance or other employee benefits from their employers. At the same time, these freelancers can still buy various kinds of self-employed health insurance from many health insurance companies.
The Bureau of Labor Statistics says that it cannot supply one legal definition of the gig economy. The government loosely defines it to describe situations where workers get paid for tasks or projects and can work for multiple employers. Some examples of industries that have increased the number of freelancers that they rely upon include creative work, transportation, and technology.
These are important things to understand about the gig economy:
Gig economy employees have choices they can make about the type of self-employed health insurance that will serve them best. As with other kinds of insurance, workers should consider costs, benefits, and in some cases, how different options can impact taxes.
A previous eHealth article about gig economy health insurance noted these common sources of coverage:
No law prevents employers from offering 1099 workers access to their group health insurance plan. Some businesses could even benefit from extending coverage to contract or freelance workers. Since laws don’t force employers to offer any gig workers benefits, companies could select those contract employees who they have a consistent relationship with. The employer also doesn’t have to offer to pay part of the premium.
Employers may decide to offer gig economy health insurance for a few reasons:
Freelancers have plenty of options when they want to buy gig economy health insurance for themselves and their families. The quote system at eHealth can display multiple premiums and plans within seconds for self-employed health insurance, medical packages, short-term medical plans, dental coverage, and much more. Small employers who want to consider offering gig economy health insurance to contract and freelance employees can even research group health plans.
This article is for general information and may not be updated after publication. Consult your own tax, accounting, or legal advisor instead of relying on this article as tax, accounting, or legal advice.