Health Insurance for Gig Workers: India's HR Imperative for Fair Digital Growth

In India's booming digital economy, nearly 8 million gig workers deliver food, ferry passengers, manage logistics, and power last-mile services (NITI Aayog, 2022). This number is expected to triple by 2030, reshaping not just business models but the very nature of work. Yet behind the scale and speed of India's platform economy lies a hidden crisis: a staggering 80% of gig workers report income instability, daily earnings can fluctuate by up to 40%, and only 20% have access to any form of social protection.

A single medical emergency can erase a year’s savings for a gig worker—if they have any savings at all. Without insurance, gig workers are pushed into debt traps that erode both financial and mental health. Recognising this vulnerability, the Indian government announced a landmark policy shift, proposing to extend healthcare benefits to 1 crore gig workers. During the Union Budget 2024-25, Finance Minister Nirmala Sitharaman stated: "The government will extend social security and health insurance linkages through e-Shram for eligible gig and platform workers across states." 

This signals a new era of formal recognition. However, as experts warn, building a safety net for gig workers will require more than declarations—it demands systemic reform, private sector innovation, and a reimagining of HR practices to truly integrate these workers into India's social protection framework. And while policy announcements are welcome, without systemic change in how gig workers are treated—and insured—the backbone of India’s platform economy remains dangerously exposed.

The fast lane, with no safety net

India’s gig economy is growing at a 9% compound annual growth rate, according to the NITI Aayog Gig Economy Report, and is projected to employ 23.5 million workers by 2029-30.

But rapid growth hides the harshness of gig work realities - workers face unpredictable earnings, algorithm-driven targets, and occupational risks without access to health coverage, grievance redressal, or financial stability. “Gig workers today are delivering real value, but are not protected like regular employees,” says Kulin Shah, Co-founder of Onsurity, a leading InsurTech platform providing healthcare for non-traditional workers.

A budget signal—But the challenge of implementation

The 2025 Union Budget’s commitment to extend health protection under e-Shram-linked frameworks and leverage schemes like PM-JAY Ayushman Bharat is a major shift toward formalising gig worker welfare.

According to Vishal Jain, CEO of Manipal Business Solutions, this is a vital recognition step. “The government’s intent is clear—it’s now up to public and private players to operationalise it," he says. Yet, as noted by the India Employment Trends 2022 report by ILO, success will depend on tackling challenges around fragmented data systems, low worker awareness, and cooperation from private platforms.

HR’s new responsibility: Inclusion, not just compliance

Traditionally, gig workers have fallen outside HR structures. But the growing dependency on gig labor has blurred those boundaries. Full-time employees and gig workers often contribute equally to business outputs—yet only one group is protected. “The type of contract shouldn’t determine whether you’re allowed to be healthy,” says Kulin Shah. “That’s a moral and business failure.” Furthermore, several companies like Urban Company have piloted health benefits and skilling initiatives for gig workers, showing that HR must now own a broader definition of workforce welfare.

Pay instability: The hidden driver of financial and mental health risk

The All India Gig Workers Union (AIGWU) found that 60% of gig workers demanded transparency around pay structures. Unclear incentive algorithms, delayed settlements, and inconsistent earnings destabilise financial planning—making emergency preparedness nearly impossible.

Moreover, the ILO India Report 2022 shows a direct link between financial insecurity and higher rates of anxiety and depression among precarious workers. The HR implication? Financial stability measures—like predictable pay cycles and access to insurance—are not ‘good to have.’ They are essential.

Innovation: Building practical health solutions for gig workers

Companies like Onsurity are redefining how health benefits are delivered. Their subscription-based insurance model allows companies to provide monthly healthcare packages—including hospitalisation, mental health support, and family coverage—to freelancers, contractors, and short-term workers.

Manipal Business Solutions, meanwhile, embeds gig worker wellbeing through community support models, offering field grievance redressal, training, and peer support. This model of tech-enabled, flexible, real-time coverage could become the blueprint for responsible gig workforce management in India.

Mental health: Still missing in action

Mental wellbeing remains an ignored area despite mounting stress in the gig sector. A 2022 study by Oxfam India reported that over 50% of gig workers face stress and burnout—but few access mental health services, largely due to stigma, cost, or lack of offerings. “Younger workers are open to support if it’s accessible,” Shah notes. “Platforms must integrate mental health into their broader wellbeing offerings.”

Toward a new social contract

The future of India’s gig economy rests not on endless growth alone, but on building safety nets that match the realities of modern work. Health insurance is not a fringe benefit. It is the foundation for resilience, fairness, and sustainable economic participation. Policy reform, HR leadership, and InsurTech innovation must converge to ensure no worker—whether on a bike, laptop, or factory floor—is left one accident away from destitution. If India is serious about building an inclusive digital economy, protecting the health of its gig workers is not optional, it is imperative.