Today’s economy is transforming rapidly as more people take on freelance work, also known as gig work, to earn money. These workers fall under the labels of gig workers, freelancers, and contract workers. What these workers all have in common is that they do not have regular employee benefits. Since health insurance is tied to employment, these workers do not have access to this critical benefit. They also don’t have access to retirement plans, workers’ compensation, and other benefits that are subsidized by employers. Gig workers have to fund these benefits themselves and often face higher market rates.

Companies like Gild Insurance and others are stepping into this extremely important gap in coverage and providing a service to these workers.

A New Economy With New Problems

It’s estimated that 36% of the workers in the United States are becoming gig workers for supplemental income, but as many as 9% of the American workforce are doing it full-time to support themselves and their families.

Gig workers are those who work for apps like Uber, DoorDash, and other app delivery services and are paid per task completed. Freelancers are often creatives with specific skills who are self-employed and work for multiple clients at a time. Contract workers are contracted to work on specific projects with companies for a predetermined time and do not have regular employee benefits like the rest of the company’s workforce, even though they work alongside them.

All of these independent workers either lack employee-provided benefits or are responsible for obtaining them. This includes retirement, workers’ compensation, health insurance, and more.

Addressing This Critical Gap

In various states, lawmakers have attempted to find a solution to this important issue, but the fact remains that gig workers, freelancers, and contract workers are vulnerable to unexpected illnesses, injuries, and hardships.

Without health insurance, gig workers, freelancers, and contract workers have to pay out of pocket for office visits, medications, treatments, and more. This can lead to them delaying treatment, putting them at risk for more severe illnesses that aren’t detected early. It also puts their families in a difficult position if funds are low and a family member is ill.

Workers’ compensation is a benefit that gig workers have been fighting for in various states. Being injured on the job can have a very detrimental effect not only on the worker’s health but also on their ability to earn.

As government officials attempt to find resolutions, the reforms are moving slowly and don’t always address the needs of workers outside the traditional workplace. These workers are turning to startups to find the employee protections that aren’t accessible to them by other means.

The Response From the Market

Major insurance providers haven’t been developing products to address the needs of workers independent of traditional employment. When they do offer insurance policies, they are usually more expensive and don’t offer as much coverage.

Digital native platforms have been stepping into the gap left by regulation and insurance companies. These companies offer insurance products that are geared to fit the needs of independent workers. Some companies offer a variety of options by either helping workers join a pool to increase their purchasing power or analyzing the workers’ specific business-related risks and offering tailored insurance.

For example, Yourgild is designed to assist people in the gig economy in finding and purchasing insurance. Its online platform is user-friendly, and people can quickly see what their options are and purchase through the platform. It also has a community of freelancers that can offer advice and support.

As the gig economy grows, the needs of the independent workforce will continue to compel state legislatures and the market to respond with viable solutions to bridge the benefits gap.