Health Insurance for Gig Workers: A Guide for Employers

Providing health insurance for gig workers is no longer just a trend; it is now a legal requirement under India’s Social Security Code. Specifically, as the digital economy grows, the government has mandated that aggregators and employers provide a safety net for their flexible workforce. Therefore, understanding these rules is essential for any business utilising independent contractors or platform-based labour.

New Mandates for Health Insurance for Gig Workers

The Social Security Code, 2020, formally defines the rights of platform workers. Consequently, employers must align their operations with these core pillars of the law:

• Financial Contributions: Aggregators must contribute 1–2% of their annual turnover to a dedicated Social Security Fund. Furthermore, this amount cannot exceed 5% of the total wages paid to the workforce.
• Eligibility Rules: A worker qualifies for health insurance for gig workers after completing 90 days of service with one platform. Alternatively, they can qualify by working 120 days across multiple platforms.
• Digital Tracking: The system uses the e-Shram portal to track workers via a Universal Account Number (UAN). Because of this, benefits stay with the worker even if they change platforms.

Why Employers Benefit from Providing Health Coverage

While compliance is the main driver, offering health insurance for gig workers offers strategic advantages for your brand. For instance, it helps your company stand out in a competitive freelance market.

1. Attract Better Talent: High-quality professionals choose platforms that offer security. Therefore, better benefits lead to a more skilled workforce.
2. Boost Loyalty: Gig work often suffers from high turnover rates. However, workers stay longer when they feel protected by medical coverage.
3. Ensure Reliability: When your partners are healthy, they are more productive. As a result, you face fewer service disruptions.
4. Tax Incentives: You can often deduct these contributions as business expenses. Thus, you save money while fulfilling your legal duties.

How to Implement Health Insurance for Gig Workers

Employers must act quickly to avoid penalties. To begin with, follow these essential steps to ensure your company is compliant with the new social security rules:

• Step 1: Audit Your Workforce. Identify which partners meet the legal “gig worker” definition under the code.
• Step 2: Register Workers. Help your partners sign up on the e-Shram portal. Indeed, the employer is now responsible for ensuring this data is shared correctly.
• Step 3: Budget for Fees. Set aside the required percentage of your turnover immediately. Otherwise, you may face interest charges for late payments.
• Step 4: Leverage Government Schemes. Many benefits are linked directly to Ayushman Bharat. In short, you can provide high-value coverage by integrating with existing state programs.

Frequently Asked Questions (FAQs)

What is the definition of a gig worker?

A gig worker is someone who earns money through activities outside the traditional boss-employee relationship. For example, this includes independent contractors and on-demand app workers.

Is health insurance for gig workers mandatory for everyone?

Insurance is mandatory for those who meet the 90 or 120-day work threshold. Moreover, the aggregator must pay into the social security fund regardless of the individual worker’s choice.

Can workers over age 60 get these benefits?

No. Currently, the law states that eligibility for these specific social security benefits ends once a worker reaches age 60.

What happens if I fail to contribute?

If you fail to pay, the government will charge you interest. In addition, you could face legal action for non-compliance with the Social Security Code.

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