Gig workers have enjoyed many benefits: flexibility, added income opportunities, and control over their time. But access to affordable, high-quality health insurance has not been one of the perks. Until now.
Thanks to the American Rescue Plan (ARP) passed in March of this year, more gig workers are enrolling in health insurance plans via Healthcare.gov—and they’re paying less for it.
According to new data from Stride, a benefits platform for independent workers, health insurance enrollment increased sixfold in April compared to the same time last year. Year to date, nearly as many people have signed up for health insurance as did during the annual open enrollment period at the end of 2020, the company reported.
Of rideshare and delivery drivers who have signed up for health insurance since March, 60% have enrolled in higher-tier Marketplace plans—Silver, Gold, and Platinum—a 33% jump since before the ARP became law. The higher the metallic tier, the more generous the coverage.
At the same time, the costs for coverage have gone down for these workers. The average premium for rideshare and delivery drivers dropped by more than half, from $171 in March to an average of $80 since then.
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The vast majority (93%) of independent workers got subsidies to reduce the cost of health insurance, up from 87% in March.
Perhaps most notably, 37% of independent drivers on the Stride platform are paying less than $1 per month for their health insurance, nearly double the percentage paying so little in March.
In 2020, before the ARP was put in place, 9.1 million who had enrolled in Marketplace health insurance got some form of subsidy thanks to the Affordable Care Act (ACA). But the ARP substantially expanded eligibility for subsidies and increased the absolute amount of financial assistance people can get.
People earning between 100% and 150% of the federal poverty level (FPL)—equivalent to $12,880 to $19,320 per year for an individual—can qualify for zero-premium coverage. This group used to be expected to pay up to 2% of their income toward premiums.
Eligibility for Premium Tax Credits (PTCs), one form of ACA subsidies, used to stop at 400% of the FPL, or $51,520 per year for an individual. Above that income level, people got no subsidies, called “subsidy cliff.”
The ARP takes a different approach, at least for this year and next. Instead of a sharp eligibility cut-off based on income, the ARP ensures that no one will have to pay more than 8.5% of their income on health insurance premiums, no matter how much they earn.
People on unemployment benefits in 2021 also get the maximum subsidy and pay no premiums for Marketplace coverage.
Before the ARP was enacted, an estimated 15 million Americans without health insurance were thought to be eligible for subsidies. Another 10 million who were already insured via the Marketplace were projected to be able to save money with the new subsidies.
It’s likely that many of these eligible Americans are doing gig work, an increasingly large segment of the U.S. economy. Though estimates vary, as many as 55 million people, or approximately one-third of the workforce, were gig workers in 2017.
The U.S. Secretary of Labor recently backed the idea that some gig workers should be classified as employees, which would entitle them to employee benefits.
Non-standard workers—freelancers, temporary workers, and part-time workers—are more likely to be uninsured than people employed in more standard full-time jobs. More than 30% of freelancers, for example, were uninsured compared with just 12% of employed workers.
“Clearly, there’s strong demand for quality, affordable health insurance among gig economy workers,” Noah Lang, cofounder and CEO of Stride, said in a statement.
The Biden Administration wants to extend the enhanced subsidies to meet this demand. It also hopes to permanently expand annual Open Enrollment by 30 days.
For now, though, anyone can enroll and access the subsidies during a Special Enrollment Period set to end August 15, 2021. Once that window closes, the next chance to sign up will be during the annual Open Enrollment—starting November 1 running through December 15, 2021.