The nature of the workforce has changed dramatically in recent years, especially given the global surge in freelancing. Data from the World Bank suggests that 46.7% of people are self-employed around the globe. This shift towards a more flexible and independent working style has been catalysed by technological advancements, evolving workplace norms and an increasing desire for work-life balance among professionals. However, amidst this shift towards a more fluid and dynamic work environment, a critical aspect often remains overlooked - the provision of health insurance.
About 42% of freelancers do not have health insurance coverage. This oversight can pose significant risks as freelancers navigate the complexities of securing their own health insurance. This poses a vulnerable segment of the workforce, often one illness or accident away from financial hardship.
Securing health insurance for freelancers is crucial for individuals and organisations engaging independent talent. The following sections will delve into the complexities of health insurance for self-employed individuals and offer guidance for the companies that hire them.
Types of Insurance for Freelancers
The right freelance professional insurance is crucial for self-employed individuals to safeguard their professional journey and personal well-being. There are two significant types of insurance options for freelancers:
1. Business Insurance
This freelance professional insurance encompasses various types of coverage designed to protect against risks associated with their work activities. This can include:
- Professional Indemnity Insurance: This protects against claims made by clients for loss or damage due to negligent advice or services.
- Cyber Liability Insurance: This insurance protects against data breaches and cyber-attacks in the growing reliance on digital platforms.
2. Health Insurance
Health insurance for freelancers is more complex and must be chosen carefully based on individual needs. Key considerations include:
- Coverage: It is essential to know what is covered, including hospital stays, outpatient care, prescription medications and preventative care.
- Premiums: These are the regular payments made to keep the insurance active. Freelancers must balance the premium cost with the extent of coverage.
- Deductibles: This is paid out of pocket before insurance kicks in. A plan with a lower premium might have a higher deductible, which could be costly in the event of a health issue.
- Network of Providers: Many health plans have a network of doctors and hospitals. Freelancers should check if their preferred healthcare providers are in-network.
- Additional Benefits: Some plans offer extra benefits like telehealth, mental health services, wellness programs or travel insurance (for freelancers who travel often).
These insurance options for freelancers are integral to their overall risk management strategy.
How to Offer Health Insurance for Freelancers
Knowing how to help freelancers and other self-employed people with health insurance can be vital to a positive work environment for employers, particularly US employers. While freelancers are typically responsible for their own health insurance, employers can help them navigate the available options in several ways.
Here’s a breakdown of the self-employed insurance options for freelancers in India that employers can help with:
1. Family Floater Plan
Family Floater Plans are ideal for freelancers who wish to provide health insurance for their entire family under one policy. It covers the individual, spouse, children and sometimes, extended family members.
2. Individual Health Insurance Plan
This self-employed health insurance policy only covers freelancers, focusing on individual health risks and needs.
Employers can provide information on various individual health plans and offer stipends or reimbursements for part of the premium costs.
3. Group Health Insurance Plan
Corporations, trade unions or professional associations offer certain insurance plans. They provide coverage for a group of individuals, such as freelancers working for the same employer.
While not directly applicable to individual freelancers, employers can still facilitate connections with professional associations or groups that offer such plans.
4. Government Health Insurance Schemes
The Indian government offers several health insurance schemes to provide affordable healthcare to different population segments. These include schemes like the Ayushman Bharat Yojana and the Rashtriya Swasthya Bima Yojana.
Employers can help by providing information about these government schemes and assist freelancers in understanding eligibility and enrolment processes.
Employers can establish a foundation of trust and loyalty by offering support in these areas, guaranteeing adequate health coverage for their freelance workforce in India.
5. Consulting Services
Employers recruiting talent from foreign countries can gain support from insurance consultants specialising in health insurance for self-employed individuals. These experts can assist your pool of freelancers in finding the right plan based on their individual health needs, jurisdictions and financial situation.
Having a local employer of record proves most beneficial in navigating employee benefits for a diverse talent group.
Why Health Insurance For Freelancers Matter
As the freelancing model gains traction worldwide, it's imperative for companies, particularly those in the technology sector, to understand the impact of health insurance on their international freelancers:
1. Health Risks and Financial Vulnerability
Freelancers, devoid of the traditional safety nets provided by employer-based health insurance, face significant health risks and financial vulnerability. With many professionals (freelancers and non-freelancers) living paycheck to paycheck, it becomes challenging to maintain a healthy savings account.
A report states, Indian families spent an average of 7.9% of their entire annual household consumption expenditure on healthcare.
2. Impact on Productivity and Mental Well-being
The uncertainty associated with health coverage can lead to increased stress and anxiety, impacting mental well-being. According to a study by Lancet Health Global, mental health disorders are expected to cost the global economy $6 trillion by 2030, with a significant portion attributable to workplace stress.
For freelancers, the lack of health insurance worsens this stress, potentially reducing productivity and affecting the quality of work.
3. Attracting and Retaining Talent
Health insurance can be critical to attracting and retaining top freelance talent. In competitive fields like technology, where US companies frequently hire freelancers from India and other countries, offering health insurance can set an employer apart and foster employee loyalty.
4. Reducing Absenteeism and Turnover
Adequate health insurance coverage can reduce absenteeism and turnover. Well-researched study finds a significant correlation between health insurance and decreased absenteeism at the workplace. While this study focuses on traditional employment, its implications are relevant for freelancers, as consistent access to healthcare can ensure they remain healthy and engaged in their projects.
5. Legal and Ethical Considerations
In some jurisdictions, providing health insurance to freelancers may soon become a regulatory requirement. Beyond compliance, businesses are increasingly realising their ethical obligations to all employees, including freelancers. Ensuring their health and well-being is becoming a part of corporate social responsibility initiatives.
Providing health insurance for global freelance talent is a matter of ensuring well-being and a strategic business decision. As a result, it impacts productivity, talent management and corporate reputation.
Discover Insurance Options For Freelancers With Rapid EOR
If you plan to tap into the rich talent pool of freelancers in India while addressing the complexities of health insurance and employment compliance - check out Rapid EOR.
It can be challenging for foreign businesses to navigate India's employment laws. With 25 years of experience in the market, we ensure full compliance with Indian employment laws and regulations, mitigating legal risks and administrative burdens for employers.
Understanding the diverse freelance professional insurance needs in India, we have various comprehensive health insurance plans. We have credible partners like Plum that offer health benefits and insurance, helping you attract and retain quality talent. You can choose from a comprehensive three-level plan for your freelancers. These insurance plans cover OPD, dental and vision cover, maternity, accident and disability.
Click here to get a demo today.