The Rise of Independent Contractors and the Need for Portable Benefits
With the increasing popularity of freelance work, side hustles, and the gig economy, the issue of employee benefits has become a crucial topic. During the John Locke Foundation’s 2026 Carolina Liberty Conference, David Iglesias from the Libertas Institute emphasized the importance of developing portable benefits tailored for non-traditional workers.
Independent Contractors in the Workforce
According to data from the US Bureau of Labor Statistics, over 11.9 million Americans identify as independent contractors, making up approximately 7.4% of the U.S. labor force. This growing segment faces significant challenges in accessing traditional employer-provided benefits, such as health insurance and retirement plans. Unlike W-2 employees, many freelancers must independently manage their own benefits, which raises the need for policy discussions aimed at expanding portable options that can travel with workers across different gigs.
The Shift Towards Independent Work
“It’s no secret that America’s workforce is becoming increasingly independent,” Iglesias noted. The COVID-19 pandemic has catalyzed this change, prompting many individuals to adopt remote work, pursue self-employment, and gain control over their schedules. This shift highlights the urgent need for benefit options that cater to the independent workforce.
The Landscape of Solo Businesses
According to the US Small Business Administration’s Office of Advocacy, North Carolina alone boasts nearly 915,000 solo businesses. However, many of these businesses struggle with providing their contractors access to essential benefits due to the complexities surrounding worker classification. If contractors are treated akin to traditional employees, there is a risk of facing legal repercussions for misclassification.
States Exploring Portable Benefits
In response to the growing demand for benefits among independent contractors, several states have initiated pilot programs aimed at offering portable benefit options. States like Utah, Pennsylvania, and Georgia are at the forefront of these initiatives, seeking to provide legal frameworks that allow companies to support contractors without the risk of reclassification.
Utah’s Portable Benefit Plan
In 2023, Utah enacted S.B. 233, a Portable Benefit Plan that establishes a legal framework allowing companies to voluntarily contribute to contractors’ benefit plans. This legislation clarifies that offering such benefits—like health coverage and retirement plans—does not constitute an employer-employee relationship, giving businesses the legal certainty to expand benefits for gig workers.
Success Stories from Pilot Programs
In April 2024, Pennsylvania launched a 12-month pilot program that reached over 4,000 DoorDash contractors. According to Iglesias, around 66% of participants lacked the benefits they desired. Following the program, 77% reported feeling more financially secure, and 91% expressed a desire for the initiative to become permanent. Similarly, a 2025 pilot program in Georgia involved over 5,500 contractors, with nearly 75% gaining access to benefits they previously lacked.
Using insights from these programs, Iglesias confirmed a clear trend: a significant portion of independent contractors seek the benefits that portable options can provide. “80% of independent contractors want portable benefits while remaining independent,” he stated, emphasizing that maintaining their flexibility is paramount.
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Rethinking Benefits for Independent Contractors: The Move Towards Portability
The landscape of employment is evolving rapidly, with freelance work, side hustles, and the gig economy on the rise. This shift raises pressing questions about how benefits such as health insurance and retirement plans are provided to non-traditional workers.
The Rise of Independent Contractors
Data from the U.S. Bureau of Labor Statistics reveals that over 11.9 million Americans now consider independent contracting as their primary employment, comprising about 7.4% of the domestic labor force. This significant growth prompts discussions on the need for portable benefits that cater to the unique needs of those who are not traditional W-2 employees.
Challenges in Accessing Benefits
One of the most significant hurdles for freelancers and gig workers is the lack of access to conventional employer-provided benefits. Unlike traditional employees, independent contractors often must navigate the complexities of securing their own health insurance and saving for retirement without readily available employer-sponsored plans like 401(k)s. As this workforce expands, there is a growing emphasis on establishing portable benefits that remain with the worker regardless of their employment status.
Emerging Legislative Solutions
Several states have recognized the need for legislative intervention to safeguard the benefits of independent contractors without compromising their employment status. In particular, Utah, Pennsylvania, and Georgia are leading the charge with innovative approaches that facilitate the provision of portable benefits.
Utah’s Legislative Framework
Utah’s S.B. 233, enacted in 2023, establishes a legal framework allowing companies to offer portable benefits to independent contractors without the risk of reclassification as employees. This legislation clarifies that benefits like health coverage and retirement savings can be provided without creating traditional employer-employee relationships, encouraging businesses to extend these crucial resources to gig workers.
Pennsylvania’s Pilot Program
Initiated in April 2024, Pennsylvania’s 12-month pilot program engaged over 4,000 DoorDash contractors. Interestingly, 66% of participants reported lacking access to necessary benefits. The program demonstrated promising results, with 77% of participants feeling more financially secure and 91% expressing a desire for the program to become permanent.
Georgia’s Initiative
Following Pennsylvania, Georgia launched its pilot program in January 2025, involving more than 5,500 DoorDash contractors. Nearly 75% of respondents who previously lacked desired benefits gained access through this initiative. With 73% reporting increased financial security, the program underscores the demand for portable benefits among gig workers.
The Demand for Portable Benefits
Using insights from various pilot programs, it is evident that independent contractors exhibit a strong desire for portable benefits while maintaining their independence. Approximately 80% of independent contractors indicated that they would welcome portable benefits without sacrificing their flexible employment status. This highlights a critical gap in the current employment benefits landscape that needs to be addressed to support the modern workforce.
