Closing the Coverage Gap: Extending Employee Benefits to Gig, Contract, and New-Age Workforce Segments
Providing annual, fixed-structure benefits to such workforce segments is often difficult from both an operational and cost perspective. This does not mean these workers should remain unprotected. Instead, organisations need solutions that reflect how modern work is structured. Extending Employee Benefits to Gig, Contract, and New-Age Workforce Segments.
For decades, employee benefits have been designed around a traditional employment model. An individual joins an organisation as a full-time employee and receives benefits such as health insurance, life cover, accident protection, retirement savings and wellness support. That model still works well for permanent employees. The challenge is that the workforce has changed significantly.
Today, organisations rely on a mix of permanent employees, consultants, freelancers, contractual staff, gig workers and platform-based talent. Flexible workforce models are helping businesses access skills quickly, scale operations efficiently and respond to changing market demands.
While workforce models have evolved, benefits frameworks have largely remained unchanged. As a result, a large section of the workforce continues to operate without adequate protection despite playing a vital role in business success.
The Changing Shape of Work
India’s gig and platform economy has grown rapidly over the past decade. According to NITI Aayog, around 7.7 million workers were engaged in the gig economy in 2020-21, and this number is expected to increase to 23.5 million by 2029-30. By then, gig workers are projected to account for 6.7% of the country’s non-agricultural workforce.
This growth is visible across sectors including logistics, transportation, e-commerce, technology, hospitality, events, fintech and professional services. Organisations are increasingly using project-based and flexible talent models to supplement their workforce requirements. For businesses, these models provide agility and scalability. For workers, they offer flexibility and access to multiple income opportunities.
However, they also expose a significant gap when it comes to financial protection and wellbeing support.
The Protection Gap
Most employee benefits programmes were originally designed for workers who remain with an organisation for long periods. Gig workers, freelancers and contractual employees often fall outside these structures.
As a result, many lack access to employer-sponsored healthcare, accident insurance, life cover and other forms of financial protection. This becomes particularly important when unexpected events occur. A medical emergency, accident or prolonged illness can place significant financial pressure on workers with irregular income streams. Unlike many permanent employees, they may not have access to group insurance or wellness programmes that help absorb such shocks.
The issue is becoming harder to ignore as this segment of the workforce grows. NITI Aayog estimates that gig workers already account for 2.6% of India’s non-agricultural workforce, with their share expected to increase steadily over the coming years.
What was once viewed as an individual challenge is increasingly becoming a workforce resilience issue.
Why It Matters to Organisations
Employee benefits have traditionally been associated with talent attraction and retention. Today, they are also linked to workforce stability and business continuity.
Workers who have access to healthcare and financial protection are generally better positioned to manage unexpected events. They are more likely to remain productive, engaged and committed, regardless of the nature of their employment arrangement.
This is particularly relevant for organisations that depend heavily on gig workers, contractors and project-based talent. Protection can become a differentiator in attracting and retaining quality workers in a competitive labour market.
There is also growing attention on workforce wellbeing from investors, regulators and other stakeholders. ESG considerations are encouraging companies to look beyond permanent employees and consider the welfare of everyone contributing to their operations. There is also a shifting expectation from workers themselves. Increasingly, individuals are evaluating work opportunities not only based on pay, but also on the availability of health, financial and wellbeing support.
As awareness of healthcare costs and financial risks continues to grow, access to basic protection is becoming an important consideration across all workforce segments. This creates an opportunity for organisations to strengthen their value proposition by extending meaningful support beyond traditional employee groups.
Rethinking How Benefits Are Delivered
Traditional benefit programmes assume a stable workforce with long employee tenure. Flexible work arrangements do not always fit that model.
A delivery partner may work across multiple platforms. A consultant may serve several organisations at the same time. Event staff may only be engaged for a few days. Seasonal workers may be employed for limited periods throughout the year.
Providing annual, fixed-structure benefits to such workforce segments is often difficult from both an operational and cost perspective. This does not mean these workers should remain unprotected. Instead, organisations need solutions that reflect how modern work is structured.
The focus should shift from employment status to protection needs. For example, a short-term worker may require accident and health coverage during the period of engagement. A consultant may benefit from portable health and life protection. Different workers may require different levels and types of support depending on the nature of their work. The future of benefits will depend less on standardisation and more on flexibility.
Insurance as an Enabler
Insurance remains one of the most effective tools for extending protection across large and diverse workforce groups. However, insurance products must evolve alongside workforce trends.
Traditional group insurance programmes were developed for fixed employee populations. Today’s workforce requires greater flexibility. Coverage models need to accommodate changing workforce sizes, multiple engagement formats and shorter assignment periods.
This has increased interest in portable and modular benefit structures. Portable benefits allow workers to retain coverage while moving between assignments, contracts or employers. Rather than remaining attached to a single organisation, protection follows the individual.
This is particularly relevant for workers who earn income from multiple sources during the year. Modular benefits offer another solution. Instead of providing the same protection package to everyone, organisations can offer options covering health, accident, life or disability risks based on an individual’s needs and circumstances. Such approaches improve relevance while helping manage affordability.
The Rise of Embedded and Flexible Insurance
Another important development has been the emergence of embedded insurance solutions.
Insurance can now be integrated directly into workforce platforms, onboarding processes and engagement systems. Rather than requiring workers to actively purchase protection, coverage can become part of the overall work experience. This improves accessibility and often leads to higher participation rates. There is also growing interest in short-duration insurance models.
Many gig and contractual engagements are project-based and may last only a few days or weeks. In such cases, traditional annual policies may not always be practical. Daily-rated or short-term insurance structures provide organisations with the ability to extend protection for the exact duration of engagement. This can be particularly useful for event staff, temporary workers, seasonal employees, field teams and delivery partners.
These models make it easier for organisations to provide meaningful protection without being constrained by traditional policy structures.
Looking Ahead
India has made significant progress in expanding social protection. According to data acknowledged by the International Labour Organization, social protection coverage in India increased from 19% in 2015 to 64.3% in 2025, covering more than 940 million people under at least one social protection benefit.
The distinction between permanent and non-permanent workers remains important from a legal and administrative perspective. From a wellbeing perspective, however, the focus should be on ensuring that people have access to appropriate protection regardless of how they work.
Businesses that address this challenge proactively will be better positioned to attract talent, strengthen workforce resilience and demonstrate responsible employment practices. Closing the coverage gap is not simply an insurance priority. It is a workforce sustainability issue.
The future of employee benefits will not be defined by employment status alone. It will be defined by how effectively organisations extend protection, support and financial security to an increasingly diverse workforce. For further insights into the evolving workplace paradigm, visit
Anish Pillai is the President and Deputy Head – Liability & Special Risks, India, at Howden India, with nearly two decades of experience in insurance and reinsurance. He specialises in liability and specialty insurance, helping businesses navigate complex and evolving risk landscapes through tailored risk management and insurance solutions. Over the course of his career, he has led strategic business growth across financial institutions, specialised lines, including sports, media, entertainment, specie and affinity, while advising organisations on managing emerging and complex risks. At Howden India, he focuses on strengthening the Liability & Special Risks practice and delivering innovative risk solutions for clients across industries.
