Independent contractors can use accounts to fund benefit plans

Independent contractors may open accounts to fund benefit plans, and people or businesses may contribute to those accounts. An independent contractor opens the account, which a provider administers for a beneficiary. The account may fund benefit plans, including plans for health, insurance, or retirement benefits. Contributions are voluntary. The account provisions take effect July 1, 2026.

Hiring parties may contribute their own funds or withhold an agreed share of a contractor’s compensation for an account. These rules apply when a hiring party contributes its own funds or withholds part of compensation owed to an independent contractor. A contractor must agree in writing to any withholding, and the agreement must be clear and prominently shown in a work contract or separate agreement. Withholding may start only after the contractor opts in; the contractor may opt out at any time. A hiring party may opt out with at least 60 days’ notice to the contractor. The account provisions take effect July 1, 2026. A hiring party that opts out must give the contractor at least 60 days’ notice.

A contribution to a portable benefit account cannot be used as a factor in deciding a person’s employment classification. The rule applies when deciding a person’s employment classification, including whether the person is an employee or an independent contractor. This rule takes effect July 1, 2026.