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SB 1276 Virginia Senate · 2025 Regular Session

Labor and employment; portable benefit accounts, income tax, deduction.

Summary
Labor and employment; portable benefit accounts; income tax; deduction. Authorizes a Virginia resident who has worked as an independent contractor to establish a portable benefit account. Under the bill, a portable benefit account offered through and administered by a bank, credit union, or other depository institution and distributions from the account may be used for the payment of various health-related costs. The bill also creates a temporary deduction for the amount of contributions made to a portable benefit account by an independent contractor for the 2025 and 2026 taxable years.
Issues: ✓ Budget & TaxesSupports Budget & TaxesCreates a temporary income tax deduction for contributions to portable benefit accounts, providing tax relief for independent contractors.90% confidence ✓ HealthcareSupports HealthcareBill explicitly allows portable benefit account distributions for health-related costs, expanding access to healthcare expenses for independent contractors.90% confidence ✓ Labor & EmploymentSupports Labor & EmploymentEnables independent contractors to establish portable health benefit accounts with tax deductions, expanding access to workplace benefits for non-traditional workers.85% confidence
Bill status in committee 1 of 4 stages cleared
Introduction
Jan 2025
Committee Review
Floor Vote
Governor
Introduced Jan 8, 2025 Last action Feb 5, 2025
Maddy AI version diff · 1 comparison

What changed between versions

Introduced → Commerce and Labor Substitute · 6 edits
MODERATE
The bill was amended to expand the scope of portable benefit accounts beyond just health-related benefits to include income replacement, life insurance, and retirement benefits. It also added provisions allowing employers or hiring parties to voluntarily contribute to these accounts and clarified that contributions cannot be used to determine a worker's employment classification status.
Scope change
The bill's scope expanded from covering only health-related expenses to include broader financial benefits, and it now permits third-party contributions from employers or hiring parties.
DEFINITION

The definition of a portable benefit account was expanded to include income replacement insurance, life insurance, and retirement benefits in addition to health-related costs and prescription drugs.

Added a new definition for 'portable benefit account provider' to include banks, investment management firms, and technology providers or program managers.

FISCAL

Added provisions allowing public or private entities, including internet or application-based companies, to voluntarily contribute funds to portable benefit accounts as compensation for independent contractors.

REQUIREMENT

Added requirements that any contributions using withheld funds must be expressly agreed to in writing, clearly displayed, voluntary with opt-in capability, and allow workers to opt out at any time.

ENFORCEMENT

Added a provision stating that contributions to portable benefit accounts cannot be used as a criterion for determining a worker's employment classification status.

ELIGIBILITY

Changed the eligibility timeframe from 'current tax year' to 'current calendar year' for individuals who may open and contribute to portable benefit accounts.

Floor votes

How they voted

No floor votes recorded yet.
Full legislative history

Actions timeline

Total actions
6
Key actions
1
Committee
2
Jan 20, 2025
Upper · Passed
Reported from Commerce and Labor with substitute and rereferred to Finance and Appropriations (14-Y 0-N 1-A)
upper
Jan 8, 2025
Committee
Referred to Committee on Commerce and Labor
upper
1 primary · 0 co-sponsors

Sponsors

Role
Legislator
Party
State
District
P
Photo of Bill DeSteph
Bill DeSteph
RRepublican
VA
20