Another Obamacare Success Story: NY Freelancers Union Drops Insurance Coverage

The Freelancers Union, which is based in Brooklyn, doesn’t bargain with employers, but it does address what is by far these workers’ No. 1 concern, by providing them with affordable health insurance. Its health insurance company covers 23,000 workers in New York State and has $105 million in annual revenue. Impressed by that success, the Obama administration recently awarded Ms. Horowitz’s group $340 million in low-interest loans to establish cooperatives in New York, New Jersey and Oregon that will provide health coverage to freelancers and tens of thousands of other workers.  Having health insurance makes it far easier to be a part of what Ms. Horowitz calls the “gig economy.” But many freelancers would prefer not to participate in that economy at all. They would rather have regular jobs, but companies will often hire them only as independent contractors. Companies find these workers less painful to dismiss and generally less costly because they rarely receive severance pay or benefits like health insurance or paid vacations.

The Freelancers Union, which provides health insurance to 25,000 of its members in New York State, is ending an experiment in providing low-cost insurance to independent workers, saying the new landscape created by the federal Affordable Care Act makes it impossible to do so.  
The union’s decision came after the state gave the Freelancers Insurance Company, which the union created in 2008, a one-year exemption from the act’s provisions so that it would have time to adjust.  
But officials of the union said on Tuesday that to stay in business as an insurance provider, it would have to raise premiums by 14 percent across the board, a direct conflict with its reason for going into the insurance business in the first place. In 2014, monthly premiums for the plans, which were only offered in New York, averaged $502. …
The withdrawal from the insurance business is a substantial retreat for the Freelancers Union, whose founder, Ms. Horowitz, won a MacArthur Fellowship “genius” grant in 1999 for her work on behalf of independent workers.