> Why wouldn't her employer let her opt out of insurance?

Is this... a thing? I've never had that option in any of my jobs. Sure, I can choose not to take the employee sponsored health insurance, but then I'm just opting out of my share of the monthly premiums the company would deduct. But in general, a company pays more than that. I've never been able to opt out of company insurance and recover their share of the premiums! I assumed that wasn't legal for them to offer.

Oh, and to be explicit about the connection: that's why an independent contractor would be paid more. If an employee's wage is $x, a company generally pays something like $(2x), and so an independent contractor would expect to be paid something closer to 2x than x. (Usually because they* then have to pay certain taxes, and worry about their own benefits, etc.)

Most employers aren't going to pay you more for opting out of insurance. Many employers would try to keep your hours low so they don't have to offer you insurance.

"When you say it like that, you are describing an employee not an independent contractor."

This doesn't make sense to me. She has more autonomy than an employee would. They give her that level of autonomy by not making her an employee. She does not get a W2.

"But your layer comment, about setting her own rates, makes me think that she is working as an actual freelancer, not as a gig employee."

There's a lot of overlap between those terms, except replace employee with worker. I would say she's a freelance gig worker. Freelance tends to mean that you are just independent. You can work on an individual project for a company and move on, but it's usually larger pieces of work. As a gig worker, I see it as being more of a repetitive task for various customers. You can be a freelance driver and work for both uber and Lyft, or even uber and a taxi company. The gig part is that they are always individual tasks you get paid for - each ride. This is very similar to what she is doing.

So I see gig workers as freelancers, but not all freelancers are gig workers.