Health Insurance

Health Benefits for Lyft Drivers

Erica Kahn
Erica Kahn23 Aug 2022

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.

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Lyft Coverage if You are in an Accident 

Lyft is not required to pay for injuries that occur on the job (worker’s compensation) since Lyft drivers are not classified as employees, although they do offer auto insurance. Auto insurance is the only type of insurance Lyft offers that may help if you are injured in an accident. To drive with Lyft, you must have a personal auto insurance policy that meets minimum state coverage requirements. Below is what Lyft will cover:

  1. The app is turned on and you are waiting for a ride request: Lyft provides third-party liability insurance for covered accidents if your personal insurance does not apply.
    1. $50,000/person for bodily injury
    2. $100,000/accident for bodily injury
    3. $25,000/accident for property damage
  2. The app is on and you are picking up passengers or during a ride: Lyft provides the following insurance for covered accidents:
    1. $1,000,000 for 3rd party auto liability
    2. Uninsured/underinsured motorist bodily injury
    3. Contingent comprehensive and collision up to the actual cash value of the car ($2,500 deductible)
  3. The app is off:
    1. Your personal auto insurance coverage applies.

According to Lyft, third-party liability auto insurance covers “bodily injury and property damage to someone else or their belongings in a covered accident.” Uninsured/underinsured motorist bodily injury insurance covers injuries to passengers and the Lyft driver caused by a driver who lacks sufficient insurance. Lastly, contingent comprehensive and collision coverage covers damage to the Lyft driver’s car up to its actual cash value (minus a deductible). 

Health Insurance Options for Lyft Drivers 

Seventy-five percent of Lyft drivers have coverage from another source, such as a primary job. Below is a list of ways you can get health insurance options as a Lyft driver:

  1. Private insurance plans can be bought from the health insurance marketplace during open enrollment each year, with some exceptions. Insurance plans on the marketplace are tailored to your demographics, budget, and needs.
  2. Health insurance alternatives like Mira work to increase access and affordability of the most common medical services. For a membership cost of just $45 per month, you can access urgent care visits, lab testings, and up to 80 percent off on over 1,000 prescriptions
  3. Family members’ plans can help you stay covered as a 1099 worker. You can remain on your parents’ health insurance plan if you are under 26, or if you are married you may be able to get covered by your partner’s health insurance.
  4. Catastrophic plans protect you financially in the case of unexpected major injury or illness so that you can avoid medical debt. You must be under 30 to qualify. It is a basic, inexpensive health insurance plan option with a low monthly premium and a high deductible.

Lyft Driver Health Benefits Frequently Asked Questions (FAQs) 

Below we answer some questions you may have regarding the qualifications of a Lyft driver or resources for drivers on ridesharing apps. 

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What are the requirements to be a Lyft driver?

Eligibility requirements to become a Lyft driver vary based on state. The minimum age requirement to be a Lyft driver ranges from 21-25. All Lyft vehicles must have 4 doors and a minimum of five seatbelts. If you don’t own a vehicle, you can also rent one through Lyft’s Express Drive program. 

When applying, you must have a background and vehicle check and pass a community safety education program. You also need an iPhone or Android device that you can use the app while you drive.

How are Lyft drivers paid? 

Lyft drivers’ pay is determined based on the time and distance of a ride. Lyft drivers keep 100 percent of their tips and can also earn bonuses through the app. Their driver’s guide to pay outlines how to optimize your earnings.

Bottom Line

Lyft driving allows for flexibility and control over your schedule but does not provide health insurance. As an independent contractor, it is important to know that there are other ways to be insured without relying on your employer, ranging from private insurance plans, family member plans, or catastrophic insurance plans. The debate over whether drivers for app-based companies like Lyft, Uber, and Doordash should be considered independent workers or employees is ongoing and can affect your access to health benefits in your state.

If you cannot afford insurance or want to have supplemental coverage, Mira can help. Mira offers exclusive health benefits for just $45 per month and with no deductible, including affordable urgent care visits, low-cost lab testing, and discounted prescriptions. Our care navigation team can also help you find affordable healthcare services in your area! Sign up today to get started.

Erica Kahn

Erica graduated from Emory University in Atlanta with a BS in environmental science and a minor in English and is on track to graduate with her Master's in Public Health. She is passionate about health equity, women's health, and how the environment impacts public health.