Portable Benefits Proposals Gaining Steam in Congress

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By Chris Opfer

July 28 — Lawmakers on both sides of the aisle are exploring portable benefits as a way to help workers in contingent jobs gain health-care coverage, save for retirement and obtain some of the other protections usually reserved for traditional employees.

The portable model would allow employers to pay into a benefits pool on a flexible, pro rata basis and give workers the ability to take those benefits with them when they change jobs. It's been at the forefront of discussions about regulating the sharing economy in Congress, staffers and stakeholders involved in the talks told Bloomberg BNA.

Sen. Mark Warner (D-Va.) stumped for portable benefits for on-demand gig workers at two Democratic National Convention events earlier this week. Republicans July 18 approved a party platform in which they said changes in technology and the workplace mean that employees need “portability in pension plans and health insurance.”

A variety of questions remain about what a portable benefits system might look like, including who would administer it, what types of workers would be eligible and what benefits might be included. A number of high–profile gig employers—including car-sharing platforms Uber and Lyft and on-demand residential cleaning and repair service Handy—have discussed these and other issues with members of the bipartisan sharing economy caucus in the House, and with Warner and others in the Senate.

“Lyft is committed to helping lead the discussion around the transition required to support the workforce of today—and tomorrow,” the company's policy communications director, Adrian Durbin, told Bloomberg BNA via e-mail July 27. “We commend the many members of Congress who are focused on supporting the on-demand economy and the benefits it brings to society.”

Worker advocates say the portable concept could also extend to a wide variety of independent contractors in more traditional jobs. Contractors typically aren't eligible for tax withholdings, unemployment insurance and minimum wage protections and aren't offered health-care and retirement benefits.

New Social Contract

Lawmakers in Congress aren’t the only ones starting to give portable benefits a hard look. The Labor Department July 27 announced a new $100,000 grant for nonprofits to tinker with portable models aimed particularly at low-income workers.

Given the myriad state and local laws—including those related to tax and employment classifications—that could come into play, the ultimate goal is to use federal legislation to set the parameters for portable benefits programs. Congress is unlikely to move quickly, but supporters say the DOL grants and experiments at the state and local levels could help generate some best practices

Meanwhile, Warner said the time is now to start seriously considering workable models.

“If we don’t re-devise a social contract that works in the 21st century or a capitalism that works in the 21st century for a broad group of people, then the anger and the discontent that is palatable on both ends of the political spectrum is going to not just be demonstrated at both of these conventions, but is going to become a movement that will disrupt a lot that can be fixed in America,” Warner said July 27 at an event hosted by Politico.

Warner is the co-chairmen of the Aspen Institute’s Future of Work Initiative, along with former Indiana Gov. Mitch Daniels (R). The group in a recent paper identified a number of the remaining questions about how to craft a system and overcome regulatory hurdles.

Businesses that hire contract labor have been skittish about offering benefits and training to workers because of concerns that the moves could make them liable as traditional employers under labor and tax laws. One of the main hurdles is crafting a system that allows them to chip in on benefits without taking on the legal ramifications.

The Aspen group pointed to a handful of programs already in place that could serve as a launching point for a portable benefits proposal. That includes the multiemployer benefit plans that some unions have negotiated with construction and entertainment businesses, as well as a pooled workers' compensation benefits system for livery drivers in New York and a health insurance program for workers in San Francisco.

To contact the reporter on this story: Chris Opfer in Washington at copfer@bna.com

To contact the editor responsible for this story: Susan J. McGolrick at smcgolrick@bna.com

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