Health Benefits for Lyft Drivers

Lyft drivers are independent contractors. They are not considered employees. Therefore, Lyft is not required to provide employee benefits. However, Lyft provides auto insurance for covered accidents. Independent contractors are categorized as 1099 workers who can obtain health insurance plans through private insurance plans, catastrophic plans, family member’s plans, or can get some coverage through a care membership plan like Mira. 

Health Benefits Offered as a Lyft Driver

Independent contractors, often referred to as freelance workers or gig workers, are not employees and are not usually eligible for benefits from their company. This means that employers are not required to provide contractors health insurance, worker’s compensation, sick leave, or unemployment insurance. 

1099 workers are usually hired by a company for a specific project or for a short period of time which includes Lyft and Uber drivers. 

Health Care Subsidy for California Lyft Drivers

Lyft drivers in California may be eligible for a healthcare subsidy (financial assistance that is not paid back like a loan) of up to $600 per quarter or $2,400 for the year, under Proposition 22, as described below. To be eligible, Lyft drivers must:

• Drive in California
• Drive at least 15 hours per week over the course of a quarter (Jan-Mar, Apr-Jun, Jul-Sep, Oct-Dec)
• Be enrolled in a qualifying health plan

For California drivers with at least 25 hours per week, this subsidy can go up to $1,200 per quarter.  

California’s Proposition 22

California’s Prop. 22  was a ballot initiative directed by app-based companies such as Lyft, Uber, and Doordash to exclude app-based workers, (such as Lyft drivers) from nearly all employee rights under state law–keeping them as 1099 workers. 

These companies spent $224 million on Prop. 22, passed in November 2020. Prop 22 includes some benefits, such as a healthcare subsidy however, one survey of app-based workers found that only 15 percent have applied for the healthcare subsidy.   

In September 2021, the Alameda Superior Court of California found that Prop. 22 violated the California constitution and must be completely struck down. The gig companies are appealing the court’s decision and asking for a stay of the ruling while the appeal is pending. This entire process can take a year or longer. 

Other states will also find themselves dealing with ballot initiatives from these app-based companies that want to rewrite labor laws and keep their workers under the independent contractor status. For example, there is a similar ballot taking place in Massachusetts.