Companies across America would have the ability to contribute to the Health Savings Accounts (HSAs) of independent contractors without making them full-time employees under legislation being drafted by U.S. Rep. Mike Carey (R-OH).
Entitled the Gig-Worker Health Savings Account Contribution Amendments Act, the forthcoming bill would clarify that companies may contribute to a gig worker’s HSA and clarify that a contribution to a gig worker’s HSA does not make the gig worker an employee, according to a statement Carey released Dec. 19.
The congressman said that a McKinsey survey reported that some 59 million Americans identify as independent contractors or participate in the gig economy, while research from Statista projects that 90.1 million U.S. workers will participate in independent contracting by 2028.
However, current law prevents companies from providing independent contractors with the same health insurance benefits that are enjoyed by full-time employees without losing the flexibility of the independent contractor designation, according to Carey.
While full-time employees use tax-free dollars when paying premiums, gig worker premiums are not tax-favored the same way and they must use after-tax dollars to pay premiums.
Additionally, while gig workers can and do have HSA coverage, they often do not receive funds from their contractors the same way full-time employees do.
Carey’s bill aims to make it easier for businesses to offer these benefits while the gig workers can maintain the flexibility that work provides.