Health Insurance Options for Contractors: Boost Loyalty and Retention

Contractors play an important role in driving your business success. However, they don’t usually have access to the same health insurance benefits as the rest of your team. In the US, for example, recent data from the Bureau of Labor Statistics indicates that a quarter of freelancers don’t have coverage.

While you’re not responsible for supplying healthcare benefits to contractors, offering insurance could set your business apart. You can stand out from competitors, set up your entire team for success, and boost hiring and retention among your freelance staff.

Plus, offering comprehensive benefits is easier than ever. Global companies can use tools like Deel’s SafetyWing integration to manage health insurance for remote and distributed teams.

Our guide explores how you can provide competitive health insurance without the typical complexities of setting up international coverage. Whether you’re a small business owner or an established enterprise, we show you how to manage all contractor benefits without adding to your administrative workload.

How health insurance for contractors works

In most countries, employers aren’t responsible for administering their freelance team’s health insurance. The workers themselves must determine their legal obligations, register for plans, and make ongoing contributions.

However, companies may opt to provide independent contractors with health insurance benefits on a voluntary basis. These packages can be flexible. Depending on your budget, you can offer basic health and wellness packages or comprehensive coverage on a par with traditional employee benefits.

Now it’s even possible to manage health insurance for global contractors. For example, Deel’s integration with SafetyWing lets you handle plan selection, automatic enrollment, and contract setup for workers based in over 175 countries.

What health insurance benefits you can offer

Packages through services like SafetyWing can cover most of the healthcare coverage you provide to employees, including:

• Surgeries and major procedures
• Emergency care
• Specialist visits
• Physical therapy
• Prescriptions
• Lab tests
• Diagnosis
• Mental health services
• Vision
• Dental

The main difference is how you manage the plans. Employers are usually required to make set contributions to employee health insurance benefits, whereas you’re more likely to pay a fixed monthly sum for contractors.

Alternatively, you could offer contractors a monthly stipend to cover the cost of healthcare. Deel Perks helps you manage this by letting you offer your team discounts and vouchers on over 150 global services. All your workers have to do to access these deals is log in to their Deel account.

Benefits of offering health insurance to contractors

Offering health insurance to contractors may be optional, but it comes with some undeniable advantages:

• Stronger appeal for freelancers: Health coverage makes your company a more attractive prospect for top international contractors
• Better support for workers: Providing insurance for contractors gives them better access to care and helps them perform their best
• Improved employer brand: Offering voluntary benefits tells workers and customers that you genuinely care about your people
• Greater fairness and consistency: Covering employee and contractor insurance ensures a more equitable experience across your workforce

Challenges of offering health insurance to global contractors

While offering health insurance to contractors has some strong benefits, it means navigating some complexities and possible pitfalls:

• Increased misclassification risk: Providing benefits could mean you count as the worker’s employer in some jurisdictions and trigger tax liabilities
• Higher costs: Health insurance can be costly and significantly increase your overall labor spend
• Extra administrative burden: Managing plans puts increased pressure on your HR and payroll departments, especially if you’re a lean team managing several contractor relationships
• Inconsistencies across countries: The availability and quality of plans can vary widely, making it challenging to offer a unified experience for every freelancer

How to add health insurance benefits for contractors

If you’re considering health insurance for contractors, here are the steps you can take to introduce these benefits successfully:

1. Assess the misclassification risk: Check that offering health insurance won’t blur the legal distinction between contractors and employees in the countries where you hire. Deel Contractor can help you verify what you outlined in your proposed agreement before you take any further steps
2. Review the options: Explore the plans you can realistically offer as an international remote company. Consider not only your budget but also your team’s capacity to administer the plans across various countries and states
3. Add the benefit: Integrate platforms like SafetyWing with your existing payroll and contractor management setup and activate the service. If you use Deel, it should now be visible on the dashboard
4. Notify your existing contractors: Let your contractors know about the new benefit and how they can access it. For example, you can explain how they can self-enroll
5. Update your independent contractor agreement: Add terms and conditions about the health insurance to your contract to clarify what freelancers are entitled to and formalize your commitment to their care
6. Monitor performance: As with employee benefits, check enrollment levels to understand which plans to keep using and which to eliminate

Recognize and reward your contractors with Deel

Offering health insurance to contractors can give you a competitive edge in the war for talent. As more businesses come to rely on freelance staff to scale their workforce, this could be the key difference that helps you achieve your goals.

Deel Contractor can make this process simpler for international teams. Our expert legal team checks that any plans you offer contractors don’t pose a misclassification risk for your team and comply with local laws.

Plus, through our integration with SafetyWing, Deel enables you to add and manage health insurance benefits for freelancers directly via the platform.

Interested in offering more perks for contractors? Book a 30-minute call with the Deel team to learn more about how we support contractor hiring, payment, and compliance management.