Trupo, a Brooklyn, New York-based startup that launched this week, is offering a new short-term disability insurance product for gig economy workers--that is, workers who operate as independent contractors rather than as employees of a company. Under the plan, which will open to freelancers in Georgia first, gig workers paying between $20 and $50 a month will receive up to 50 percent of their monthly income for 12 weeks--provided they submit proof from a medical professional that they're too ill to work. (Pregnancy and giving birth don't qualify for coverage.)
Founder and CEO Sara Horowitz has spent more than 20 years helping freelancers get access to benefits generally available only for nine-to-fivers--first, through her work at Freelancers Union, a nonprofit advocacy group she founded in 1995, and now through Trupo.
"We're not waiting--government can't or won't do it. We're building the safety net ourselves," says Horowitz, who stepped down from her role as executive director at Freelancers Union to focus on Trupo.
Contract or freelance workers are generally not eligible to receive benefits like health insurance or paid time off even though data shows they account for about a third of the U.S. workforce. Some studies even suggest that if the current trend holds that number could increase to more than 50 percent by 2027.
Horowitz is on a mission to change that. Previously, the entrepreneur launched Freelancers Insurance Company, a subsidiary of her nonprofit organization that aimed to provide affordable health insurance plans to freelancers. After the Affordable Care Act was passed, however, she had to wind down operations as it became too costly to run, she says. Now with Trupo, Horowitz is teaming up with the Silicon Valley venture capital firm Sequoia Capital, which is co-owner of the business along with Freelancers Union.
"Silicon Valley has an ability to scale and has really deep insights about technology," she says. "I've spent a career deeply understanding freelancers and insurance. [Trupo is] the marriage of that."
The support from the VC firm will help Trupo reach scale while maintaining a social mission, Horowitz adds. Its short-term disability product will be available first in Georgia, where the plan is set to launch in two weeks. Other markets will follow, but Horowitz could not provide a specific timeline. The startup also partnered with Reinsurance Group of America to provide the product. While it will be available to freelancers of all income levels, the maximum benefit is capped at $1,000 per week or $100,000 of annual income.
To be sure, freelancers can buy individual disability insurance plans from several companies, but the process isn't an easy one to execute, says Jeff Smedsrud, co-founder of. "It's hard to define what your occupation and income is," he adds.
Indeed, only 5 percent of gig workers have short-term disability insurance, compared with 42 percent of full-time employees, according to a recent survey by insurance company Prudential. In 2017, Freelancers Union found that 22 percent of its 375,000 members had to stop working for more than a week due to an illness or injury.
Horowitz says that, on average, a freelance worker will set aside about $300 a month in case of an emergency. She argues Trupo--which means "group" in Esperanto--could help offset that need, allowing the gig economy worker to put the extra money in a retirement plan, "which is a better use," she says.