New Law: Tennessee Becomes the Latest State to Embrace Portable Benefits for Independent Workers
On April 3, 2025, Governor Bill Lee signed the “Voluntary Portable Benefit Plan Act” into law, making Tennessee the second state in the country to formally enable portable benefits for independent workers.
This is a big deal.
Much like Utah’s trailblazing legislation passed in 2023, Tennessee’s new law provides a safe harbor for companies to voluntarily contribute to benefits for independent contractors—without impacting their classification as contractors or the work flexibility that comes with it.
This bill clears a path for innovation: companies can now help independent workers save for health insurance, paid time off, retirement, and emergency expenses without undermining the flexibility those workers value.
This isn’t theoretical. We’ve seen what this unlocks on the ground in Utah, where Stride worked with Target's Shipt and Lyft to deliver health benefits to thousands of independent workers, and in Pennsylvania and Georgia, where Governors Josh Shapiro and Brian Kemp have both supported programs enabling DoorDash workers to receive defined contributions toward benefits they choose themselves.
Now, Tennessee has joined this growing national movement.
The Modern Worker Needs a Modern Benefits System
More than 72 million Americans will engage in independent work in 2024. That includes full-time freelancers, app-based gig workers, truck drivers, nurses, musicians, and many others in seasonal or non-traditional jobs. Full-time independent work grew 6.5% year-over-year, and now represents nearly 17% of the U.S. workforce (Source: State of Independence, MBO Partners).
But our benefits system hasn’t kept up.
In America, basic financial protections like health insurance, paid time off, and retirement savings are still largely tied to full-time W-2 jobs based on a benefits system established in the late 1940s. That leaves a growing segment of the workforce on the outside looking in, even as they power critical industries and keep our economy moving.
That’s why portable benefits—benefits that move with the worker regardless of how or where they work, including their classification—are so essential. And that’s why safe harbor laws like Tennessee’s are so powerful.
Clearing the Path for Innovation
For years, companies have wanted to do more for their independent workers. But a lack of regulatory clarity made it difficult. If a company contributed to a worker’s health plan or savings account, they risked triggering a reclassification, even if that worker actively chose independence and didn’t want to be an employee.
These new laws change that. With safe harbors in place, companies, industry groups, and third-party benefits platforms can now contribute to workers' portable benefits accounts without jeopardizing their classification.
That means:
More workers can access the safety net they need, even outside of a traditional job.
More companies can support workers they rely on, without regulatory fear.
Early adopter states can foster innovation in benefits delivery, attracting innovative companies to invest in workers in their state while creating models for the rest of the country to follow.
Momentum is Building
Tennessee isn’t alone. Since Utah passed its landmark law in 2023, similar legislation has been introduced in Alabama, Arkansas, Florida, Hawaii, Massachusetts, Nevada, New Jersey, and Rhode Island — and now, Tennessee has taken the next step by signing theirs into law.
Meanwhile, at the federal level, Representative Kevin Kiley (R-CA) introduced the Modern Worker Security Act, the first-ever federal safe harbor bill for independent workers. If passed, it would allow companies nationwide to contribute to portable benefits without affecting workers’ employment status.
We’ve advocated for this approach for a decade. The moment has arrived.
A Future Where Benefits Follow the Worker
Independent work isn’t going anywhere—in fact, it’s accelerating. That means our safety net has to evolve alongside it. Portable benefits are the foundation of that evolution.
With laws like Tennessee’s Voluntary Portable Benefit Plan Act, we can finally build a system where workers don’t have to choose between flexibility and financial security—they can have both.
To the leaders in Tennessee who made this possible, and Utah for paving the path: thank you. And to the states considering similar action: the time is now.
Let’s build a benefits system that reflects how Americans actually work today.
