The Affordable Care Act and the Changing Economy


In the past decade the workforce has begun to change. There has been a shift away from traditional “9-5” jobs and a move towards freelancing. While individuals of earlier generations may have stayed locked into one job for a large part of their career, the new generation is moving more fluidly through the job market. The need for job flexibility has led to the rising “Gig” economy.

What is the Gig Economy?

The gig economy is made up of workers who perform flexible, freelance work. This portion of workers is becoming larger each year. According to the Freelancer’s Union, 1 in 3 workers freelanced in some capacity last year. That percentage of the population adds up to about 56 million individuals. 

The Freelancer’s Union predicts that this trend will continue as the millennial generation packs the workforce. It is estimated that 47% of millennials in the workforce participate in freelancing. It is not surprising that this is the direction that the economy is moving towards, when you take technology into consideration. It’s breaking down barriers. 

New technology makes it easy for individuals to work remotely, this increases job flexibility for employees. E-commerce allows businesses to thrive with or without a brick and mortar storefront. 

The Gig Economy And Health Insurance

So, the gig economy sounds great, right? People are able to have more job flexibility and new opportunities to fulfill their career goals. Well…there are some challenges that freelance workers face. One of the greatest challenges is health insurance. For decades individuals have depended on health insurance that is tied to their full-time employment. 

When individuals are working part-time or temporarily instead, they are no longer able to rely on this stable health insurance. The cost of paying for your healthcare completely out of pocket is overwhelming. Some individuals can attain health insurance through their spouse’s employer, but what if you are single? 

…Enter The Affordable Care Act

The Affordable Care Act has been beneficial to the gig economy. The Health Insurance Marketplace is ideal for individuals who are not locked in to the stability of an employer provided health insurance plan. The ability to enroll in affordable health insurance that is not tied to full-time employment has allowed workers more flexibility in their career choices. 

The ABC Test + The Gig Economy

Several states have created their own requirements for ACA reporting. A few of the major players include New York, Pennsylvania, and California. All of these states use the ABC Test to determine whether a worker should be considered an employee or an independent contractor. 

The ABC test is refining the definition of an independent contractor versus an employee. It will be interesting to follow the ACA changes at the state level to see how new laws affect the freelance economy. 

The ACA is a complex piece of legislation that continues to grow and change. ACAwise provides a full-service solution to ACA reporting. Don’t go it alone when you can have a team of experts on your side! Learn more today!


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