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The Precarious Relationship Between Gig Workers and Employee Benefits

Gig workers are severely lacking health insurance coverage and other financial safety nets, according to a study by Legal & General.
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the precarious relationship between gig workers and employee benefits

Gig workers are severely lacking health insurance coverage and other financial safety nets, according to the fourth segment of a broad study sponsored by Legal & General, “U.S. Gig Economy, Part 4: Gig Workers Aren't Meeting Their Health, Life Insurance Needs."

While there are various benefits to gig work, including independence, flexibility and the ability to earn more than traditional employment in certain fields, the study highlighted a number of downsides. As many as 48% of those surveyed noted that gig work had negatively affected their ability to access health insurance, while a staggering 23% of gig workers have no health insurance. Even more concerning, only 69% of parents surveyed had health insurance, meaning nearly 1 in 3 parents were uninsured.

“Being uninsured means forgoing filling a prescription, skipping a recommended medical test, treatment or follow-up, and neglecting pain or discomfort because of cost—any of which can snowball a minor health issue into a more serious ailment," the study pointed out.

The pandemic only exacerbated gig workers' precarious medical care situation. Almost half claimed gig work negatively impacted their access to paid time off during the pandemic. “Lack of sick leave creates a vicious cycle—gig workers must take unpaid time off when they're sick, meaning they have even less financial wherewithal to aid or speed their recovery," the study said.

The study also found that many gig workers are stressed and frustrated by the lack of a social safety net their working arrangement offers. Other key social and financial safety nets were also poorly represented among gig workers, the study notes, including life insurance, disability insurance and retirement savings.

Only 4 in 10 of those surveyed have life insurance, even if they had a child or partner, while 33% said gig work negatively impacted their access to disability insurance—and 53% said the same about retirement savings.

Part 3 of Legal & General's deep dive into the gig work economy, “Why Gig Work Is Becoming a Choice for So Many," revealed that 82% of gig workers prefer it because of the flexibility, freedom to take on more work and to earn more. Still, Part 4 of the study found that 42% say access to health care, life insurance and a pension would be the most influential ways to lure them out of gig work. For the remainder, there is hope that these benefits may be part of their lifestyle at some point in the future.

The report notes that “a significant cultural shift has occurred in some prominent gig work platforms," where some are providing independent contractors with some aspects of the stability that comes from traditional employment. For example, Caviar, a food delivery service, has differentiated itself by offering occupational accident insurance.

“There's no reason this same can-do spirit can't be harnessed to remedy the shortcomings of this pattern of employment: the stress that comes from having insufficient social, health and or financial safety nets," the study said. “Independent contractors should have access to affordable, high-quality medical coverage, life insurance, and retirement planning—allowing them to enjoy stability without sacrificing their freedom and flexibility. But we need a roadmap to get there."

Will Jones is IA editor-in-chief.

Monday, June 12, 2023
Digital Edition