Following Your Bliss, with Group Benefits Solutions
Being in the insurance business for over 20 years, I regularly field questions from students who ask about industry opportunities, what a typical day in the life of an insurance analyst looks like, and overall job satisfaction. This got me thinking about the Great Resignation. Even now, one in five workers is planning to quit before the end of the year.1 Why are workers still bolting for the door, even amid an economic downturn and possible recession? The need for better work/life balance, lingering covid concerns, and disengagement are frequent responses. It’s also been suggested that of the millions of workers who have lived through a global pandemic, many are deciding to finally “follow their bliss,” and leave the security of their everyday roles to pursue long-lost ambitions. Whether they leave to write the Great American novel or to start driving for Uber, would-be gig workers are fortunate to live in a time when established carriers and insurtechs are interested in developing group benefits solutions for non-traditional workers, with products that can be tailored to their individual needs and circumstances.
Hustle and Flow
Once mostly limited to musicians, gig work has evolved to become an entire economy comprised of part-time, consulting, and freelance jobs, based on a fixed-term or paid-per-project basis. After gaining traction during the Great Recession, when pioneering startups like Lyft and TaskRabbit hired individuals looking for short, but steady, stints of work,2 today’s gig economy includes roughly 30 million workers in the U.S.3 Profits are expected to reach $455 billion by 2023 as flexible work models have become more acceptable and continue to attract workers of all ages who prefer to set their own schedules.4
The Gig Worker Benefits Blues
The challenge for employers and gig workers is the lack of affordable group-style benefits, such as healthcare, 401k savings plans, supplemental health products, and other perks. This shortage of affordable benefits means many employers cannot offer these much-desired benefits and gig workers going without.
For employers, gig worker benefits must make financial sense, or they risk negative profit margins and an unsustainable business model. Other concerns include benefits administration, such as keeping track of eligibility, claims, and service issues, and in particular, benefits enrollment, as non-traditional workers generally must sign up outside of the regular benefits enrollment cycle. The process is often further complicated because these employees typically lack access to traditional benefits and corporate communication portals. Even though most employers would prefer that gig workers use the same enrollment tools and processes as their full-time counterparts, gig workers frequently have variable hours and are often unavailable for in-person, on-site meetings with benefits representatives and managers. As a result, they generally receive critical enrollment information via email, and this absence of consistent, in-person communication can potentially lead to decreased engagement.
For most gig workers, going without employer-sponsored health insurance and standard 401k savings plans remain considerable concerns. They crave the stability provided through group benefits solutions, and many have even expressed a willingness to cover some of the plan costs themselves.5 Besides the lack of benefits, other related pain points for employees include their dissatisfaction with benefits payroll deductions, as they generally prefer electronic funds transfers (EFTs) and credit card payments. Unfortunately, many group insurers do not like dealing with one-off EFTs and credit card payments, due to their expense and inconvenience; they much prefer to have the premium payments deducted from employers’ payrolls and submitted to them in volume.
New Solutions for a New Market
With gig workers now a fixture of the U.S. workforce, established carriers and start-up insurtechs have expressed interest in developing benefits solutions for this untapped market. They understand that gig workers need quick and effortless transactions and are seeking flexible, short-term coverage. As a result, they offer “portable benefits” packages, with customized contract language and simple, rapid application and enrollment processes. Many of these provider platforms are specific to certain industries and maintain partnerships with complementary businesses that offer gig workers related services at reduced costs. A notable example is Stride Health, a web-based insurance recommendation platform that connects independent workers with cost-effective healthcare plans, based on an analysis of their needs and finances. Stride Health recently launched a partnership with Fiverr, an online freelance marketplace, to offer Fiverr users personalized recommendations for healthcare plans and notify them of government financial assistance programs.
As the Great Resignation continues, the opportunity arises for carriers to develop solutions tailored to the gig worker, offering easy to obtain, affordable benefits solutions for when they turn from full-time office worker to freelance photographer. Established carriers and insurtechs, can seize this opportunity and offer benefits products that provide a safety net to these workers as they pave their path to future bliss and fulfillment.
1 “Global Workforce Hopes and Fears Survey 2022,” PWC, May 2022
2 “7 FAQS About the Current Gig Economy,” BenefitsPro, July 2018
3 “The Global Gig Economy: Capitalizing on a ~$500B Opportunity,” Mastercard and Kaiser Associates, 2019, pg. 2