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Looking Ahead at the Benefits Landscape for Gig Workers

As the workforce continues to evolve from the standard nine-to-five, full-time employee structure, so do organizations' reward structures.

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Today, an estimated 36% of employees participate in the gig economy and it is projected that most of the United States workforce will freelance by 2027. However, a key obstacle facing this segment of the workforce — the portion that doesn’t have a full-time job as well — is a lack of benefits, as the transaction between gig workers and their organization is usually strictly monetary.

That, however, could be changing.

Businessolver, a benefits administration technology and services company, recently added benefits options to its platform that caters to those employees that are traditionally ineligible for benefits. It will allow organizations using Businessolver to direct their part-time, freelance or contract workers to the platform to select benefits rather than asking them to purchase their own through the Patient Protection and Affordable Care Act’s individual marketplace.

“One of the things that we’ve done is we’ve taken benefits that used to only be available in the retail space and we’ve been able to build those out on our platform,” said Sherri Bockhorst, Businessolver’s strategy practice leader. “Because of that, we’ve also been able to attract benefits that normally wouldn’t be available to an aggregated group of individuals. These aren’t group plans, they’re individual plans.”

Bockhorst said the benefits offered to gig workers on their platform are coming from the same individual marketplace, but they offer a couple distinct advantages. Because it’s being negotiated on a group platform, rates will often be cheaper. And, because the services are all consolidated on one platform, there is an ease-of-use and convenience variable for gig workers who otherwise have to keep track of different premium payments from different providers.

“What we’ve been able to do is take an employer mentality, but apply it to the retail space,” Bockhorst said. “We’re taking on the curation of the benefits, the communication, the education, the enrollment, the premium consolidation, so it looks and feels like an employer benefit plan and it’s on the same platform as an employer’s benefit-eligible population, so it has that same look and feel as the employer-sponsored plans.”  

Businessolver’s expansion of its MyChoice Market platform is likely the start of a shift in the benefits space going forward. Both government agencies and businesses will need to rethink employee benefits programs so that they adequately compensate the various types of workers participating in the labor force.

The government portion of this equation might have similarly been addressed in late June when the Trump administration finalized rules that will allow companies to reimburse employees who purchase health insurance in the individual market through health reimbursement arrangements (HRAs).

The rules, which go into effect Jan. 1, 2020, loosened Obama-era restrictions on short-term health plans that don’t meet the ACA’s standards. From a benefits standpoint, a key variable that could be attractive to employers is the portability and convenience factor the HRA rule presents. Employees who purchase health care on the individual market could bring it with them when they switch jobs.

The HRA rule plays into the platform strategy of benefits providers like Businessolver, which could make for an interesting future in the industry.

“I think employers could eventually leverage the individual coverage HRA to support employees, but where I think it could come into play initially is for these alternative workforces like part-time and gig workers that are becoming a bigger part of the workforce,” Bockhorst said. “I do think there could be a time in the future where it applies to the benefit eligible population too and it just becomes a new delivery mechanism for employer-sponsored plans.”

 

BENEFITS ROUNDUP

Understanding Benefits

Chris Renz writes that employers are doing their part to attract and retain top talent by beefing up their benefits packages. However, a majority of employees do not understand their benefits or even read their benefit materials. In this piece for Forbes, Renz provides a three-pronged approach for employers to follow to enhance their employees understanding of benefits.

Modifying Wellness Programs

Pearce Fleming of Benefits Pro writes that engaging an increasingly diverse workforce requires a tech-savvy approach. Fleming explains how this digital approach is especially true when it comes to wellness programs.

Consolidation Continuation

Consolidation in the benefits and HR technology space is not slowing down, writes Caroline Hroncich of Employee Benefit News. Hroncich writes how human capital and benefits administration technology company Alight acquired Hodges-Mace, another employee benefits technology and communication firm, earlier this week. Hronich’s piece touches on how mergers and acquisitions are becoming increasingly common in the benefits technology space.

LGBT Inclusive Benefits

Annamarie Houlis identifies seven benefits that companies should have to be truly LGBT inclusive in this piece for Ladders. One of those benefits involves paid parental leave and family-building benefits, namely, caregiving leave, which better acknowledges the needs of caregivers outside the traditional framework of biological families. 

Benefits in the Gig Economy

With such a strong presence in the labor market, the gig economy is altering the shape of employment, which is causing government agencies and businesses to rethink employee benefits programs, writes David Rook of JP Griffin Group. Rook examines both long-term and short-term solutions to the benefits problem for gig workers in what is a comprehensive look at the current landscape.

About the Author

Brett Christie is a staff writer at WorldatWork.

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