Terra Sigillata

Another reason to reform employment-linked healthcare: the explosion in temporary employment

Posted by Abel Pharmboy on December 7, 2009
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Free Agent Nation.jpg

An article by Paul Davidson in this morning’s USA Today reminded me of another reason why we need health care reform in the United States, or at least a move away from employment-linked health coverage: temporary employees may soon comprise 25% of the national workforce.

An encouraging jobs report Friday underscored the growing prominence of temporary workers who some experts predict could constitute up to a quarter of the workforce in a few years.

A big reason employers shed a far-less-than-expected 11,000 jobs last month is that temporary staffing agencies found slots for 52,000 additional workers, the most since 2004, the Bureau of Labor Statistics (BLS) said.

Temp workers don’t draw full health benefits from most employers and must therefore seek high-cost personal policies or pray that their spouse has family health coverage.

At the universities and research institutes where I’ve worked over the last 25 years, there have always been strict limitations on temporary employment to terms of 6 months to one year, in part due to the tendency of employers to take advantage of the cost savings of a temporary or contract employee.

One positive outcome of so many people becoming temp employees is that opponents of health care reform might find themselves on the receiving end of health care insurance costs most often encountered by small businesses or traditional freelancers such as writers, industry consultants, restaurant workers, and musicians.

An abrupt transition from being a corporate beneficiary to a free agent is often what is needed for some to accept that a basic level of health care is a human right.

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Comments

  1. #1 Pascale
    December 7, 2009

    Absolutely correct!
    I have never understood why someone who is employed can have excellent healthcare but is not deserving of the same when they become “independent contractors” who often do the same work and as many hours for the same company, just without benefits.
    It is especially horrible when a pre-existing condition keeps these folks and their families from being able to purchase coverage.

  2. #2 NoAstronomer
    December 7, 2009

    It’s probably worth pointing out that the rise in temporary staff and the requirement for employers to provide health-care for their, permanent, employees are not unconnected.

  3. #3 Professor in Training
    December 7, 2009

    As a non-American, I could never understand how employment became tied to health insurance in the first place. What does one have to do with the other? Or more importantly, regardless of why this situation came about, why is it being allowed to continue?

  4. #4 Liz Ditz
    December 7, 2009

    And don’t underlook the chilling effect that employment-linked health insurance has on both entrepreneurship and labor flow.

    [Aside — important to disambiguate health insurance from health care

    In other words, if you are dependent upon an employer for health insurance (which has an effect on your access to, or use of, health care) — you are less likely to start up your own business or move to a different state to in which conditions might be favorable to starting up a new business.

  5. #5 Mick Constantinou
    December 8, 2009

    This can be fixed without waiting for or relying on the government. I established myself as an LLC, a business of one. Now I contract out my services to companies. No more employment contracts which favor the company. Only service contracts. The company (i.e. my LLC) can own the healthcare policy. The LLC can also own a solo 401k plan. All the enablers just like working for a large company, but they are owned by the individual for life. Portable and permanent. No one can ever take them away again.

    After being laid off for the second time in my life last March, I decided to take control of my own destiny. I’m an independent BOTH Professional now.