H 7365Worker Benefits

Labor and Labor Relations - Portable Benefit Plan

This bill allows independent contractors to have benefit plans that travel with them, without making hiring companies legally liable as employers.

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Affected

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Introduced Jan 28, 2026Committee House Labor

Plain-English Summary

This legislation establishes a legal framework for "portable benefit plans" in Rhode Island. These plans allow independent contractors to access insurance or other benefits that are assigned to the individual worker rather than being tied to a specific employer. The bill permits both government and private entities to offer these plans. Key provisions state that contributions to these plans are voluntary and, significantly, that contributing to such a plan cannot be used as evidence to classify a worker as an employee rather than an independent contractor for legal liabilities like workers' compensation.

For younger readers

Imagine you mow lawns for many neighbors to earn money. Usually, only people who have one boss at a big company get help paying for doctor visits. This new rule says that people who work for themselves, like you, can join a special group to help pay for those things. The neighbors who hire you can choose to put money into your special group to help you out. The law promises that if they help you pay for this, they won't suddenly become your "boss" and have to follow all the strict rules that regular bosses do.

Who & Where It Applies

Impacted groups

Independent ContractorsGig Economy WorkersHiring Parties (Businesses)Insurance ProvidersLabor Unions

Impacted communities

All

Constitutional & Fiscal Check

None Likely

Estimated cost

None

Estimated revenue

None

Bill Analysis

Both viewpoints

For Progressives

Creates a mechanism for gig workers, freelancers, and independent contractors to access safety net benefits like health insurance that are typically denied to them.
Establish benefit portability, ensuring that a worker's health coverage or unemployment protection is not tied to a single employer, offering greater security during job transitions.
Encourages companies to contribute to worker welfare voluntarily by removing the fear that doing so will trigger costly lawsuits regarding employment classification.
Codifies a permanent underclass of workers by legally separating access to benefits from full employment rights, effectively subsidizing the "gig economy" model.
Undermines labor efforts to classify gig workers as employees, thereby denying them guaranteed minimum wage, overtime pay, and union protections.
Relies entirely on voluntary contributions from hiring parties, meaning many low-wage independent contractors will likely remain without any meaningful benefits.

For Conservatives

Protects businesses from litigation and liability by clearly stating that offering benefits does not make a contractor an employee, preserving the independent contractor business model.
Promotes free-market solutions by allowing private entities to create and compete in offering benefit plans, rather than mandating a government-run monopoly.
Maintains labor market flexibility, allowing businesses to scale their workforce up or down without the rigid overhead costs associated with traditional employment.
Authorizes "governmental entities" to offer these plans, creating a potential pathway for government expansion into the private insurance market.
Could serve as a "slippery slope" toward future legislation that mandates contributions from businesses, turning a voluntary system into a tax.
May confuse the legal distinction between employees and contractors over time if the plans become indistinguishable from traditional employer-sponsored benefits.

Votes

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Full Bill Text

Changes to existing Rhode Island law · 18 additions

SECTION 1. Title 28 of the General Laws entitled "LABOR AND LABOR RELATIONS" is hereby amended by adding thereto the following chapter: 28-61-1. Definitions. As used in this chapter, the following terms have the meaning ascribed to them in this section, except when the context clearly indicates a different meaning:

(1) "Hiring party" means a person who hires or enters into a contract with an independent contractor.

(2) "Independent contractor" means any person determined to be an independent contractor, pursuant to the provisions of § 28-42-7.

(3) "Portable benefit plan" means a group that offers an insurance product, regulated by title 27 (“insurance”), or chapters 42 through 44 of title 28 (“employment security”) and is assigned to an individual beneficiary and is not associated with a specific employer or hiring party. 28-61-2. Administration -- Assignment of benefits -- Portability.

(a) A governmental entity or private entity voluntarily may offer a portable benefit plan.

(b) Contributions to a portable benefit plan shall be voluntary and may not be used as a criterion for determining a person's employment classification.

(c) A portable benefit plan for the benefit of an individual beneficiary shall not be construed as evidence of employer liability, and a court may not construe the contribution as an element of an employment relationship for purposes of employer lability to include, but not be limited to, the provisions of workers’ compensation, employment security or the provisions of title 28.

SECTION 2. This act shall take effect upon passage.