Zurich's Chris Howard on access to health and wellness services for gig workers
People and WorkViewpointsArticleMay 12, 2023
Chris Howard is Head of Market Management for Life, Accident and Health for Zurich North America, where he is responsible for managing and driving growth of our Life, Accident and Health business by collaborating with strategic partners and distributors.
This is a second Q&A in a series looking at how Zurich is helping curb out-of-pocket spending on healthcare for independent contractors, including gig workers. The first conversation featured David Fike, Head of Life, Accident and Health for Zurich North America and can be found here.
Zurich currently offers several different types of coverages specifically for gig workers today. As the gig economy continues to expand at a rapid pace, we sat down with Chris to discuss how the Life, Accident and Health business is gaining insights about the health and wellness concerns of gig workers to better understand their needs and develop solutions to address them.
Q: The Life, Accident and Health team recently talked to gig workers about their concerns regarding healthcare. Why did you do this and what are you learning?
A: The gig economy is a unique and rapidly expanding marketplace. In 2020, there were 23 million gig workers in the United States. Since then, it’s grown to more than 73 million people and is expected to increase to nearly 90 million people by 2026. Given the independent contractor nature of the workforce, 54% do not have access to any employer-provided benefits and only 40% have some type of medical insurance. With the continued migration towards this “on-demand” workforce paired with the sky-rocketing cost of healthcare, there is an increasing gap between earned income and the affordability of rising deductibles.
Even in traditional employment, the financial burden of healthcare continues to shift to employees through increased out-of-pocket premiums, higher deductibles and decreased coverage. Many gig workers do not have access to employer-sponsored coverage and either choose to be uninsured, are on Medicaid, or use the Affordable Care Act (ACA) marketplace to obtain coverage. We see a big opportunity in this space to provide solutions to both complement current healthcare plans and provide alternatives for care if they do not currently have health insurance. In short, our conversations were about uncovering what they worry about the most, how they feel about the platforms they work for and how they access healthcare today.
Q: Were you surprised by the responses?
A: Yes and no. Gig workers are like many of us in the U.S., concerned about inflation and rising living expenses. They have chosen a profession that affords them the freedom and flexibility to focus on long-term financial and educational goals. Many with families have found on-demand work — working on their own schedules — to make more sense to care for their children rather than working a full-time job often just barely earning enough to cover the high costs of childcare. Gig work also can act as a bridge in-between jobs.
Regarding healthcare, there was significant confusion and frustration surrounding how to access health insurance in general. Many avoided seeking medical attention altogether due to the complexities and costs involved. While concerning, this did encourage several to focus on mental wellness, fitness and nutrition goals as a means to avoid healthcare spend.
Q: What pain points do gig workers have regarding health insurance?
A: Where and how to access it. There was an underlying theme of confusion, frustration and anxiety over obtaining medical coverage. Some suggested that in traditional employment, there are benefit advisors who support employees in choosing medical and other coverages. This group relies on self-research and some felt it could be intimidating, often overwhelming to try to navigate the world of health insurance.
High deductibles are another concern. The average 2023 ACA deductible for an individual is $1,450 for single coverage and $2,900 for family coverage. If you couple that with the fact that 47% of U.S. adults can’t afford an unexpected expense of $500, those deductibles can have a significant impact in the event of an injury or sickness. Also, given the transactional nature of gig work — that if you do not work, you do not earn — an injury or sickness could impact the affordability of basic living expenses such as rent and food.
Q: Is there a role for gig platforms to play in providing access to health and wellness offerings to their independent contractors?
A: In 2021, a study showed that 46% of gig workers felt the benefits offered by the platforms they worked for were unfair. Consensus was that accessing health and wellness offerings through gig platforms could provide a “safe space” via educational resources that could complement what is provided through the ACA marketplace. Many suggested this could strengthen platform loyalty, which could be further enhanced should that platform make it convenient to pay for benefits through payroll deduction, especially if it was partially funded by the platforms.
Q: Where do you see the gig economy in five or 10 years from now?
A: Projections estimate that 50% of our U.S. workforce will be independent contractors by 2030. Not having a plan in place to support this community could be a lost opportunity to provide healthcare access to half of the U.S. population. With ongoing litigation and regulatory discussions to classify gig workers, continued focus on how both state and federal regulatory agencies approach this workforce is paramount. We feel this represents significant opportunity for platforms to engage their independent contractors by sponsoring health and/or wellness benefit packages.
Q: How will gig workers access health insurance in 10 years?
A: With the ever-changing regulatory environment in this work demographic, it’s difficult to predict. By easing the anxiety and frustration gig workers face when seeking healthcare benefits and delivering unique solutions through technology they already use, we can deliver coverage that can help fill the gaps they are currently experiencing. Should platforms choose to participate in delivering these benefits, it has the potential to increase the loyalty of these workers, as 46% of gig workers currently feel their benefits are unfair. Offering and supporting supplemental plans could demonstrate an appreciation for the challenges gig workers face, increase contractor engagement and reduce potential distrust and negative perceptions.
Learn more about Zurich’s current offerings for gig workers.
Sources and related reading:
Anderson, Monica, et al. “The State of Gig Work in 2021.” Pew Research Center. 8 December 2021.
JME Insurance Agency. “IRS Announces HAS, ACA Limits for 2023.” 11 August 2022.
Willoughby, Lee. “The Future of Work: The Gig Economy.” LinkedIn. 26 September 2022.