More Health Care Plays

One-third of the U.S. workforce is employed independently as freelancers, consultants, temps, part-timers, and self-employed workers. Because of their flexible and mobile status, most of these workers must find and pay for their own "worker benefits," such as health and life insurance. Without the administrative and financial supports from an employer or government program, many of these workers end up among the millions of uninsured Americans. Adding to their risk, "nontraditional workers" lack such basic protections as unemployment insurance, and face both legal and logistical obstacles to organizing on their own behalf.

Independent workers need new organizations and modernized public policies to help them select, afford, and maintain benefits. They deserve better than a fend-for-yourself approach that fails to recognize and capitalize on independent workers' common interests and growing needs.

"Instead of fighting mobility, we want to help more people be mobile and show that there's not a downside to it." -- Sara Horowitz, Executive Director, Working Today

State and local leaders seeking to strengthen families and foster entrepreneurship should consider the approach pioneered by New York State Assembly Speaker Sheldon Silver and the innovative nonprofit organization, Freelancer's Union. Recognizing that freelance talent is often the engine of an innovative economy, Silver sponsored legislation to provide seed money for the project, which was established in 1995 both to help independent workers find ways to purchase benefits and to advocate modernization of public policies related to workers.

Freelancer's Union was quickly able to leverage its seed money to obtain matching funds from organizations like the Ford Foundation interested in solving the country's growing health care crisis. By establishing the Portable Benefits Network (PBN), Freelancer's Union began delivering a comprehensive benefits package that included health insurance, term life, and disability insurance, as well as financial services, such as free checking and retirement planning. The cornerstone of its program is the health insurance benefit: premiums are on average 65 percent cheaper than other health insurance available to independent workers. The benefits remain tied to the individual as he or she moves from job to job or from project to project

By creating participation rules that encourage long-term membership, Freelancer's Union is also building an infrastructure to support future advocacy campaigns. To qualify for membership, applicants must meet hours or earnings requirements in one of Freelancer's Union's eligible sectors: nonprofit, traditional and alternative health, domestic childcare, financial services, media and advertising, arts and entertainment, and technology.

To draw from the success of Freelancer's Union and bolster the position of independent workers, policymakers should consider taking the following steps:

• Provide seed money or grant charters to groups like Working Today that serve independent workers;
• Provide tax credits for individuals to purchase health insurance at group rates;
• Extend unemployment insurance coverage to all part-time workers; and
• Work with federal officials to enact a system of universal pensions to simplify and expand pensions for all workers, including independent workers.

Alternatively, states could follow the model presented in Massachusetts' 2006 insurance reform legislation. The central innovation in the Massachusetts bill creates the health "connector," which links otherwise uninsured citizens to a menu of affordable health plans. This includes pooling small businesses together with self-employed and part-time workers from around the state and creating the critical mass necessary to sustain reasonable insurance options for individual choice of coverage. For part-time workers, employers can contribute to a plan proportionate to the number of hours the employee works. The legislation provides incentives for the employers to contribute and allows the employees to contribute their share with pre-tax earnings.

Policymakers must recognize that our nation's current social policies and insurance delivery systems must be modernized to move them beyond their industrial-era beginnings. The innovations in New York and Massachusetts that make benefits portable by tying benefits to individuals rather than jobs more appropriately reflect how people often work today.

Resources for Action

Freelancer's Union's website offers complete information about its services, allows individuals to register and enroll online, and features practical resources for independent workers
http://www.freelancersunion.org/

Additional Reading

Elaine Ditsler, Peter Fisher, and Colin Gordon, "On the Fringe: The Substandard Benefits of Workers in Part-Time, Temporary, and Contract Jobs," The Commonwealth Fund, December 2005,
www.cmwf.org/publications/publications_show.htm?doc_id=324095

"Idea of the Week: Portable Benefits," Democratic Leadership Council, September 7, 2001
www.dlc.org/ndol_ci.cfm?
contentid=3768&kaid=131&subid=207

David B. Kendall, "Massachusetts Raises the Bar for Health Care Reform," Front and Center, Progressive Policy Institute, April 17, 2006,
http://www.ppionline.org/ppi_ci.cfm?knlgAreaID=111
&subsecid=137&contentid=253823

David Kendall, et al., "A Health Care Tax Credit to Cover the Uninsured," Blueprint, April 25, 2001
www.dlc.org/ndol_ci.cfm?
contentid=3307&kaid=125&subid=163

"A Progressive Path Toward Universal Coverage," Progressive Policy Institute, December 2000
www.ppionline.org/ppi_ci.cfm?
knlgAreaID=111&subsecID=137&contentID=2813

"Modernizing Unemployment Insurance for the New Economy and the New Social Policy," Progressive Policy Institute, February 19, 2002
www.ppionline.org/ppi_ci.cfm?
contentid=250213&knlgAreaID=107&subsecid=175

Paul Weinstein, "Universal Pensions: A Common-Sense Approach to Retirement Security in the New Economy," Progressive Policy Institute, February 22, 2002
www.ppionline.org/ppi_ci.cfm?
contentid=250222&knlgAreaID=125&subsecid=164

"Blueprint Profile: Sara Horowitz," Blueprint, September 10, 2001
www.dlc.org/ndol_ci.cfm?
contentid=3757&kaid=107&subid=297

Contacts

Sara Horowitz
Executive Director
Freelancer's Union
45 Main Street, Suite 710
Brooklyn, NY 11201
(718) 532-1515 Ext. 660
(718) 222-4440 (fax)
shorowitz@freelancersunion.org

David B. Kendall
Senior Fellow for Health Policy
Progressive Policy Institute
4021 Heritage Way
Missoula, MT 59802
(406) 543-2265
(772) 679-0652 (fax)
dkendall@ppionline.org