Empowering Entrepreneurship Begins With Affordable Health Coverage The gig economy that generates the talent startups can afford depends upon health insurance freelancers can afford.
By Brent Messenger Edited by Dan Bova
Opinions expressed by Entrepreneur contributors are their own.
The Open Enrollment Period is underway in the United States, but judging by the news coming out of Washington, you'd hardly know it. While recent economy-related headlines have been around schemes to spur economic growth through mechanisms like corporate tax cuts, it's worth recognizing exactly how and where Americans have been earning their living and what will truly help them succeed.
Harvard and Princeton economists Lawrence Katz and Alan Krueger did a study about a year ago, finding that 94 percent of net job growth over the last 10 years had come from alternative forms of work. "Alternative work" essentially meaning non-traditional, nine to five employment. Of that 94 percent, 60 percent could be considered freelance or contract work.
There are more than a few books dedicated to why alternative work has grown so quickly, but the bottom line is that it's happening and doesn't appear to be slowing down. Intuit has gone as far as predicting that independent work will make up over 40 percent of the U.S. workforce by 2020.
Not to be lost in the rise of the independent worker is the makeup of those small businesses that rely on them. Based on research Fiverr did earlier this year, nearly two out of three entrepreneurs and small businesses said they rely on freelance help to keep their businesses humming. Over 24 million of America's small businesses are non-employer businesses themselves, and over 97 percent have less than 20 employees. Essentially, many of the same entrepreneurs that rely on freelancers are the ones who themselves function independently.
When it comes to independent work and its increasing impact on the U.S. economy, it's clear that the inflection point is coming. Warren Buffett once said, "Predicting rain doesn't count. Building arks does." How can companies, communities and entrepreneurial ecosystem start to build arks? It starts with informing and increasing access.
Keep the independent workforce healthy.
Simply put: the availability of and access to healthcare coverage has played a big role in creating opportunity for independent workers and entrepreneurs, and the numbers back it up. In 2014, the first year the Affordable Care Act went into effect, 1.4 million people purchasing coverage through the newly established marketplace were considered a small-business, self-employed, or both. That was one in five of all the people buying insurance on the exchange.
Part of broadening access to affordable care is simply making sure those who rely upon it are aware of it. Last year, the Department of Health and Human Services (DHS) spent $100 million to create awareness around Open Enrollment, the period of the year when Americans can sign up for or alter their health coverage. That outpouring resulted in 11.5 million people using the federal marketplace to buy health insurance. Of that number, 8.9 million people renewed their coverage or bought new plans to replace existing plans, and 2.6 million were brand new to the marketplace.
This year, DHS has slashed its marketing budget 90 percent, leaving little opportunity to spread the word about the upcoming enrollment period. Aside from limiting awareness and education efforts, the Administration has created a fair amount of fear, uncertainty and doubt around healthcare; a move that will undoubtedly leave fewer independent workers and non-employer businesses enrolled and more without coverage.
Fiverr has led the creation of a coalition of like-minded technology companies and communities, focused on broadening access to care. Dubbed "Tech United for Independent Access to Healthcare," Fiverr, DoorDash, Postmates, Etsyand Care.com are launching a coordinated effort to reach as many people as possible with the most recent, pertinent and up-to-date information regarding the 2017 Open Enrollment period for state healthcare exchanges, created under the Affordable Care Act.
Through our partner Stride Health, we're helping our communities gain streamlined access to personalized guidance, picking the right plan, and enrolling in health coverage with tax credits.
Related: 3 Things to Know About Buying Health Insurance
What you should know.
But, even with efforts like ours, entrepreneurs, freelancers and individuals within the U.S. economy risk being uninformed about their options.With that in mind, we wanted to provide some simple guidelines for finding care this Open Enrollment Period.
Recognize the shorter timetable this year: The Open Enrollment Period is from November 1st until December 15, 2017 (in most states). This is roughly a month shorter than last year, and with entrepreneurs and freelancers often laser-focused on their business, the deadline will sneak up on you.
Buying insurance is often less expensive than the tax penalty itself: If you don't buy health insurance either as an active decision or because the deadline has passed, the government will fine you -- last year's fine was either $695 per person ($347.50 per child under 18. or 2.5 percent of your income, whichever is greater (so enroll in health insurance by December 15 to avoid this fine!).
Recognize your options and get the right plan for you: Most of us have expertise, but it's rarely in healthcare benefits. It's in our business or our field. Picking the right plan can be confusing for everyone. There are countless disclaimers and acronyms (HMOs, PPOs, EPOs, APTCs, MAGI and many more) standing in your way, so find a benefits professional or a platform like Stride to provide the guidance you and your family need to succeed.
The lowest premium is not always the cheapest plan: It's easy to see a low number and assume that's the right way to go. For many people -- like those who have frequent doctor visits, complicated medical conditions, or expensive prescription drugs -- out of pocket costs can add up quickly, so it's often more affordable to pay a higher premium for a plan that provides more coverage.
Don't assume coverage is unaffordable: Too many of people fail to account for all of their business deductions when they check to see if they qualify for the tax credits that lower premium costs. Basically, the lower your taxable income, the higher subsidy you are potentially eligible for. Taking the time to correctly estimate your income might mean thousands in annual savings or the chance to buy-up to a better plan for your family.
Related: Unhappy Employees Are Costing You: 4 Lessons From Denmark
The way people work has changed. It's incumbent on our system to recognize how people are working in the 21st century and to adapt, and that means finding a way to take independents and entrepreneurs and create sustainable access to care. Fiverr and a coalition of our peers have stepped up to the task during this Open Enrollment Period, and our hope is that more will join us.
