Expanding employer contributions to health insurance for gig workers and part-time employers improves the health of the public and economy
Through the bipartisan effort in Congress, gig workers were able to receive stimulus funds. The need to assist part-time and gig workers during the pandemic, however, merely highlights the same need to address the inequities that exist among categories of part-time and full-time workers. Small improvements to this system could result in tremendous public benefits and improve the livelihoods for our neighbors and coworkers.
Prior to the 2020 COVID-19 pandemic, a key policy issue in the 2020 primaries focused on the role employers play in making health care available. Unlike most developed countries, U.S. residents generally get their employment benefits through their employers. This enables the marketplace to offer a wide range of health plans, to enable employers to compete for workers by offering premium benefits and recognize the importance of unions in negotiating for quality benefits.
The model, while it has some benefits, has significant downsides. Millions of individuals are not employed, leaving them without health insurance. Many other workers feel tied to their employers because the risks of switching employers come with fears of losing health coverage, notwithstanding the improvements regarding preexisting conditions that were enacted with the Affordable Health Act. In addition, the wide variety of plans available, while a benefit in some contexts, also means that a significant fraction of those plans provide limited or insufficient coverage.
The pandemic provides a powerful reminder that health care is both a personal benefit and a public good. Every untreated individual is at tremendous personal risk from the Coronavirus, but in addition, that person is putting co-workers, health workers, store clerks, fellow subway passengers, and the entire community at risk of infection. The public good far outweighs the private interest, meaning that it is in the community’s best interest to be sure that all members of the community get health benefits — even if those community members do not prioritize this need.
Because of thresholds in the employment laws, the nature of the employer’s role in securing the public good of health insurance has become unduly frayed and weak. By fixing this one aspect of the health system, the U.S. can move meaningfully forward to improve the health of its individuals and its communities. Specifically, this requires that state and federal law eliminate the high thresholds before a person becomes eligible for health coverage, and replacing this system with a proportionate model.
Currently, the Affordable Care Act requires employers to offer health insurance to employees working at least 30 hours per week or 130 hours per month. Under this proposal, employees working less than 30 hours per week would be entitled to proportionate health care coverage. A conversion table would be established for employees who are paid based on work output rather than hours. In this way, if a person were driving full time, split evenly between Uber and Lyft, each company would pay half the insurance obligation. If a seamstress worked five hours each week for a bridal shop, the seamstress would be entitled to 1/6th of the insurance covered. Of course, there will need to be regulations providing the conversion tables, and the math, but it is not that difficult.
To make it work, insurance companies would need to offer qualifying plans to the gig workers and other part-time employees. Some companies would likely give their part-time employees opportunities to buy up to the rest of the plan. Regulations would allow companies to contribute to each other’s plans (such as in the example of Uber and Lyft). But there would also be the need to use and expand the range of insurance plans available to individuals under the Affordable Care Act. By adding employer contributions, these plans would grow through the addition of healthy, low-risk patients, improving their performance and increasing the public good.
This approach is not a step toward single-payer health coverage, but it is an important improvement for the health of the gig economy workers and the general public. As a number of centralized, large health plans emerge, then like cell phone providers, auto manufacturers and other industries, the efficiencies of scale and continued competition would likely drive the industry towards having three to five large national standards, rather than the inefficient and wasteful competitive model that presently exists.
The goal for such a change is clear. More and more workers are not full-time workers. Many companies intentionally keep hours below the minimum for insurance coverage, creating a public harm to the health of the community in addition to being unhelpful to the individual workers. In addition, the proposal is not radical for either those preferring a private health care system and those interested in a public, national health care model. By insuring the part-time and gig economy’s workers, both sides of that debate can claim victory.
The 30-hour-per-week rule is an arbitrary line that no longer reflects the modern working environment. By erasing that line, the public health can be improved and the individual lives of those on whom the economy depends will receive the benefits they deserve.