According to the MBO Partners State of Independence study, about one third of independent workers do not have health insurance.
This, obviously, is not good. But it may also change in 2014 as the Obamacare mandated insurance exchanges begin operation.
Obamacare may also increase the number of people who become freelancers because it will likely end or reduce health insurance related job lock.
Job lock is the term economists use to describe the reluctance of workers to leave their jobs because doing so would mean losing fringe benefits, especially health insurance.
While there’s a broad agreement that job lock is real, there’s little consensus in the academic community over how big an impact job lock has on employment choices. The U.S. General Accounting Agency reviewed the research on job lock and reported "empirical research generally indicates that certain types of workers are more likely to remain in jobs they would otherwise leave in order to keep their employer sponsored health care coverage, although research does not allow for a definitive answer on the prevalence or implications of this phenomenon for the overall labor market."
In other words, job lock exists – we’re just not sure how big an impact it has on the economy or self-employment.
But the one segment Obamacare should help is freelancers.
Based on our interviews and focus groups, the main reasons most freelancers do not have health insurance – and there are no surprises here – are cost and availability. In many states, health insurance for freelancers is simply too expensive and/or too hard to get.
While it’s still too early to know, it’s likely state exchanges mandated under Obamacare will make it both easier and cheaper for freelancers to get health insurance.
The other feature of Obamacare that helps is the ability of parents to keep their kids on their insurance until they are 27. This means young freelancers can piggyback on their parental policies.
The full impacts of Obamacare (both good and bad) are still unknown and it remains to be seen if the overall impacts of Obamacare are positive or negative.
But we’re optimistic that at least for freelancers, Obamacare will be a plus.
Our advice to freelancers is to pay attention to your state’s exchange plans and policies. Most are still at least a year away, but it’s not too early to start researching your future health insurance options.
Steve King is a partner at Emergent Research and a Senior Fellow at the Society for New Communications Research. This article was originally published in his blog, Small Business Labs, and has been used with his permission.
News and notes for independent professionals and their clients. This is the July 24, 2017 edition.
Three risks of discounting your services along with solutions for times that it is appropriate.