As a gig worker, you get to be your own boss — and buy your own health insurance. Here’s what you need to know about getting the coverage you need.

1. How big is the gig economy?
2. Why do gig economy workers need insurance?
3. What health insurance options are available for gig economy workers?
4. What is an Affordable Care Act plan, and how does it work?
5. What are short-term medical plans, and how do they work?
6. What is supplemental insurance, and why might I need it?
7. How do I choose which supplemental plans to buy?

A gig can mean any type of self-employment, such as freelance work, a part-time job, or other work that isn’t full-time or permanent.

If you’re a full-time employee, you have several legal protections, including the ability to earn a minimum wage and get workers’ compensation (if you get sick or hurt on the job) or disability insurance (if you get sick or hurt outside of work). Employers must also take money out of your paycheck for Social Security. And many employers offer health insurance.

As a gig worker, you don’t have those protections. Since you’re your own boss, you have to do all that stuff for yourself.

So, what is it like being your own boss in the gig economy? Find out how to navigate the gig economy — and make sure that you get the types of insurance you need, when you need them most.

Self-employed and need health insurance for a limited time? Compare short-term health insurance plans now.

How big is the gig economy?

Thinking about joining the gig economy? You’ll have some company. A 2023 report by the Federal Reserve estimated that 16% of all U.S. workers work for themselves. Even if you limit that just to companies like Uber and Instacart, gig workers make up about 3% of the total workforce. That’s millions of Americans.

Why do gig economy workers need insurance?

If you work for a company, you may get benefits such as health insurance, life insurance, and for some, vision and dental insurance. But if you are your own boss, you’d have to buy those things for yourself. And without that coverage, a health care crisis could turn out to be very expensive.

“You don’t have a whole lot of cash lying around as a gig worker,” says Eric Starke, a licensed UnitedHealthcare insurance agent based in Fort Lauderdale, Florida.

Things could get even worse if you’re not able to work for an extended period of time. “In addition to this, gig workers do not receive paid time off or workers’ compensation if they get hurt on the job,” says Tim Connon, a licensed UnitedHealthcare insurance agent based in Tampa, Florida. “This can create big problems if a gig worker is not insured on their own.”

What health insurance options are available for gig economy workers?

If you’ve just joined the gig economy, you might be wondering what kind of health insurance is available to you. Depending on your current situation, you may have access to insurance in one of the following ways:

• Consolidated Omnibus Budget Reconciliation Act (COBRA)
• Medicare (if you’re 65 or older; it’s also available for people with end stage renal disease and those with certain disabilities)
• Your spouse’s workplace plan

If those options don’t work for you, you have 2 other options:

1. You can get an Affordable Care Act plan. That’s a type of government-run health plan that offers certain “essential” benefits, like preventive care.
2. You can apply for a short-term medical insurance plan, which is underwritten by Golden Rule Insurance Company, and could cover you for a limited amount of time.

Did you know you can include children on short-term plans in many states? Explore short-term health insurance plans today.

What is an Affordable Care Act plan, and how does it work?

The Affordable Care Act (ACA) is a law that the federal government passed in 2010 to offer health coverage to most Americans, regardless of whether they have a preexisting condition like cancer. You can join an ACA plan if you:

• Are not in prison or jail (incarcerated)
• Are a U.S. citizen
• Don’t have Medicare coverage
• Live in the United States

ACA plans must follow a series of federal requirements. Each plan must cover 10 essential services, including:

• Ambulatory patient services (outpatient hospital care)
• Emergency services
• Hospitalization
• Pregnancy, maternity and newborn care (both before and after birth)
• Mental health and substance use disorder services, including counseling and psychotherapy
• Prescription drugs
• Rehabilitative and habilitative services and devices (services and devices to help people with injuries, disabilities, or chronic conditions gain or recover mental and physical skills)
• Laboratory services
• Preventive and wellness services and chronic disease management
• Pediatric services, including oral and vision care (adult dental and vision coverage aren’t considered essential health benefits)

ACA plans are grouped into metal categories: bronze, silver, gold, and, in some areas, platinum. What you pay for each of these categories is determined by how you and your insurance company split the cost of care — not by the quality of care.

So, for example, you can choose a bronze plan, which has the lowest monthly premium (bill) but higher out-of-pocket health care costs. The opposite is true of a platinum plan, which has the highest premium per month but the lowest out-of-pocket costs.

When and where can I sign up for an ACA plan?

You can sign up for an ACA plan only at certain times of the year, unless you experience a special situation such as losing your insurance, getting married or having a child. That is called a Special Enrollment Period, or SEP. In most cases, you must apply within 60 days of the event itself, so it’s important not to delay.

If you were to quit your job to join the gig economy and therefore lose your employer-sponsored health plan, it could open an opportunity to sign up for an ACA plan.

ACA’s Open Enrollment Period (OEP) runs from November 1 through January 15 each year, and your coverage will start on either January 1 or February 1. Depending on what state you live in, though, that period could be different.

What are short-term medical plans, and how do they work?

A short-term medical insurance plan is only good for a limited amount of time.

It’s also worth noting that short-term plans don’t have to meet the same requirements as ACA plans. You are subject to medical underwriting of your personal health, so your application may be turned down if you have a preexisting condition like cancer. Short-term plans aren’t supposed to take the place of a regular insurance plan either.

A short-term medical plan can be helpful if you’re facing a lapse in coverage. Perhaps you’re just testing out the gig economy and might return to the full-time workforce later. Or maybe you’re close to 65 and will soon be covered by Medicare. Short-term plans are not so helpful, however, if you plan on doing gig work long term.

“If you’re in transition between jobs, or you’ve lost your job within the past 30 to 60 days and you no longer have health insurance and COBRA’s through the roof in cost, you might want to look at a short-term major medical policy,” says Starke.

A short-term plan can also come in handy if you miss Open Enrollment and aren’t eligible for an SEP. That would be the case if you left your job 6 months ago but failed to enroll in an ACA plan within 60 days.

Short-term medical plans let you choose lower premiums and higher out-of-pocket costs or higher premiums and lower out-of-pocket costs. Many gig workers opt for plans with lower premiums to save money up front.

“It makes sense when the insured is a younger individual who is less likely to develop serious illnesses and just wants catastrophic-type coverage,” says Connon. “If they just want their yearly checkups and are not worried about anything catastrophic, that is when it’s best to have a high deductible for a lower monthly premium.”

What is supplemental insurance, and why might I need it?

Whether you end up going with ACA insurance or a short-term plan, you will likely still have some lapses in coverage. One way to fill those lapses is to purchase supplemental insurance, which can come in several forms:

• Accident insurance
• Critical illness insurance
• Dental insurance
• Hospital and doctor insurance
• Hospital indemnity insurance
• Vision insurance

One important thing to know: These plans are not substitutes for health insurance. Instead, most of them pay a lump sum benefit when you receive covered services.

The exceptions are dental and vision, where you pay a copayment to get health care services, and your provider receives a reimbursement.

How does accident insurance work?

If you have an accident — say, you trip and fall and break your leg — your accident insurance policy will reimburse you a fixed amount for services like:

• Doctor visits
• Hospitalization
• Physical therapy
• X-rays

It’s a good idea to check your plan’s brochure for all the details about your accident insurance plan.

How does critical illness insurance work?

Critical illness insurance covers situations such as having a heart attack or stroke, being diagnosed with cancer, or experiencing kidney failure. In most cases, it will pay out 100% of the lifetime benefit amount (which can be up to $50,000) after your first diagnosis of a qualifying event.

It’s important to know that you’ll need to be approved for coverage before diagnosis. That’s why it’s a good idea to check the plan brochure for details before purchasing it.

How does hospital and doctor insurance work?

Hospital and doctor insurance pays you a fixed amount for day-to-day services like wellness exams and prescription drugs, as well as for hospital services like inpatient stays and emergency room visits. For a complete run-through of benefits, check the plan’s brochure.

How does hospital indemnity insurance work?

Hospital indemnity insurance pays you a fixed amount for each day that you’re in the hospital, up to the maximum number of days allowed by the plan you’ve selected. Check the plan’s brochure for more details.

How does dental insurance work?

When you receive dental services, after a waiting period your dental plan pays a percentage of the cost of those services, after your deductible, up to an annual maximum. You can select a plan that includes just essential services like routine cleanings and simple fillings. Or the plan can cover essential services and major services like crowns and root canals. Make sure to check the plan’s brochure before you purchase it, to make sure it meets your needs.

How does vision insurance work?

If you already wear eyeglasses or contact lenses, it might be a good idea to get vision insurance. A vision plan covers annual eye exams and eyeglass frames and lenses or contact lenses (sometimes both eyeglasses and contacts).

For each service, you’ll be responsible for a copay or for charges over a set amount. For example, you might have a $150 allowance for frames and will have to cover the rest out of pocket. You can learn about all the various coverages by reviewing your plan’s brochure.

How do I choose which supplemental plans to buy?

Which supplemental plans you end up buying depends on what you need personally. For example, if you have a family history of cancer, critical illness insurance might be a good policy to buy.

If you’re self-employed or between jobs, short-term insurance could be a good option for temporary coverage. Call 1-844-211-7730 for more information.

This article contains information that is compiled by UnitedHealthcare or its subsidiaries. UnitedHealthcare does not represent all the information provided are statements of fact.

Sources:

Berkeley School of Law. “Independent contractor or employee?” Retrieved from https://www.law.berkeley.edu/files/FAQ-IndepContractorsvsEmployees.pdf Accessed March 21, 2024

Board of Governors of the Federal Reserve System. “Report on the economic well-being of U.S. households in 2022–May 2023.” June 2, 2023. Retrieved from https://www.federalreserve.gov/publications/2023-economic-well-being-of-us-households-in-2022-employment.htm

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51049-X-0524