Health Law Repeal Could Force Some Gig Workers to Go Full Time

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By Madison Alder

As the possible repeal of the Affordable Care Act looms in the Senate, the “gig” could be up for freelancers, contractors, and other part-time workers who’ve come to rely on insurance options outside traditional employer-provided health care.

“One of the important reasons why the gig economy has been able to expand in the way that it has, is because workers could make decisions to work independently without losing health care,” Al Fitzpayne, executive director of the Future of Work Initiative at the Aspen Institute and former Chief of Staff at the Department of Health and Human Services, told Bloomberg BNA July 21.

Over the last few years, the gig economy has boomed, but it’s hard to know by exactly how much. The Freelancer’s Union says 55 million Americans, or 35 percent of the workforce, uses freelancing as a way to make money. The McKinsey Global Institute has said the true number of gig workers in the U.S. and the European Union is somewhere between 20 percent and 30 percent of the working population. Even the Labor Department has said that it can’t properly measure the gig economy’s size until it takes a new survey later this year.

Smartphones and the Affordable Care Act are major reasons why many Americans have been able to make the choice to be self-employed, Fitzpayne said. According to a January 2017 study by the Treasury Department, one in five individuals who purchased health care on the ACA marketplace was a small business owner or was self-employed.

“The gig economy companies rely on independent contractors,” Fitzpayne said. “The options for gig econ workers are to be fortunate enough to have a spouse who works at a job that provides health care or to go buy a health care plan on one of the exchanges through the Affordable Care Act.”

The Senate voted July 25 to begin debate on legislation to repeal and replace the ACA.

‘Future of Work’ Is Going Way of Gig Economy

Those involved in the transportation sector of the gig economy might use the ride-sharing platforms as supplemental income, but that isn’t the case for every sector of the gig economy.

The McKinsey Global Institute found in its 2016 study that about 46 percent of gig workers use the system as their primary source of income and 54 percent use it as a source of supplemental income.

“The subsidies that have been available in the ACA marketplace have been very helpful to small business owners and the self-employed,” David Chase, vice president of National Outreach for Small Business Majority, told Bloomberg BNA July 24.

Self-employed workers are the most likely group to be uninsured, Chase said. And that should concern people because “the future of work is going the way of the gig economy.”

Ride-Share Leaders Not Worried

But some caution that the number of gig economy workers relying on the ACA isn’t as high.

“The big thing to keep in mind is that a majority of workers are doing this part time,” Harry Campbell, a Los Angeles Uber and Lyft driver who runs a blog titled “The Rideshare Guy,” told Bloomberg BNA July 24. “I think that health care isn’t such a big deal for most drivers.”

Campbell said that in his experience, most drivers rely on health coverage they receive from another job, their spouse, the Veteran’s Association, or other methods.

Users responding to a Bloomberg BNA post in the online chat room UberPeople split on their use of the ACA for health benefits.

One user said he has “a real job for that,” while another user explained that he gets his coverage through the ACA exchange, where he has a bronze level plan.

A Lyft spokesman echoed Campbell, pointing to the company’s 2017 Economic Impact Report. It found that 82 percent of Lyft drivers are “employed or seeking employment outside of Lyft” and 82 percent “drive fewer than 20 hours per week.”

To contact the reporter on this story: Madison Alder in Washington at malder@bna.com

To contact the editors responsible for this story: Peggy Aulino at maulino@bna.com; Terence Hyland at thyland@bna.com; Chris Opfer at copfer@bna.com

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