While he was running for Senate in the 2012, Ted Cruz spoke extensively on the virtues of portable health insurance — insurance not associated with any particular employer, but insurance that works more like vehicle insurance or homeowner’s insurance.
Though the idea is not unique to Senator Cruz, in a world where Obamacare is causing premiums to sky rocket, coverage to lessen, and government-sponsored co-ops to flop, portable health insurance is becoming a frequent visitor in health insurance reform circles.
“More insurance plans will move with the person, not the job. That’s real health security,” said Speaker Ryan recently, explaining his new health care proposal. “This is not the twentieth century where you have the same job for your entire career, your entire life. You move around, you bounce around. We want to have a twenty-first century system that’s portable with the person.”
— Paul Ryan (@SpeakerRyan) September 5, 2016
Portable benefits might just have bipartisan support. Even Hillary has preached about their worthiness. In her version, these portable benefits are expanded beyond health insurance.
Perhaps it should not be surprising that we are starting to hear politicians such as Hillary Clinton talking about the idea of “portable benefits.” Under this idea, independent workers could pay into a pooled resource that would provide them with the benefits that traditional employees get, such as health insurance and a retirement plan. Robert Reich, former Labor secretary, similarly, has been speaking about the need for income insurance, to help independent workers who don’t qualify for unemployment smooth out unsteady income, as well as portable benefits.
Would portable benefits work? Forbes Contributor, Elaine Pofeldt, interviewed Gene Zaino, president and CEO of MBO Partners. His company has offered portable benefits for more than a decade with great success:
Self-employed professionals who opt to use a shared corporate structure with MBO Partners get access to services such as invoice collections, expense management, business insurance, quarterly tax administration, and benefit plans, such as a 401(k) and access to group health insurance. Those who opt to keep their own corporate structure can obtain a solo 401(k) through MBO Partners, as well as individual health insurance. In either case, they can hold onto these benefits as they move from project to project, regardless of which client they are serving.
Because Zaino has already been able to offer portable benefits, he is confident that they could be offered on a larger scale. “This is all doable,” he says. “If we want our government to give this away to people, that’s a political decision. It can certainly be orchestrated through existing knowledge and technologies for people to have their own portable benefits.”
But the real challenge, Zaino notes, is that many independent workers are not aware of what traditional benefits for workers actually cost and don’t factor that into what they charge for their services. “If people understood what these things cost they would either not take the project or want more money for it,” says Zaino.
Even if the self-employed are aware, they may not be able to compete effectively for new business if they price their services to reflect what they actually would have to pay to buy a traditional suite of benefits they might get at a corporate job.
“We need to be careful in this self-employed gig economy,” says Zaino. “Where people are doing work that is commoditized, like driving a car or walking a dog, there is a risk of the market driving down the pay in a race to the bottom. Just like there is a minimum wage, there may need to be some minimum that people should be getting paid on some of these things.”
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