H06452026 Regular Session✓ Signed into law

Adds to existing law to establish the Portable Benefit Plan Act.

PORTABLE BENEFIT PLAN ACT -- Adds to existing law to establish the Portable Benefit Plan Act.

IntroducedIn CommitteeFloor VoteEnacted

STATEMENT OF PURPOSE

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This legislation seeks to modernize Idaho’s labor market by establishing a framework for Voluntary Portable Benefits. Under current Idaho law, many independent contractors and self-employed individuals—representing a growing segment of the state's workforce—face significant barriers to accessing traditional benefits like health insurance and retirement savings because such offerings are typically tied to traditional employer-employee relationships. This bill provides a "safe harbor" to ensure that voluntary benefit contributions do not trigger worker reclassification, thereby allowing benefits to remain portable and tied to the worker rather than a single employer.

FISCAL NOTE

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This legislation is expected to have no direct impact on the General Fund or local government revenues. The program is entirely voluntary for both hiring entities and independent workers, requiring no state-funded subsidies or administrative mandates.

BILL TEXT

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LEGISLATURE OF THE STATE OF IDAHO Sixty-eighth Legislature Second Regular Session - 2026 IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 645 BY BUSINESS COMMITTEE AN ACT1 RELATING TO THE PORTABLE BENEFIT PLAN ACT; AMENDING TITLE 44, IDAHO CODE,2 BY THE ADDITION OF A NEW CHAPTER 28, TITLE 44, IDAHO CODE, TO PROVIDE A3 SHORT TITLE, TO DEFINE TERMS, TO PROVIDE FOR ADMINISTRATION OF PORTABLE4 BENEFIT PLANS, AND TO PROVIDE FOR TAX IMPLICATIONS; AND DECLARING AN5 EMERGENCY AND PROVIDING AN EFFECTIVE DATE.6

Be It Enacted by the Legislature of the State of Idaho:7

SECTION 1. That Title 44, Idaho Code, be, and the same is hereby amended8 by the addition thereto of a NEW CHAPTER, to be known and designated as Chap-9 ter 28, Title 44, Idaho Code, and to read as follows:10 CHAPTER 2811 PORTABLE BENEFIT PLAN ACT12 44-2801. SHORT TITLE. This act shall be known and may be cited as the13 "Portable Benefit Plan Act."14 44-2802. DEFINITIONS. For the purposes of this chapter:15 (1) "Bank" means a state bank, national bank, credit union, out-of-16 state state-chartered bank, or foreign bank organized under the laws of a17 territory of the United States, the Commonwealth of Puerto Rico, Guam, Amer-18 ican Samoa, the United States Virgin Islands, or Greenland with deposits19 insured by the federal deposit insurance corporation.20 (2) "Department" means the Idaho department of insurance.21 (3) "Hiring party" means a person or entity who hires or enters into a22 contract with an independent contractor.23 (4) "Independent contractor" means any person who renders service for24 a specified recompense for a specified result, under the right to control or25 actual control of the independent contractor's principal as to the result of26 the independent contractor's work only and not as to the means by which such27 result is accomplished.28 (5) "Portable benefit account" means an account owned by an independent29 contractor to fund the purchase of one (1) or more benefit plans.30 (6) "Portable benefit account provider" means the administrator of a31 portable benefit account and includes:32 (a) A bank;33 (b) An investment management firm;34 (c) A technology provider or program manager that offers services35 through a bank or investment management firm; or36 (d) Any other person who demonstrates to the satisfaction of the37 department that the manner in which the person will administer the38 portable benefit account will be consistent with the portable benefit39 account requirements under this chapter.40

2 (7) "Portable benefit plan" means a benefit plan:1 (a) Administered by a third party benefit plan provider chosen by an in-2 dependent contractor and assigned to a beneficiary rather than to a hir-3 ing party; and4 (b) Includes but is not limited to:5 (i) Disability insurance;6 (ii) Health insurance;7 (iii) Income replacement insurance;8 (iv) Life insurance;9 (v) Retirement benefits; or10 (vi) Unemployment insurance.11 44-2803. ADMINISTRATION. (1) Any person or entity, whether public or12 private, including an internet-based or application-based company, may vol-13 untarily contribute funds to a portable benefit account for an independent14 contractor.15 (2) Contributions by a hiring party to any portable benefit account16 shall not be treated as evidence that a worker is an employee of the hiring17 party pursuant to employment security law, worker's compensation law, the18 Internal Revenue Code, or any state and federal employment or labor laws.19 (3) Contributions to a portable benefit account may be made using:20 (a) The funds of the hiring party; or21 (b) A percentage of funds withheld from the compensation owed to an in-22 dependent contractor if all of the following conditions are met:23 (i) The withholding of compensation is expressly agreed to in24 writing;25 (ii) The written agreement is clear, unambiguous, and prominently26 displayed either in a work contract or in a separate invoice;27 (iii) The withholdings are voluntary and require the independent28 contractor to opt-in; and29 (iv) The independent contractor may choose to opt-out of such30 withholdings at any time.31 44-2804. TAX IMPLICATIONS. (1) A hiring party that contributes funds32 to a portable benefit account pursuant to section 44-2803(3)(a) or (b),33 Idaho Code, may deduct as a business expense an amount equal to one hundred34 percent (100%) of any such contributions during the applicable tax year.35 (2) An independent contractor may exclude from taxable income an amount36 equal to one hundred percent (100%) of the amount contributed by a hiring37 party pursuant to section 44-2803(3)(a) or (b), Idaho Code, during the ap-38 plicable tax year.39

SECTION 2. An emergency existing therefor, which emergency is hereby40 declared to exist, this act shall be in full force and effect on and after41 July 1, 2026.42