Health Insurance for Freelancers: Why It Matters & How to Customise It for Your Team

  • postauthorOnsurity Editorial
  • postdateJanuary 29, 2025
  • postreadtime8 min read
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In today’s rapidly evolving economy, gig workers fill the essential gaps to ensure business continuity and innovation. Whether in an early-stage startup or an established enterprise, freelancers bring their niche skills, flexibility, and cost-effectiveness to the table. In fact, India’s gig economy is growing rapidly and is said to create 90 million jobs that will contribute 1.25% to the GDP.

Despite their rising demand, good freelancers are hard to come by. Hiring and retaining freelancers remains a challenge for most businesses. But with one small initiative companies can not only hire the best talent but also ensure a fruitful collaboration with freelancers and contract workers: health insurance.

Offering health insurance to freelancers is a strategic business move. In this blog, we’ll find how it’s more than a gesture of goodwill and how businesses can thrive in an increasingly competitive market by offering health insurance to freelancers.

The Concept Of Gig Economy And Freelancing Explained

A gig economy, also known as, a sharing economy, relies on temporary and part-time roles filled by freelancers and contract workers rather than full-time employees. A gig economy enables businesses to hire for specific and short-term functions without expanding their resource and bandwidth for a full-time employee.

Part-time workers and freelancers enjoy the flexibility and freedom to work remotely and as per their schedules. However, gig workers experience more financial instability as their roles are short-lived and often subject to renewability.

However, the gig economy is constantly evolving and rules are still being written. The competition to source the best freelancing talent is stiff, which is why businesses need to rethink their approach to hiring and engaging with freelancers.

By providing health insurance to gig workers, businesses can make a pivotal difference. Health insurance can effectively bridge the financial security gap for freelancers, making it an exciting benefit for them and a critical factor in picking projects.

Why Health Insurance Matters To Freelancers?

Unlike full-time employees, freelancers have to navigate the health protection gap with an individual health insurance policy. These plans are usually expensive and give limited coverage. Accessing affordable healthcare is cited as one of the biggest challenges for freelancers.

Although it may appear as a personal challenge, it is also a business risk. Freelancers that don’t have health insurance or have inadequate coverage can impact your business in the following ways:

  • Reduced Productivity
  • Higher Attrition
  • Inconsistent Availability

By helping freelancers get judicious coverage, businesses can foster a more efficient and productive relationship with them and ensure project continuity.

Also read: Group Health Insurance for Small Business

Benefits Of Providing Health Insurance To Freelancers

1. Attract Top Talent

India’s freelance market is highly competitive. Despite a large pool of talent, companies find it difficult to hire skilled professionals and part-time workers. Companies offering health insurance to freelancers can easily attract a diverse talent pool and attract professionals with niche skills, in fields such as technology, marketing, and design.

2. Boost Retention and Loyalty

Health insurance can play a crucial role in building loyalty as many individuals rely on company-sponsored health plans to safeguard themselves against medical emergencies. When freelancers feel supported, they are more likely to prioritise collaboration with businesses offering health insurance over any other opportunity.

For businesses seeking fast growth, this benefit can make a significant difference. Continued collaboration with highly skilled professionals can reduce onboarding efforts, ensure business continuity, and foster value creation.

3. Enhance Productivity

Most corporate health insurance policies offer preventive care and well-being making it easier for freelancers to stay healthy and more productive at work. This can mean fewer missed deadlines, higher quality of work, and a more dependable team.

Furthermore, when gig workers are given benefits they tend to go above and beyond for their clients. This boost in morale can improve creativity, productivity, and overall project success.

4. Build Reputation And Brand Advocacy

Attractive employee benefits given by a company can define its culture and reputation. Considering today’s socially conscious landscape, how a company treats its stakeholders (specially employees and freelancers), is detrimental to their reputation.

A positive company branding can bring more credibility and trust to your business making it a valuable proposition.

4. Build Reputation And Brand Advocacy

While buying health insurance for freelancers may seem like an upfront cost, it can save your business future costs. Hiring skilled talent and ensuring continuous collaboration can lower recruitment and onboarding costs. Moreover, group health insurance policies in India offer tax incentives further offsetting the expense.

Which Businesses Should Consider Providing Health Insurance To Freelancers Or Independent Contractors?

Providing health insurance to freelancers is not mandatory for businesses. However, various kinds of companies can benefit from this initiative. Here are some of the businesses that actively work with freelancers and independent contractors and should therefore consider getting group health insurance for them:

1. Creative Agencies and Marketing Firms

Why: Most agencies and marketing firms rely on a network of freelancing professionals to perform a timely delivery of projects. By offering health insurance to freelancers businesses can hire the most creative talent in a competitive landscape.

Benefit: Incentivises freelancers to prioritise your projects over others and builds loyalty.

2. Tech Companies

Why: Tech firms and startups often hire developers, UX designers, and project managers on a contractual basis for specific business and transformational requirements.

Benefit: Attract highly-skilled professionals who prefer working full-time roles for better benefits.

3. Gig Platforms

Why: Ride-hailing platforms, beauty and wellness aggregators, or freelancing platforms depend entirely on independent contractors for their operations. These businesses often get questioned about their treatment of these contractual workers.

Benefit: By offering health insurance benefits to independent contractors these platforms can set a positive precedence of their work culture and attain better brand advocacy.

4. Consulting Firms

Why: Consulting firms used to be the biggest employers of freelancers and independent contractors, hiring skilled workers like management consultants, IT consultants, and financial specialists. However, due to lack of fair practice and benefits that’s no longer the case.

Benefit: Offering health and wellness benefits can improve your consulting business’s reputation as a contractor-friendly company and keep skilled workers coming back for collaborations.

5. Media and Entertainment

Why: Productions houses, media companies, and event organisers are known to employ freelancers for short-term projects that can be extremely physically and mentally taxing.

Benefit: Promote well-being by offering health benefits to freelancers and ensure project continuity. Build goodwill with them for future collaborations.

Suggested read: Group Health Insurance for Startups

How To Customise Health Insurance For Freelance Teams?

1. Partner with Insurance Providers

The most effective way to offer health insurance to freelancers is to partner with the right insurance provider. Many group health plans are specifically tailored for freelancers and independent contractors. These plans provide better coverage at highly competitive rates.

2. Leverage Freelance Platforms

Many remote-work platforms like Upwork and Fiverr have started offering health insurance options to freelancers enrolled on their platforms. Businesses can enter into a strategic partnership with these platforms to extend benefits to the freelancers they hire.

3. Offer Health Stipends

In case you cannot directly offer health insurance or club it into your existing group health plan, you can offer health stipends as an alternative to your freelance team. By allocating a fixed amount for healthcare to freelancers, companies can help them in offsetting the cost of individual health plans.

This can act as a motivator for freelancers to continue their collaboration with your business.

4. Sponsor Preventive Care With Just Wellness Benefits

If a comprehensive group health insurance plan seems like a hefty business expense then consider offering just wellness benefits to promote preventive care among your freelance team. It is comparatively cost-effective and still helps in building loyalty towards your business.

Quick read: Why To Invest in Customised Healthcare Plans for Employees?

The Future of Work: A Collaborative Workforce

As the gig economy grows, the lines between traditional workforce and flexible workforce will start to blur. To stay ahead in this highly competitive landscape businesses must learn to adapt and incorporate the best practices to ensure a thriving work environment.

Offering health insurance to freelancers is more than a trend or a branding exercise. It is a strategic investment in your business and your most valuable asset: the people. Not only will you get to attract new levels of talent and productivity but your business will also pave the way for a new and improved way of collaborating with independent contractors and freelancers.

Introducing Onsurity Health And Wellness Benefits For Flexible Teams

When choosing a group health insurance provider for freelancers, businesses should take into account the plan flexibility as the employment contract for freelancers is typically shorter. Onsurity offers health and wellness benefits that are highly customisable and flexible. So that you can effortlessly add or remove team members and get billed monthly with subscriptions starting at just Rs. 145 per member.

Furthermore, Onsurity benefits are comprehensive and can help foster a culture of holistic well-being at work. While it may seem like an upfront cost to your business the long-term benefits far outweigh the immediate cost. When your team is healthy they are twice as likely to be productive and dedicated to their roles. This can reduce your attrition and recruitment costs.

Managing group health insurance plans with Onsurity’s smart Teamsure dashboard is super simple and effective. With the help of this dashboard, you can easily manage claims, track billing, add/remove team members, and get 24*7 support. More than 8,000 businesses are already enrolled with Onsurity. You can also provide Onsurity’s holistic healthcare plan to your employees and freelancers and avail tax reliefs.

FAQs

1. Which is the best health insurance for unemployed people?
Good health and well-being are basic necessities. However, due to the rising healthcare costs, it has become impossible to avail medical treatment without proper health coverage. So, if you are unemployed and wondering if there are any suitable health insurance plans for you then don’t there are many health insurance policies available for low-income groups. Additionally, there are various government health schemes like Ayushman Bharat – Pradhan Mantri Jan Arogya Yojana, Aam Aadmi Bima Yojana, and Pradhan Mantri Bima Yojana that you can enroll in.
2. Is it mandatory to provide health insurance to freelancers?
No, providing health insurance to freelancers is not mandatory. However, if your business actively hires freelancers then you should consider offering it as a benefit to attract and retain highly skilled professionals.
3. What are the benefits of providing health insurance to freelancers?
Businesses that provide health insurance to freelancers can benefit in the following ways – improved business productivity, attracting and retaining top talent, ensuring business continuity, reducing recruitment and onboarding costs, and tax deductions on health insurance premiums.
4. Why do freelancers need health insurance?
Freelancers, like any other individual, require financial protection in the face of a medical emergency. Provisions like health insurance can help them navigate health crises in a seamless and hassle-free manner without having to pay for treatment out-of-pocket.
5. Can freelancers opt for group health insurance?
Yes, at the end of the work contract, the group health insurance benefits also cease to exist. So they automatically get opted out of the benefits.
6. Which group health insurance is best?
There are many group health insurance policies available in India. However, while picking out the best, you should consider the following aspects – flexibility, coverage, tax benefits, billing, and customisation. Check out Onsurity’s health and wellness memberships, starting at a monthly subscription of just Rs. 145 per employee.

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