America’s workforce is changing, and state lawmakers are starting to catch up.
Across the country, millions of Americans are choosing to work independently in self-employment pathways. Whether to earn money on the side, build an independent career, or start a small business as an entrepreneur, they value flexibility, autonomy, and the ability to earn on their own terms. But for too long, outdated labor laws have forced a false choice: flexibility or access to affordable, competitive benefits.
That’s beginning to change.
In 2026, five more states—Wyoming, Idaho, Georgia, Kansas, and West Virginia—have already taken decisive steps to modernize benefits policy by advancing voluntary portable benefits reforms through their legislatures, with more states likely to follow. These reforms remove longstanding barriers that have prevented self-employed workers from accessing benefits, including allowing new pathways for business to contribute to worker-controlled accounts and benefits, while preserving the freedom and flexibility those workers value.
This is a win for workers, entrepreneurs, and innovation.
Portable benefits flip the traditional benefits model on its head. Instead of being tied to a single employer or a rigid 9to5 job, benefits are tied to workers. Independent contractors can receive voluntary contributions—from multiple sources including themselves—into worker-owned accounts they control and carry with them from job to job.
As labor economist Liya Palagashvili explains in Labor Market Matters, portable benefits are no longer a niche idea. They are quickly becoming a nationwide policy movement as states recognize that modern work arrangements require modern policy solutions. When lawmakers remove legal obstacles instead of imposing mandates, markets can respond to the benefit of workers.
Building on earlier successes, 2026 has marked a major expansion of voluntary portable benefits across the states, with these five states so far set to enact new laws that break down barriers:
These 2026 wins didn’t happen overnight. They build on successful reforms enacted in recent years by states willing to lead. Utah (2023), Tennessee (2025) and Alabama (2025) helped pave the way to increasing momentum and interest across the United States to remove harmful barriers in bipartisan fashion.
The momentum behind portable benefits reflects the strength of a growing network of organizations and leaders committed to modernizing workforce policy. Americans for Prosperity has worked in conjunction with a diverse range of state and national organizations including the Mercatus Center, Libertas Institute, Institute for the American Worker, Independent Women, R Street Institute, and more from state to state. With research, data, examples of those who would benefit, and a dose of optimism, the educational outreach to highlight how beneficial these reforms are to American families has created a surge of interest among state lawmakers who increasingly understand this golden opportunity to help their residents thrive in today’s economy including shifts due to the rise of AI and other technology.
Importantly, the success of these state reforms is beginning to shape the conversation in Washington as well. Building on lessons from the states, Senator Bill Cassidy has introduced federal legislation—including S. 2210, the Unlocking Benefits for Independent Workers Act—to create a clear safe harbor for companies to voluntarily offer benefits to independent workers without triggering misclassification, thereby expanding access to retirement, health and other benefits coverage.
In the U.S. House, Representative Kevin Kiley has introduced H.R. 1320, the Modern Worker Security Act, which would similarly remove federal barriers that prevent businesses from offering voluntary benefits to independent contractors. Together, these proposals show how state leadership is fueling a growing federal effort to modernize benefits policy for today’s workforce.
The rise of portable benefits removes barriers to innovation and access, allowing workers and businesses to create better relationships for everyone. As more lawmakers at both the state and federal level embrace this approach, millions of Americans will gain access to affordable benefits without sacrificing the flexibility that drew them to independent work in the first place.
Austen Bannan is an Employment Policy Fellow at Americans for Prosperity.
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