The portable benefits movement: what’s coming and how to prepare

This article provides educational information about portable benefits policy developments. It does not constitute legal, financial, or tax advice. Consult licensed professionals for guidance on your specific situation.

Workers in Pennsylvania who delivered for DoorDash this year earned an average of $200 through a new portable benefits pilot program. What makes this significant isn’t the amount—it’s what 86% of these workers said: they’d choose to remain independent contractors if they could access benefits like traditional employees.

That preference is driving a policy shift. With 73 million Americans freelancing—nearly 40% of the workforce—and only 40% having access to employer-sponsored medical insurance, portable benefits have moved from white papers to real legislation and pilot programs. Here’s what’s happening, what could happen next, and how to prepare.

What are portable benefits?

Portable benefits are employment benefits that stay with you, not your client or employer. Unlike traditional employer-sponsored benefits tied to a single W-2 job, portable benefits follow you from project to project.

You open a portable benefit account with an approved provider. Companies or clients make voluntary contributions—similar to paying your invoice. Funds accumulate across multiple clients and stay in your account, even between projects. You use them for health insurance, paid time off, retirement savings, emergency funds, or disability coverage.

The key distinction: portable benefits don’t change your worker classification. You remain an independent contractor. This isn’t about reclassifying freelancers—it’s about creating benefits infrastructure for non-traditional work.

Why now? The benefits gap

73 million Americans freelanced in 2025, projected to hit 86.5 million by 2027—more than half the US workforce. Yet only 40% have employer-sponsored medical insurance, 25% have dental, and 5% have disability coverage.

Research from the Mercatus Center shows 80.1% of self-employed workers want portable benefits. The DoorDash pilot revealed something more telling: given the choice between becoming a full-time employee or remaining independent with benefits, 54% chose independent contractor status with benefits.

The question isn’t whether people want to freelance—it’s whether the benefits infrastructure will adapt to support them.

What’s happening: a legislative snapshot

United States: State-Level Pioneers

Utah (2023) broke ground with S.B. 233, allowing companies to extend benefits to independent workers without triggering employee reclassification. Stride launched the first portable benefits contributions program in April 2024. By December 2024, Lyft began contributing 7% of quarterly earnings for drivers.

Alabama (2025) went further with tax incentives. Its Portable Benefits Act, effective December 31, 2025, lets hiring parties deduct 100% of contributions as a business expense. Independent contractors can also deduct contributions on their state return—the first state to make portable benefits tax-advantaged for both sides.

Washington State (2024) expanded existing programs. HB 1570 made app-based drivers eligible for Unemployment Insurance and 12 weeks of Paid Family Medical Leave—the first state to provide Paid FMLA to app-based drivers.

Colorado (2024) required delivery network companies to show cost breakdowns to customers and drivers—the first transparency legislation of its kind.

United States: Federal Level

In July 2025, Senators Bill Cassidy (R-LA), Tim Scott (R-SC), and Rand Paul (R-KY) introduced a three-bill legislative package:

1. Unlocking Benefits for Independent Workers Act creates a federal “safe harbor” allowing companies to offer benefits without worker reclassification.
2. Association Health Plans Act lets self-employed and gig workers aggregate for health insurance through Association Health Plans.
3. Independent Retirement Fairness Act empowers independent workers to participate in pooled employer plans and single employee pension IRAs.

The package is currently under committee review. If it passes, it would remove the primary regulatory barrier preventing companies from offering portable benefits nationwide.

European Union

The EU Platform Workers Directive (2024/2831) entered into force December 1, 2024, but takes a different approach. Rather than creating portable benefits, it focuses on employment reclassification—introducing a presumption of employment for platform workers. Member states must transpose it into national law by December 2, 2026.

United Kingdom

The UK has no portable benefits legislation. Self-employed workers pay National Insurance Contributions but must rely on private insurance for income protection, professional indemnity, and liability coverage. Among 4.38 million UK self-employed workers, lack of employer benefits ranks as a top challenge.

Three scenarios: what could happen

Based on current legislative momentum, pilot program results, and historical policy adoption patterns, here are three realistic timelines:

Optimistic Scenario (2-3 Years) — Likelihood: 25-30%

Federal legislation passes by 2026. By that year, 10-15 states adopt portable benefits laws. By 2027, major platforms—Uber, Lyft, DoorDash, Upwork, Fiverr—offer portable benefits as standard.

Drivers: Bipartisan federal support, proven pilot results, major corporate backing, economic pressure from labor shortages.

Barriers: Labor union opposition (viewing portable benefits as enabling worker misclassification), concerns companies avoid employee costs.

What it means: Benefits access becomes standard within 2-3 years. Early adopters gain competitive advantage now.

Moderate Scenario (5-7 Years) — Likelihood: 50-60%

Federal legislation stalls through 2027. State-level adoption continues slowly—5-10 states by 2027. Regional variation emerges. By 2030-2032, federal action or widespread state adoption creates critical mass.

Drivers: Continued state experimentation, corporate voluntary programs, growing worker demand.

Barriers: Political gridlock, state compliance complexity, competing priorities like healthcare reform.

What it means: Benefits access varies by location and platform for 5-7 years. DIY benefits management remains necessary. Advocacy can accelerate regional adoption.

Conservative Scenario (10+ Years) — Likelihood: 15-20%

Limited state adoption through 2030 (5-8 states), no federal action. Incremental progress through court cases through 2035. After that, gradual normalization through market forces.

Drivers: Entrenched labor union opposition, economic constraints, alternative solutions (universal healthcare, expanded Social Security).

Barriers: Unresolved disagreement on worker classification, political polarization, competing social safety net visions.

What it means: Long-term DIY benefits management. Worker cooperatives become more attractive. Geographic arbitrage creates opportunity. Financial resilience is critical.

How to prepare now

No-regrets moves that work regardless of which scenario unfolds:

Build your own package now. Open a Health Savings Account (HSA) if you have a high-deductible health plan. Set up a SEP IRA or Solo 401(k) for retirement. Purchase disability insurance covering 60-70% of your income. Create a 3-6 month emergency fund. These tools exist—you’re just assembling them yourself.

Track your geography. Watch which states adopt portable benefits with tax advantages (Utah and Alabama lead). If you’re location-independent, geographic arbitrage could mean relocating where both you and clients benefit from tax deductions. Otherwise, focus on platforms and clients in favorable states.

Negotiate contributions now. Frame it as win-win: “I’m setting aside funds for health insurance and retirement. Would you contribute $X per month or Y% of project fees to my benefits account?” Some clients will say no. Others may appreciate supporting you without reclassification risk.

Join or form collectives. Worker cooperatives and professional associations pool members for group insurance rates and collective bargaining. A co-op with 50 members has more leverage than you alone. If legislation passes, collectives will be positioned to administer benefits accounts.

Document everything. Keep records of benefits expenses, income sources, and client relationships. If tax-advantaged portable benefits pass, you’ll need documentation. If you face worker classification questions, clear documentation protects you.

Early signals to watch

Track these signals to know which scenario is unfolding:

Federal progress: If the Cassidy-Scott package moves to a Senate vote by mid-2026, expect the optimistic timeline. If it stalls in committee, expect moderate or conservative.

State adoption: If 5+ states pass laws by end of 2026, momentum favors optimistic. If only 1-2 join Utah and Alabama, expect slower adoption.

Platform participation: If Uber, Upwork, Fiverr, or Toptal announce programs in 2025-2026, corporate action may outpace policy. If platforms wait for legislation, expect moderate timeline.

Labor positioning: If unions shift from opposition to negotiation, political resistance decreases. Strong opposition means federal stall.

Looking forward

Portable benefits represent one path toward closing the benefits gap for 73 million American freelancers. Universal healthcare, expanded Social Security, and worker cooperatives offer alternatives or complements.

The timeline remains uncertain. What’s certain: the current system—where 60% of independent workers lack health insurance—isn’t sustainable as the freelance workforce grows toward 86.5 million by 2027.

Your move isn’t to wait for policy certainty. Build your own safety net now, track which scenario unfolds, and position yourself to benefit when clarity arrives.