Non-Traditional Workers A Growing Group, Study Finds

Employee benefit providers could profit from paying more attention to non-traditional workers when writing group coverage plans, one labor advocacy group contends.

According to a report released in June, “Mobile Workers, Immobile Health Benefits,” conducted by Working Today, a New York-based non-profit organization that advocates for the independent workforce, 30 percent of new media and high-tech independent workers have no health coverage and 31 percent rely on COBRA (Consolidated Omnibus Reconciliation Act).

COBRA is a federal mandate that requires employers to extend benefits, including health coverage, to employees for a time after they have left the company.

Sara Horowitz, executive director of Working Today, said the flexibility of these professionals is costing them their fair share of employee benefits.

“More than one-third of American workers are currently in non-traditional job arrangements,” said Ms. Horowitz who is the founder of the organization. “This group is largely without access to traditional workplace benefits.”

The New York New Media Association reported in July that the Citys new media industry had grown by 43 percent between 1997 and 1999–nearly 140,000–with 24 percent of those workers in either freelance or part-time positions.

The Independent and traditional workforce includes agency temps, direct-hire temps, on-call workers and day laborers, independent contractors, self-employed workers and standard part-time workers, according to the study.

They can include computer programmers, dentists, farmers, graphic designers, plumbers, nannies and taxicab drivers.

Fifty-nine percent of these independent workers have had an interruption in their health insurance coverage in the last three years and 80 percent have switched between independent work and traditional work once in the last three years, the study found.

But while the number of independent workers is on the rise, other figures in the study show that benefit providers are not responding to the shift in the workforce.

Employee benefit providers tend to avoid cost-conscious consumers like non-traditional workers who bounce from project to project and only buy coverage when they need it, Ms. Horowitz acknowledged.

She called this “adversarial selection” and said it keeps non-traditional workers out of the loop when it comes to securing employee benefit packages that are easily obtained by their full time counterparts.

People typically make economic choices, she said. “The price of [health] insurance is so high, that if they pay for it on their own, they are typically going to do it when they need the insurance the most, which makes them the worse risk for adverse selection,” she said.

Joe Luchok, a media representative at the Washington, D.C.-based Health Insurance Association of America, a trade group that focuses on public policy matters affecting health insurers, agreed. He also noted that any group capable of buying coverage should be considered.

In September, Ms. Horowitzs organization launched a portable benefits network in response to a strong need among high tech workers, who often change jobs, leaving them with little or no time to secure and maintain adequate health coverage.

Under the plan, eligible independent workers (those who are members of selected trade groups affiliated with Ms. Horowitzs organization), can obtain a benefits package which includes a comprehensive HMO plan, life insurance, financial and investment planning and free checking, Ms. Horowitz said.

For independent workers, the plan costs $242 per month under a group policy, Ms. Horowitz said. Currently only New York City non-traditional workers can participate in the portable benefits network, Ms. Horowitz said.

Mr. Luchok was not initially familiar with Working Todays network, but after being briefed on the plan, he expressed support for its objectives.

Eric Geist, a representative at the Newspaper Guild, said the portable benefit plan does not necessarily offer independent workers a group package comparable to what full time workers can obtain, but he believes the plan is a positive step for his organizations members.

“It gives people who are independent workers a chance to have stable health insurance,” Mr. Geist said.

Some of the Guilds 4,000 independent worker members have managed to obtain adequate employee benefits, including health coverage, through a variety of plans through the organization, explained Mr. Geist.

Translators and interpreters, who make up about 1 percent of the organization, for example, have been able to negotiate a 5 percent decrease in premiums for group plans underwritten by Mutual of Omaha in Nebraska, Mr. Geist said.

The Guild also represents independent workers or “perma-temps” at several software companies in the West, including Microsoft Corp., based in Redmond, Wash., Mr. Geist added.

The Health Insurance Plan of New York, HIP, has partnered with Working Today, but Ron Maionara, a HIP representative declined to comment following the World Trade Center disaster.

Financial planning strategies will be offered by Salomon Smith Barney and other firms and Citibank says it will provide network members with free checking.

Reproduced from National Underwriter Property & Casualty/Risk & Benefits Management Edition, October 8, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.

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