In the U.S. benefits and protections such as workers compensation, unemployment insurance, paid time off, retirement savings, health insurance and other benefits and protections are largely delivered through a person's employer.
This approach obviously doesn't work well for those who are self-employed. Nor does it work well for gig economy workers like Uber drivers. This, coupled with the growth of the independent workforce and gig economy, is leading to more and more people believing these types of benefits should be portable and detached from employment.
And it's becoming increasingly clear that portable benefits in some form will likely become a reality in the next couple of years.
As we discussed last year, in general pretty much everyone is in favor of portable benefits. The bad news is pretty much everyone has a different idea around what benefits should be made portable - and more importantly - what benefits shouldn't be portable.
There's also a lot of thorny implementation problems due to the incredibly complex and differing state and federal laws related to benefits, employment and tax collection. This makes doing anything in this area challenging at best.
But despite these problems the momentum behind portable benefits is clearly growing. Some recent examples include:
Clinton Campaign Endorses Portable Benefits: Democrats have, in general, been less supportive of the gig economy than Republicans (with Va. Senator Warner being an obvious exception). So it's a bit surprising that the Clinton campaign has come out in support of portable benefits (and the gig economy). Key quote from their website:
Hillary believes that as our economy changes and more Americans take advantage of new work opportunities, the government must do all that it can to ensure that benefits are flexible, portable, and comprehensive.
Whether or not she is the next president, this shows the Democratic party is open to and even supportive of portable benefits. This was not so clear several months ago.
Broader recognition of the need for benefit portability: Most of the discussion around portable benefits have focused on Uber drivers. But there is a growing realization that portable benefits can be good for most everyone, even including those with a traditional job.
For example, EducationNext's Why Teachers Need Portable Benefits explains why the lack of retirement plan portability hurts teachers. The group this article is discussing are traditional employees who, in general, plan to stay traditional employees.
Recognition that the lack of benefits portability hurts not just Uber drivers, but also those with traditional jobs will lead to greater levels of political consensus in favor of making benefits portable.
The private sector is already starting to provide portable benefits: We're seeing multiple examples of private firms offering services that make benefits portable. Emergent Research client MBO Partners is a good example. Their services include a wide range of benefits independent workers can take from job to job.
Another example comes from the OnForce, an online talent marketplace for service professionals. They provide a mix of insurance coverage for independent workers who do work via their platform.
There are literally dozens of companies providing portable benefits for independent workers. These services show the viability of portable benefits and also provide examples that can be used to spur government action in this area.
The shift to portable benefits has already started. Examples included the ACA (Obamacare) and the shift to 401ks and IRA's for retirement accounts. Both detach these benefits from employers and allow workers to take them with them regardless of where and how they work.
Don't expect any legislative changes this year due to the presidential elections. But 2017 will likely be the year we see new laws in this area. It's an off year in terms of the national election cycle and both parties are likely going to want to show they can actually do something.
For more information on portable benefits, see the Aspen Institute report Portable Benefits in the 21st Century.
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