In the coming decade, employees will be faced with a new set of opportunities and challenges centered around the so-called "on demand workforce," "shared economy," or as it’s commonly called the "gig economy". A study by Intuit predicted that by 2020, 40 percent of American workers would be independent contractors. Understanding healthcare options available for the gig economy is critical for employees and business owners to make informed decisions on this rapidly evolving business landscape.
What is a gig economy?
A gig economy is an environment in which temporary positions are common and organizations contract with independent workers (1099) for short-term engagements. Examples of organization platforms in the gig economy are (to name a few):
Uber
Lyft
Airbnb
Amazon Flex
Etsy
The digital age has given birth to the rise of short-term jobs. Today’s workforce is mobile with access available at the touch of a button. Smart phones have replaced the land line and have put mini computers in the palm of our hands. Work can be done from anywhere, so that job and location are decoupled giving way for employers to select the best individual. Software access and advancements have digitalized the process and have replaced some types of work as well as reduced the time to do other job-related tasks.
In a gig economy, employer can save on resources such as employee benefits, brick and mortar office space and training. Experts are now available in the field for specific projects in lieu of having on staff an employee to high-priced to maintain. Employees have improved work-life balance by being able to select jobs they are most interested in, rather than forced in a round peg/square hold employment position.
Important Things To Understand About A Gig Economy
Are gig economy employees W-2 or 1099 employees? This depends on the type of control the employer has over how work gets done. It comes down to the agreement between the employee and employer.
1099 employees set their own schedule, us their own personal method for finishing assignments, accept tasks on a case-by-case basis, can turn down offers of work, supply their own tools, and can have more than one client.
W-2 employees have assigned hours or a set work schedule, get trained by the company to perform the tasks of their job, have work assigned to them, are given the tools and materials necessary to do their job, have only one employer.
Gig workers earn less than full-time employees. On average gig workers bring home $36,500 per year versus $62,700 for full-time employees, according to White Pages published by Prudential.
Gig workers tend to work fewer hours than full-time employees.
This growing class of workers, in most cases, have to find their own health insurance since they likely don’t work for an employer offering them group benefits.
Four Common Gig Economy Worker Issues
They tend to be underinsured
Underestimate the risk of being a “Gigian”
Lack education about insurance and how it applies to their work situation
Gig workers face challenges when saving for retirement
Gig economy health insurance plans
Gig economy workers have choices about the type of self-employed health care coverage that best meets their needs. Gigians should consider costs, plan availability, benefit options, and how their choice of coverage could impact their taxes. This trend makes the ability to port and take your coverage with you very attractive as they move from one freelance job to the next. Additionally, lawmakers are putting together proposals aimed at creating a system of delivery and funding for benefits. One such state looking to address the problem and extend to workers some of the benefits commonly associated with full-time employment is Washington. In the interim Gigians have available to them the following options.
Self-employed individual health coverage with mandated benefits. Gig workers can access health care options on the Marketplace or direct through Agents and Insurance Carriers. While the ACA penalty is set to “zero” starting January 1, 2019, carriers and the Marketplace are still offering options for individuals to enroll in during the Annual Open Enrollment Period or during an IRS Qualified Life Status Change. Some gig workers may qualify for a tax subsidy if their income is less than 400 percent of the federal poverty line.
Short-term health plans. These affordable, temporary health plans provide flexibility for those gig workers needing coverage for short periods of time and may not qualify or afford traditional ACA coverage. New regulations from the Trump Administration extended short-term medical plans from the previous one to three months coverage to up to a under a full year. Applying for short-term health insurance is easy and only take a few minutes. In most cases approval is instant.
Where to buy gig economy health insurance
AJM Associates offers Individual and Family Health Insurance plans to those who do not receive health benefit packages from their current employer, or are either self-employed, unemployed, or a student. Our various types of Individual and Family Health Medical Insurance options include:
HMO (Health Maintenance Organization)
EPO (Exclusive Provider Organization)
PPO (Preferred Provider Organization)
POS (Point-of-Service)
HSA (Health Savings Account)
Short Term Medical
Each insurance carrier and option differ in cost and benefits, it is important to discuss your unique needs with an insurance expert, like AJM Associates, who can keep you, your spouse, and your children covered under the right plan at a price you can afford. At AJM Associates, the right plan doesn't just stop with Medical Insurance. We provide additional lines of coverage including:
Dental Insurance
Vision Insurance
Disability Insurance
Life Insurance
International Travel Insurance
The Simple Dollar: Guide to Combating Medical Debt.
With medical debt being one of the most commonly cited reasons for bankruptcy the below guide discusses helpful options for dealing with medical debt and includes a table of condition-specific assistance programs. It also aims to help people secure a plan for repaying their debt, even if already in collections.
Click here for a link to the guide: https://www.thesimpledollar.com/guide-to-combating-medical-debt/
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