What are Portable Benefits?

Updated: Jan 25

National App-Based Work Alliance Will Advocate for Solutions That Preserve Worker Independence and Access to Benefits

The rapid growth of digital technology is revolutionizing the way millions of Americans work every day. Where going to work used to mean clocking into a rigid 40-hour schedule, earning an income is now as simple as turning an app on and off.

App-based platforms give workers the flexibility to set their own hours, manage their own schedules, and be their own bosses. But it’s more than that; flexibility gives workers the ability to spend time with their families, juggle multiple jobs, go back to school and get a degree or certification, or even take some much-needed time for themselves. In fact, one study found that 71% of workers cite flexibility as a major reason they choose to work independently.

This flexible way to work is meeting an important need, especially now, when so many Americans are looking for opportunities to earn. According to a recent survey, over 57 million Americans choose independent work. As that number continues to grow, we need to make sure independent workers that need benefits are given the necessary protections they deserve.

Unfortunately, America’s social safety net hasn’t kept up with the growth of independent work. Because benefits are often tied to traditional full-time work, some workers may still lack benefits like health insurance, retirement, paid sick leave, and workers’ compensation. Many app-based platforms want to and do provide benefits to independent workers, but the problem is that app-based workers often work with multiple platforms at a time and there’s no way to aggregate the benefits they collect from each platform or carry the benefits with them if they switch gigs.

So, how do we provide critical benefits to those who need them while maintaining the independence and flexibility that workers want?

The answer: a portable benefits system.

A portable benefits system - which has support from industry and labor organizations alike - is one in which benefits are connected to the worker instead of a particular company. In this system, benefits would travel with workers, protecting their flexibility and independence while giving them coverage if they need it.

According to the Aspen Institute, portable benefits can improve individual and household financial security, create more equity between traditional and non-traditional workers, and fuel a more dynamic labor market.

Though some independent workers get benefits through their families or other jobs, many others are left without protections because they can’t afford to pay the exorbitant costs of benefits out-of-pocket. Portable benefits would help close this coverage gap for the many independent workers who need benefits, but for those workers who like their current benefits, nothing would have to change.

For portable benefits to become a reality, however, lawmakers must develop a model that recognizes the critical need to keep up with changing realities of work, rather than rehashing antiquated debates about worker classification. Establishing benefits, determining who will be eligible, how benefits will be funded, and who will administer them, must come arm-in-arm with a recognition that the labor economy is fundamentally changing.

Portable benefits have the potential to unlock a wide array of safety net protections for independent workers, helping to give them a stable future in the work they love. With portable benefits, workers wouldn’t have to worry that an accident or a medical emergency would mean bankruptcy. They could set up accounts to save for retirement or college funds for their children.

App-based platforms and independent workers have modernized and redefined what it means to be part of the workforce. Lawmakers at both the state and federal level must approach the idea of a portable benefits system with this same innovative mindset.

Whatever system policymakers propose, the fact is that it’s time to replace the old, antiquated ideas of benefits with the new implementation of a portable benefits system that keeps pace with our rapidly changing workforce. Portable benefits will set independent workers up for success and will allow them to continue pursuing the flexible work they love with the benefits they need.