How can mobile benefits pay innovation and job growth

Washington policy makers are looking to update labor laws, and some Democrats and Republicans find a common ground. Members of both parties agree on the need to support the workforce that works for their own account through portable advantages-those who are associated with an individual instead of the employer.

In fact, two weeks ago, Representative Kevin Kalif submitted a draft law that legitimizes the flow of benefits to all workers, even those who follow traditional employment arrangements, W-2. Republicans, including Senate, Education, Employment, and pensions, Bill Cassidy (R.), Democrats, including Senator Mark Warner (D-VA), and MP Susan Delepine (D-WASH) support for similar ideas.

Although the primary goal is to help independents and workers in the party, the portable benefits have a sudden possibility to enhance entrepreneurship and thus the American economy.

From small brick and mortar companies to high -growth -growing startups, entrepreneurs pay jobs, economic dynamics, and technological progress. However, the benefits in our country are largely linked to the employment of W-2, for many ambitious founders, the launch of the company can mean losing basic benefits such as health care.

When promising entrepreneurs are discouraged from following up their projects – in choosing to stay in traditional workers as benefits provide a decisive layer of financial security – the rest of us lose future job opportunities, or products that make us in a better position, or other useful economic activities.

This challenge is not proportional to potential entrepreneurs who are already facing regular barriers such as limited assets, student loan debts or care responsibilities. One of the parents who think about starting a business may be hesitant to leave a fixed job if that means the loss of health insurance sponsored by the employer and which covers the medical needs of the child.

This is often called “entrepreneurship”-the position in which workers will follow entrepreneurship, but because of their dependence on the benefits offered by the employer, especially health insurance.

In fact, one study found that workers who receive health insurance through their employers, especially those who do not get the advantages of the husband, are less likely to leave their jobs to start a company. The authors conclude that America’s confirmation of the health insurance provided by the employer at the expense of other models is an obstacle to the creation of business.

A representative survey at the national level conducted in the summer of 2020 strengthens this point. Among those who seriously thought about starting a business, but in the end they did not do so, 20 percent indicated the need for health insurance provided by the employer as a main factor.

In addition, a series of round table interviews in Kauffman and an engine with entrepreneurs indicated that access to health care and other advantages is a special concern for women, colors and other founders of active representatives, some of which discourage a fixed work to establish new projects.

Portable benefits provide a practical solution because they follow individuals while they move between jobs and projects.

The first step towards the portable benefits is to give legitimacy to the benefits of workers working for their own account by simply indicating that no federal agency can use benefits to determine whether the worker is considered “working for their own account” or “employee”. This is what Kelly’s bill will do.

After that, policymakers must give workers to their own account the same tax advantages as traditional employees, including the ability to develop “cafeteria” plans similar to those allowed under Article 125 of the Tax Law.

This would allow project owners to deduct contributions to the flexible benefits accounts of self-employment taxes, which is a similar privilege for contributions that are currently limited to W-2 staff (based on how to impose taxis taxes). These boxes can be used in major expenses such as retirement savings, health care, life and deficit insurance, children’s care, and more, and to ensure increased financial security for potential project owners.

Finally, Congress can make many changes to health care benefits to increase access to entrepreneurs, such as relaxation restrictions on healthy savings accounts (HSAS). As only one example of these restrictions, at the present time, HSA funds cannot be used to pay health insurance premiums except under specific conditions such as unemployment.

Allowing distinguished payments in light of a wide range of conditions will provide great financial relief to project owners who lack the plans sponsored by the employer. Allowing HSA contributions to be exempt from taxes for both federal income taxes and self-employment taxes-another distinction is currently limited to traditional workers from W-2 through salary statements-they would make these reforms more powerful.

PIPARTISAN POUH for Portable Feeds offers a unique opportunity to support independent workers and entrepreneurship in the United States. By breaking the “Entrepreneurship Lock”, these reforms can remove barriers that prevent the formation of business and stimulate job growth – a positive development that would lead to the establishment of more Americans their own business.

Liya Palagashvili is an older research colleague at the Merctus Center at George Mason University and author of “” “Flexible benefits for flexible working forcesAnd the co -author (with Jonathan Wolfson) fromFlexible and mobile benefits for independent workers: Federal Policy Guide.“