The General Assembly has approved legislation to create a voluntary portable benefits program for independent contractors in the Volunteer State.
NASHVILLE, Tenn. – The General Assembly has approved legislation to create a voluntary portable benefits program for independent contractors in the Volunteer State.
The Voluntary Portable Benefit Act, sponsored by State Rep. Charlie Baum, R-Murfreesboro, creates a way for 1099 employees to receive benefits like health insurance or retirement without changing their employment status.
“These accounts are voluntary, flexible, and portable, meaning they stay with the individual, not their employer,” Baum said. “This system provides hardworking Tennesseans with access to vital employment benefits while preserving their 1099 status, providing greater security and financial independence.”
Independent contractors could be freelancers, rideshare drivers, temporary workers and even some healthcare providers.
“As we face physician shortages, this program could be key in recruiting and retaining contract healthcare providers who may not receive traditional benefits,” one of the bill’s co-sponsors, State Rep. Bryan Terry, R-Murfreesboro, said. “I commend Rep. Baum for championing this impactful legislation to help thousands of Tennesseans access employment benefits.”
Accounts will be managed by third-party providers like a bank or investment management firm. Contributions can be made by the hiring party or by withholding a portion of the contractor’s compensation. Then, the contractor can choose what benefits they want to enroll in.
The individual and account vendor would have a written agreement for withholdings, but they have the option to opt-out of the account at any time.
The Voluntary Portable Benefit Act now heads to Gov. Bill Lee’s desk and will take effect immediately upon his signature.
Charlie Baum represents House District 37 which includes part of Rutherford County.
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