Employment benefits for freelancers and gig-workers are coming
You choose your work hours, avoid rush hour traffic and commuting, and never sit through another dreadfully long meeting. Nope, you’re not dreaming. Welcome to the life of a freelancer, a gig worker, or a contractual worker who engages in flexible, temporary work. Almost a third of all US workers engage in some kind of gig work, with some estimates pinning that over half of all US workers will be a part of the gig economy by 2027.
Contributing $1.28 trillion to the U.S. economy, and growing at a rate of more than 4% per year, the gig economy is changing our definition of “work”. Millennials are behind this push, with demands for flexibility and autonomy, supported by advances in remote and productive technologies. According to an MBO Partners report published in 2019, 38% of all gig workers in the US are Millennials closely followed by Boomers at 33% and Gen X at 29%.
‘All that glitters is not gold’
Gig workers include freelancers, contract workers, ride and delivery share workers (e.g., Uber, Grubhub) and any individual hired for a particular task or amount of time by a number of clients. The problem for gig workers and small businesses…
Usually, neither the temporary worker nor the contractor is covered by the same rules and regulations as a typical employer-employee relationship would have covered. Gig-workers, by this definition, can’t access typical employment benefits or employer sponsored health plans. As a result, being a freelance or gig worker can be risky, especially with a family or dependents.
A 2018 Deloitte study revealed that when compared to their full-time employed counterparts, most millennial gig workers make approximately 10% less. While that’s concerning already, when you factor in lack of employment benefits, such as employer sponsored health plans, general liability or workers compensation, it’s clear that gig workers are a vulnerable population.
David Ballard, a psychologist at the American Psychological Association, links gig-employment with the increased likelihood of both deteriorated mental health and negative consequences that stem from mental health issues. Due to the temporary nature of gig work, general uncertainty surrounding income streams and the constant pressure to perform above expectations, gig workers often suffer from anxiety, burnout, and in extreme cases, depression.
These challenges can be seen playing out specifically in the rideshare world. A “full-time” Uber or Lyft driver may have to start driving early and end late at night just to make ends meet, sometimes even using both applications at once to maximize customers. Their job security is further challenged due to oversaturation of the market with a huge influx of drivers. A study by Georgetown University explained that about 33% of Uber drivers took on debt as a result of their work and safety. Moreover, about 30% of drivers reported physical assaults or safety concerns.
How are Gig Workers being supported?
The deck is further stacked against millennials – the largest segment of the freelancing & gig-working lifestyle – when we look at their responsibilities. Millennials are already burdened with liabilities such as paying off their university loans, which has risen exponentially over the past decade – from $800 billion to $1.6 trillion dollars in outstanding debt. Moreover, there are other rising fixed expenses for millennials, such as planning a family, wedding expenses, raising children, paying for a mortgage and looking after aging parents. Fixed expenses with a variable income exposes millennials to high risks related to lacking medical insurance.
Large corporations offer extensive health benefit programs, workers compensation, general liability and other benefits to ensure that their employees and their families are protected. However, the same is not typical for freelancers and gig-workers. As the United States continues to boast the unfortunate status as the only industrialized nation without universal health care, lack of affordability remains a significant factor in health care accessibility. For instance, fear of accumulating debt and avoidance of out of pocket costs prevents gig workers from seeking necessary proper medical treatments. This is of special concern given the association between gig-work and poor mental health.
According to data published by the US Department of Health and Human Services, upwards of 15% of the US population, or 20 million people, in the age bracket of 18-44 years were without health coverage.
This is alarming under normal circumstances. In the midst of a global health pandemic, this is an immediate concern.
Jauntin’ / UnderWing
Freelancers, gig-workers, independent contractors and employees at startups and small businesses are the driving force in the economy. However, as stated previously, they lack access to the same level of benefits and support as their corporate counterparts. Individuals with this employment lifestyle, such as wedding day photographers, uber drivers, trades people, consultant accountants and more, need health coverage, workers’ compensation, general liability and business interruption among other health benefits.
It is predicted that by 2027, approximately half the workforce will work in non-traditional working arrangements. This means insurance companies need to adjust their policies to welcome the new market and address the needs of gig workers. By focusing on this emerging market, Jauntin’ has already begun to make its way inland. Leveraging a product innovation platform, Jauntin’ brings speed to market and limits market testing risk with affordable product delivery. In addition, Jauntin’ has been able to capitalize on the experiences of their direct-to-consumer (D2C) brand UnderWing to establish new channels of distribution that enable freelancers and gig workers to access insurance and other workplace benefits directly on the platforms they use every day for work.
The UnderWing Health + Wellness program was launched as a monthly subscription without deductibles to provide affordable access to basic health services. With 24/7 access to physicians through telemedicine, no-cost prescriptions for most common ailments and no-cost mental health and assistance services, the program enables gig workers and their families to cover most of their out-of-pocket healthcare expenses at nominal costs. For instance, Grubhub has now embedded access to this program at a special price for its network to improve the lives of those who work relentlessly to deliver food.
By harnessing the growing demands of the gig economy, Jauntin’ hopes to use the aggregate buying power of this thriving economic trend to allow gig workers to have an equal share in the social support systems that have been available to the traditional workforce. With the ability to integrate legacy systems while providing an easily customizable user experience, Jauntin’ can undoubtedly leverage the power of traditional insurance carriers to embrace the ‘new normal’ of work.
The new reality of work is changing rapidly: whether or not they know it, insurance providers are in a rat race to meet the demands of an unknown market. Jauntin’ is their much-needed “tour-guide” in capturing the mobile, on-demand and flexible workforce.