Bill > SB86

This bill introduces the Portable Benefits Act, which establishes a framework for independent contractors to create portable benefit accounts that can be funded by both the independent contractor and the hiring party. The bill defines key terms such as "hiring party" (the entity contracting with an independent contractor), "portable benefit account" (an account owned by an independent contractor to fund various benefit plans like health insurance, income replacement, life insurance, or retirement benefits), and "portable benefit account provider" (which can be a bank, investment management firm, or technology provider). The legislation allows hiring parties to contribute funds to these accounts without being considered an employer, and provides tax incentives for such contributions. Specifically, starting from tax year 2026, hiring parties can deduct 100% of their contributions to a portable benefit account as a business expense, and independent contractors can deduct both the hiring party's contributions and their own contributions as an adjustment to income. Contributions must be voluntary, clearly agreed upon in writing, and require the independent contractor to opt in with the ability to opt out at any time. The bill aims to provide more financial flexibility and benefits options for independent contractors while protecting the hiring party from being classified as an employer.

Budget and Finance

https://alison.legislature.state.al.us/bill-search