Key Takeaways
- COBRA allows eligible W-2 freelancers to keep their health coverage for up to 18 months after an assignment ends.
- Some staffing agencies, like Aquent, require freelancers to work only 20 hours per week to qualify for group benefits on future assignments.
- Understanding options for retirement plans, HSAs, FSAs, and re-enrollment can help freelancers avoid costly gaps and make smarter financial decisions.
Many freelancers feel relieved to learn that partnering with a staffing agency means they no longer have to go it alone with benefits. Nearly half of freelancers report difficulty accessing health insurance, and 23% say they have no coverage at all.
Taking on an assignment through a staffing agency can offer valuable support, such as access to benefits for freelancers, group-rate pricing, and other perks. And while having quality benefits during a project is a huge advantage, what happens when that project wraps up?
The good news is that just because your assignment ends, it doesn’t mean your benefits have to. Knowing your options can help you take the best next steps while you’re between gigs.
Knowing your freelance health insurance options
Many face high deductibles and expensive plans when shopping for health insurance for freelancers. But when you work with a staffing agency, you can often access premium benefits at lower group rates. While your coverage usually ends with your assignment, that doesn’t mean you’re out of options. Here are a few things to consider when it comes to health insurance.
COBRA can help you maintain coverage
COBRA is a federal law that allows employees and their families to continue group health coverage after a job loss or another qualifying event, such as the end of a W-2 freelance assignment. In most cases, you can keep your existing health insurance as a freelancer for up to 18 months, and sometimes up to 36 months, depending on your situation. A couple of things to keep in mind:
- You'll be responsible for the full premium, since the staffing agency will no longer subsidize the cost.
- Your coverage and deductible history usually remain intact if you stay on the same plan and within the same calendar year.
You may be eligible for health benefits again when you return
Do you enjoy working with your staffing agency? If so, let them know you’re open to new opportunities. When you land your next gig, you may be eligible to re-enroll in group benefits for freelancers. Some agencies, like Aquent, require only an average of 20 hours per week to qualify. So you could take on a smaller project and still keep the flexibility to add more work as it comes.
Understanding your retirement plan status
Some freelancers worry that short-term assignments don’t make using a staffing agency’s retirement plan worth it. However, if your agency offers a 401(k), especially with matching contributions, even a short project can help you grow your savings quickly. That said, it’s important to understand exactly what happens when the project ends.
A good starting point is to ask about the vesting schedule for employer-matched contributions. Are you fully vested from day one, or does a schedule apply? If it’s the latter, that schedule will determine how much of the matched funds you can take with you.
Next, make sure you understand your options for how and where to move your retirement funds when your assignment ends. Common options include:
- Leaving your funds in the existing 401(k) plan. Check with your retirement provider to see if this is available.
- Rolling them into an IRA or another employer-sponsored plan.
- Cashing them out.
Keeping your funds in the existing plan or rolling them into another qualifying plan can help you avoid unnecessary costs. Cashing out, on the other hand, could come with tax implications that set you back.
What to know about HSAs, FSAs, and paid time off
Do you have a health savings account (HSA) or a flexible spending account (FSA)? If so, it’s important to understand which funds can come with you, which can’t, and any rules that apply.
For example, HSAs are usually tied to high-deductible health plans and are portable under certain conditions. FSAs, on the other hand, typically follow a “use it or lose it” rule, so those funds may not carry over from one year to the next.
It’s also worth checking on your paid time off. While many staffing agencies don’t offer traditional vacation time, some now provide paid sick leave—Aquent was one of the early adopters. Ask what happens to any unused time. Is it paid out, or do you lose it? Your staffing agency can help clarify the details.
Don't forget about re-enrollment
Building a strong relationship with your staffing agency can be a big help if you’re hoping to land more assignments in the future. While some projects have firm end dates, agencies often have new roles to fill, and one might be a great fit for your skills and availability. If so, you may be able to enroll in group benefits for freelancers again.
Understanding the re-enrollment process can help you avoid surprises or gaps in coverage. Consider asking your agency:
- What's the process for re-enrolling in benefits?
- Will my previous deductible and co-insurance payments carry over?
- How do I requalify, and is there a waiting period?
If you return within the same calendar year, your deductible may reset, depending on the timing and the agency’s policies.
Preparing for the future
The nature of freelance work is constantly in flux, but when you work with a staffing agency, you can enjoy the flexibility and benefits for freelancers that help you feel supported. And even when your project ends, a little planning can help you feel more prepared for the gap between assignments and be ready for whatever comes next.
Are you planning for your next freelance assignment? Ask these five important questions about benefits to help you decide which opportunity is the best fit.
About the authors
Nicki Howell is a freelance writer and content strategist with deep expertise in benefits, insurance, and technology trends. As a contributor to industry publications like BenefitsPRO and PC360, she covers topics ranging from pet insurance and workplace presenteeism to employee assistance programs and mental health. With over a decade of experience, Nicki specializes in translating complex industry concepts into engaging, accessible content for professionals.
With over 16 years of experience in Human Resources and Benefits, Sharrell is a leader in designing programs that foster employee well-being, inclusivity, and engagement. As a Benefits Manager for the past three years at Aquent, she has spearheaded transformative initiatives, including equalizing Canadian benefits to align with U.S. offerings and building a robust wellness program focused on the four pillars of wellness: physical, mental, financial, and social well-being. She is excited to embark on more global initiatives as well. In her role, Sharrell has also championed inclusivity by enhancing health insurance benefits to better serve all employees. Her efforts include adding gender affirmation coverage and expanding fertility benefits, ensuring that the company’s offerings reflect the diverse needs of its workforce. She combines strategic vision with a people-first approach to create benefits strategies that align with organizational goals and foster a culture of care.Sharrell holds a Master’s degree in Human Resources Management and the PHR (Professional in Human Resources) certification. A passionate advocate for Diversity, Equity, Inclusion, and Belonging (DEIB), she is an active member of her company’s DEIB council, working to advance equity and belonging through benefits programs and workplace initiatives.
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