As a gig economy worker, the benefits you are entitled to might not be as cut and dry as with some other jobs. Gig economy jobs are pretty new, which might contribute to the uncertainty around whether or not gig economy workers are actually employees, and whether or not they are entitled to health insurance benefits. Continue reading to see some options for self-employed health insurance, so that you don’t have to go uninsured as a gig worker.

What is the gig economy?

A “gig” is equivalent to doing contracted work. In general, someone doing a gig is paid to execute a task on behalf of a company he or she is not an employee of. With the rise of gig economy apps, connecting customers to businesses or individuals has become quicker and easier. The gig economy has become bigger and bigger, with more contracted, or “gig” workers carrying out various tasks for customers via apps.

Are gig workers employees?

In recent years, makers of gig economy apps which allow individuals to get episodic work have had to spend time in court defining what an employee is. Why is this important? Gig economy workers want to be classified as employees for a very key reason: benefits.

Because many of these gig economy companies are actually big businesses, they’re required to offer health insurance benefits to their employees. But the drivers, delivery people, dog walkers, etc. who use the apps to seek work are not considered employees of these companies—which means no benefits for them. The definition of an employee can be decided by a few factors. The IRS states that in order for a worker to be considered an employee:

• The business must control what work or services will be done
• The business must control how the work or service is done

This simple definition leaves a lot of room for interpretation, though. In many cases it’s not clear exactly when a worker should be considered an employee and when a worker is a contractor. National Public Radio (NPR) reported that courts may consider several different factors. 

For example, do employers give workers uniforms and/or orientation and training programs? These might point towards employees instead of gig workers. Every situation is different, and this article should not be used as legal advice. Consult legal counsel or reach out to your employer if you believe that you have been unrightfully classified as a contracted worker.

Gig economy issues

For some consumers, the gig economy is awesome due to its practicality and convenience. With a few taps on a phone, anyone can order food, get a dog walked, or get a ride across town. But the ease of this industry comes with some issues for the on-demand gig economy workers providing services on a gig-by-gig basis. Many of these issues are caused by gig employers classifying these gig economy workers as “self-employed contractors.” This allows businesses to sidestep many responsibilities they have toward employees. Factors gig workers must deal with that are not issues traditional employees face include:

• Gig economy workers don’t get benefits like sick days, health insurance, vacations days, or life insurance.
• The jobs come gig-by-gig, and there is no guaranteed future work. If consumers are not ordering food or needing rides, then no money is coming in for the gig worker. This means unsteady pay, and possibly less than the legal hourly minimum wage.

Gig economy work often requires workers to be on-demand in order to be making enough money.

The short-term work relationships that we now call gig economy work can be useful for those looking to make a few extra bucks in their free time. On the other hand, depending on these gigs as a primary source of income could pose a host of issues, especially since economists see the number of gig workers rising in years to come. The flood of gig economy workers due to constant development of and dependence on new apps means that more people will be considered self-employed contractors, and won’t get health insurance through their employers.

Types of health insurance for gig workers

Gig worker health insurance provides healthcare coverage for independent contractors who used to have a difficult time getting a policy. The Affordable Care Act (ACA) changed that, along with other types of health insurance that are affordable and provide comprehensive coverage. Here’s a look at the three common Three options available for gig workers are:

ACA health plan

The ACA health plan is a plan that you buy from the federal exchange or one offered by your state of residence. The exchange consists of plans offered by major health insurance providers that must meet minimum essential coverage standards, and a subsidy is available for those whose income qualifies them for government assistance. 

If you are under 30 years old and/or qualify for a hardship or affordability exemption, you can opt to get a catastrophic health plan, which typically has a low monthly premium and high deductible. This type of insurance provides coverage for emergency situations and worst-case scenarios, but isn’t generally as helpful for more “routine” medical expenses.

Short-term health insurance

Short-term health insurance is health insurance coverage that lasts up to 364 days and an option to renew the policy for up to three years. You can get a short-term health insurance plan and keep it as a temporary coverage until the next annual Open Enrollment Period begins. At that time, you can get a more comprehensive ACA-compliant policy.

Medicare/Medicaid

Medicare and Medicaid are federal health insurance policies, although Medicaid is a joint program that’s supported by the federal government and administered by your state of residence. Both Medicaid and Medicare have income and age requirements for qualifying. You can learn about qualifying for Medicaid on your state’s website and the Medicare website if you’re 65 or older.

Why should gig workers get health insurance?

Health insurance for gig workers provides health and financial protection from high medical bills and debilitating health conditions. 

Alt text: 24% of full-time freelancers in the U.S. reported obtaining health insurance coverage through a self-purchased plan.

To protect their health

A gig worker can’t afford to lose time to illnesses or temporary physical disabilities. Having gig economy health insurance provides the opportunity to see a physician, get health screenings, stay healthy or get help for a health condition sooner.

To protect their company

As a gig economy worker, you’re your own boss and you can’t lose time to sickness or injury. If you’re not working, you can’t earn as much or you can’t earn at all. There are no financial protections in the form of unemployment for a gig worker which means you have to rely on savings to get you through a medical emergency. 

When you have health insurance for gig workers, you gain financial assistance for your healthcare needs and free healthcare screenings to help you stay on top of changes in your health.

How to find health insurance if you’re a gig worker

Not sure how to get gig worker health insurance? eHealth can help. Our health insurance screener is designed to make it easy for you to figure out the type of insurance you need, compare plans side by side, and add optional coverage for dental and vision. All the information is laid out in front of you, and our team of insurance experts are available to answer any questions you have as you choose a health plan that’s right for you.