Insurance, Health, Accident - As enacted, enacts the "Voluntary Portable Benefit Plan Act"; makes related changes. - Amends TCA Title 50 and Title 65, Chapter 15, Part 3. SB1377 has been assigned Public Chapter Number 13, the official text

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Staie ef J ettnessee

PUBLIC CHAPTER NO. 131

                                                    SENATE BILL NO. 1377

                    By Watson, Yager, Stevens, Bailey, Massey, Lowe, Reeves, Taylor

                                             Substituted for: House Bill No. 494

By Baum, Terry, Sparks, Fritts, Rudd, Helton-Haynes, Stevens, Burkhart, Eldridge, Cepicky, Lafferty

AN ACT to amend Tennessee Code Annotated, Title 50 and Title 65, Chapter 15, Part 3, relative to
          employer-employee relationships.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF TENNESSEE:

          SECTION 1. Tennessee Code Annotated, Title 50, Chapter 1, is amended by adding the
following as a new part:

          50-1-1101.

                    This part is known and may be cited as the "Voluntary Portable Benefit Act."

          50-1-1102.

                    As used in this part:

                               (1) "Benefit plan" includes:

                                         (A) Health insurance;

                                         (8) Income replacement insurance;

                                         (C) Life insurance;

                                         (D) Retirement benefits; and

                                         (E) Other benefits that may customarily be provided as part of a benefit
                               plan;

                               (2) "Employee" means an individual who performs services for an employer for
                    wages, and the services performed by the individual qualify as an employer-employee
                     relationship with the employer based upon consideration of the twenty-factor test
                    described in§ 50-2-111';

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

                               (4) "Independent contractor" means an individual who performs services for a
                     hiring party in exchange for compensation, and the relationship with the hiring party
                     qualifies the individual as an independent contractor based upon consideration of the
                    twenty-factor test described in § 50-2-111;

                               (5) "Portable benefit account" means an account opened by an independent
                     contractor to fund the purchase of one (1) or more benefit plans and that is administered
                     by a third-party portable benefit account provider chosen by the independent contractor
                     and assigned to a beneficiary of one (1) or more benefit plans rather than a hiring party;
                     and
SB 1377

                             (6) "Portable benefit account provider" means a bank, as defined in Section
                   3(a)(1) of the Federal Deposit Insurance Act (12 U.S.C. § 1813(a)(1 )); an investment
                   management firm; or a technology provider or program manager that offers services
                   through a bank or investment management firm.
          50-1-1103.
                   (a) An individual or entity, including a hiring party, whether public or private, an
          independent contractor, or an internet or application-based company, may voluntarily
          contribute funds to a portable benefit account for an independent contractor.
                   (b) Contributions to a portable benefit account must not be used as a criterion for
          determining a worker's employment classification under this title, or title 65, chapter 15.
                   (c) Contributions to a portable benefit account may be made using the funds of a
          hiring party or a percentage of funds withheld from the compensation owed to an
          independent contractor, as long as:

                             (1) Withholding such compensation is expressed in a written agreement;
                             (2) Such written agreement is clear, unambiguous, and prominently displayed
                    either in the work contract or a separate notice;
                             (3) Such withholdings are voluntary and require the independent contractor to
                    opt-in; and
                             (4) The independent contractor may choose to opt-out of such withholdings at
                    any time.
          SECTION 2. Tennessee Code Annotated, Section 50-8-101 (1 )(8), is amended by deleting
the language "In return for compensation from the third-party or marketplace platform, offers" and
substituting "In return for compensation from the third-party or marketplace platform, including
compensation in the form of a contribution to a portable benefit account as described in§ 50-1-1103,
offers".
          SECTION 3. Tennessee Code Annotated, Section 50-8-102(a)(9), is amended by deleting
the language "marketplace platform provides no medical or other insurance benefits to the
marketplace contractor, and the".
          SECTION 4. Tennessee Code Annotated, Section 65-15-301(4), is amended by deleting the
language "control, direct, or manage the personal vehicles" and substituting "control, direct, or
manage, as the applicability of such terms are understood pursuant to § 50-2-111, the personal
vehicles".
          SECTION 5. This act takes effect upon becoming a law, the public welfare requiring it.

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         SENATE BILL NO. 1377

PASSED:  March 20, 2025

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                                                 ™ RANOV McNALLY
                         '

                                        SPEAKER OF THE SENATE

                            CAMER8tlt'!EXTON,SPEAKER

                            HOUSE OF REPRESENTATIVES

~r' [J, APPROVED this ___ day otp(II )           2025

         H+u lu~
                             BILL LEE, GOVERNOR