Outside the Box: How a ‘529 solution’ can give gig workers health care and retirement benefits and boost the U.S. economy


U.S. workers are increasingly combining multiple income streams, moving from job to job, starting businesses, and craving more independence and control over their time.

Changes to worker benefits must keep up to ensure all workers can access the critical support benefits provide. The U.S. benefits system is largely tied to the traditional employer-employee relationship — and in many cases, full-time employment. This system works for people who have chosen traditional employment, but it doesn’t work for everyone. 

“ The benefits of a 529-style system would be widespread, for both workers and the economy.”

The benefits of a 529-style system would be widespread, for both workers and the economy:

It would be good for workers:  Workers who accumulate full-time hours across multiple jobs, whether as part-time employees or as independent contractors, could — in aggregate — receive full-time-level coverage. And those who work less than full-time would no longer be left out. For many, healthcare coverage begins when they devote more than 30 hours a week to a single company, making those benefits unfairly all-or-nothing and dated employment laws often keep benefits out of reach for independent workers.

This approach would provide workers with benefit contributions in proportion to how much they work and wouldn’t depend on employment status. Workers could rely on these accounts to cover insurance or income security when switching between jobs or starting new businesses. Companies working with independent contractors would now compete over contributions toward benefits, creating a race to the top that has never been possible. 

It would be good for companies: Unbundling benefits from employment would reduce the complexity of our fractured, employer-by-employer approach to benefits and streamline the process of onboarding  employees.  This would encourage companies to expand their workforces and reinvest in other resources that best serve workers — all while giving employees more choice. 

It would be good for the economy: Reducing “job lock,” which keeps people in unwanted jobs solely because of benefits, would spur small business creation and unlock innovation.A third of workers say they would be more likely to quit their jobs if they could get health insurance elsewhere, and a full quarter of workers say if employer-provided health insurance weren’t a factor, they would start their own businesses. That’s a remarkable amount of American innovation waiting to be unlocked.

We encourage elected officials to explore this issue more closely and pursue legislation that will create a more portable, flexible benefits system for millions of American workers. By leaning on innovation and creative thinking, we can solve these problems and unlock our economy’s full potential.

Noah Lang, is CEO and co-founder of Stride Health. Max Rettig is vice president and global head of public policy at DoorDash.

Read: Gig companies pledge to help end hunger in the U.S. Some of their workers can’t afford the food they deliver.

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