As a freelancer, I can tell you from experience that it’s challenging, but not impossible. With a bit of effort, you can secure your own health insurance and retirement plan. And with a dash of creativity, you can even manage vacations and sick days without busting your budget.
One of the biggest hurdles for gig economy workers is health insurance. The U.S. healthcare system is largely built around employer-sponsored benefits, which can make it tough to get coverage if your job doesn’t provide it. The Affordable Care Act, or Obamacare, expanded employer-provided health insurance, but this generally only applies to permanent, full-time employees. Temporary, contract, and part-time employees are often left to fend for themselves.
Luckily, there are several health insurance options for the self-employed and other workers in similar situations. These options often cost more than employer-sponsored plans, but they’re a better choice than going without insurance and risking a health crisis that could wipe out your savings.
If you’re married and your spouse works full-time, you might be able to get covered as a dependent on their health plan. This could provide better coverage at a lower price than you could get on your own. Employers often cover part of the insurance premiums for their employees and sometimes for family members as well. Even if the company doesn’t do this, a group plan through a large employer is likely to have lower rates than an individual plan.
If you’re not married but live with your partner, you might be able to get insurance benefits under their plan as a qualified domestic partner. However, this option is only available in some states due to federal law not recognizing domestic partnerships.
If you’re 26 or younger, you can get coverage under a parent’s health plan. You don’t have to live with this parent — or even in the same state — to use their insurance. However, if you live out of state, you might pay more to see doctors who aren’t in your parent’s local network.
If you can’t get coverage on a family member’s plan, your next best bet is to shop for an individual plan on the official health insurance marketplace. In most states, you can visit HealthCare.gov to look for insurance. However, some states have their own marketplaces.
Marketplace health plans can be expensive, but if your income is below a certain level, you can get subsidies that cover a large share of this cost. All plans available in the marketplace cover certain basic preventive care, such as vaccines and basic screening tests. However, the plans vary widely in what else they cover and how much they cost.
If you’ve just left a full-time job to join the gig economy, you can get short-term health coverage through COBRA. This allows you to keep your health insurance from your old job for up to 18 months. You must sign up for coverage within 60 days of leaving your job.
Many organizations that charge dues, such as labor unions, offer health insurance as a benefit for their members. Just like businesses, these groups can band together to negotiate better prices for their members than they could get buying individual plans.
Depending on your situation, you may qualify for other sources of health care coverage. For example, if you’re at least 65 years old or disabled, you can apply for Medicare. If you’re a student, see if your college or university offers a student health plan. If you’re a current or former member of the military, you can get TRICARE coverage for yourself and your family.
Along with health insurance, many people rely on their workplaces for retirement benefits. These days, traditional pension plans funded by employers are rare. However, many workers do most of their retirement saving through workplace plans such as a 401(k) or 403(b).
If you’re self-employed, you can’t contribute to a workplace plan. However, there are other ways to save for retirement on your own. You can’t take advantage of employer matching, but you can still get the same tax advantages you’d get from a workplace plan.
If you have a full-time job, your employer probably allows you a certain number of sick days per year. If you catch a cold or sprain your ankle, you can take time off to recover and still get paid. But when you work for yourself, that’s not an option. You have to make the stressful choice between trying to work while you’re sick, which isn’t always possible, or losing income.
If being self-employed makes it hard to take a day off when you have a cold, it makes it even harder to take a whole week off for a vacation. However, working all year without a break isn’t the best solution for your health or happiness.
Right now, the majority of American workers are still able to get benefits from their jobs. However, many economists expect this to change in the future as the gig economy continues to grow. Already, many companies are outsourcing large portions of their business to subcontractors. These individuals or small companies don’t offer the same benefits as big ones. If this trend continues long enough, figuring out how to fund your own benefits won’t just be an important skill to succeed as a freelancer. It will be vital for all workers.
