SB336 - Establishes provisions relating to portable benefit accounts. (BDR 53-621)

(Reprinted with amendments adopted on April 21, 2025) FIRST REPRINT S.B. 336 - *SB336_R1* SENATE BILL NO. 336–SENATOR ROGICH MARCH 12, 2025 ____________ Referred to Committee on Commerce and Labor SUMMARY—Establishes provisions relating to portable benefit accounts. (BDR 53-621) FISCAL NOTE: Effect on Local Government: No. Effect on the State: No. ~ EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted. AN ACT relating to compensation; authorizing a sole proprietor or independent contractor to open a portable benefit account under certain circumstances; authorizing certain contributions to and disbursements from a portable benefit account under certain circumstances; setting forth certain restrictions on the consideration by the Labor Commissioner of a contribution to a portable benefit account in determining whether the holder of the account should be classified as an employee; and providing other matters properly relating thereto. Legislative Counsel’s Digest: Section 2 of this bill authorizes a natural person who is a sole proprietor or an 1 independent contractor to open and contribute to a portable benefit account, under 2 certain circumstances, which may be used for the benefit of the account holder or a 3 spouse, domestic partner, child or other dependent of the account holder. Section 3 4 of this bill authorizes the money in a portable benefit account to be used for the 5 payment of costs for: (1) maintaining health insurance coverage; (2) coverage for or 6 the purchase of prescription drugs; (3) any agreement or arrangement for the 7 payment of medical expenses; (4) other out-of-pocket medical expenses; or (5) 8 other benefits, including income replacement insurance, life insurance or an 9 individual retirement account. 10 Section 4 of this bill authorizes a person who contracts for the services of a sole 11 proprietor or an independent contractor to contribute money to a portable benefit 12 account which is held by the sole proprietor or independent contractor. Section 4 13 authorizes, under certain circumstances, such a contribution to be based on 14 withholding a percentage of payment otherwise owed to the sole proprietor or 15 independent contractor. 16 Existing law requires the Labor Commissioner, the Attorney General and 17 certain state agencies to share certain information relating to suspected or actual 18 – 2 – - *SB336_R1* employee misclassification. (NRS 607.217) Existing law also authorizes the Labor 19 Commissioner to impose various administrative penalties against an employer who 20 misclassifies a person as an independent contractor or otherwise fails to properly 21 classify a person as an employee. (NRS 608.400, 608.410) Section 4 provides that 22 the fact that a contribution is made to a portable benefit account is, in and of itself, 23 insufficient to support any determination by the Labor Commissioner as to whether 24 or not the holder of the account should be classified as an employee. If the Labor 25 Commissioner considers such a contribution in any proceeding or determination 26 relating to the classification of the holder of the account, section 4 requires the 27 Labor Commissioner to make at least three additional findings of fact in support of 28 any determination that a person was not properly classified. 29 THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS: Section 1. Chapter 608 of NRS is hereby amended by adding 1 thereto the provisions set forth as sections 2, 3 and 4 of this act. 2 Sec. 2. 1. A natural person who is a resident of this State 3 may open a portable benefit account if the person works as a sole 4 proprietor or an independent contractor during the calendar year 5 in which the person opens the account. 6 2. The holder of a portable benefit account may make 7 contributions to the portable benefit account during any calendar 8 year in which the holder works as a sole proprietor or independent 9 contractor. 10 3. Distributions from a portable benefit account that are 11 made in compliance with the requirements of section 3 of this act 12 may be used for the benefit of the holder of the account or a 13 spouse, domestic partner, child or other dependent of the holder of 14 the account. 15 4. As used in this section, “portable benefit account” means 16 an account that meets the requirements of section 3 of this act. 17 Sec. 3. 1. A portable benefit account must be offered 18 through and administered by a bank, credit union, investment 19 manager or other provider or program that offers services through 20 a bank, credit union or investment manager. 21 2. Distributions from a portable benefit account may only be 22 made for the: 23 (a) Payment of costs relating to: 24 (1) Maintaining health insurance coverage, including, 25 without limitation, premiums, copays, deductibles or coinsurance; 26 (2) Coverage for or the purchase of prescription drugs; 27 (3) Any agreement or arrangement for the payment of 28 medical expenses; or 29 (4) Other out-of-pocket medical expenses; or 30 – 3 – - *SB336_R1* (b) Payment of costs relating to or an investment in other 1 benefits, including, without limitation, income replacement 2 insurance, life insurance or an individual retirement account. 3 3. As used in this section: 4 (a) “Bank” has the meaning ascribed to it in NRS 657.016. 5 (b) “Credit union” has the meaning ascribed to it in 6 NRS 672.070. 7 Sec. 4. 1. A person who contracts for the services of a sole 8 proprietor or an independent contractor may contribute money to 9 a portable benefit account which is held by the sole proprietor or 10 independent contractor. 11 2. A contribution made pursuant to subsection 1 may be 12 based on withholding a percentage of payment otherwise owed to 13 the sole proprietor or independent contractor, if: 14 (a) In the contract for services or a notice accompanying the 15 contract, an explanation of the optional withholding is clear, 16 unambiguous and prominently displayed; 17 (b) The contract for services or a notice accompanying the 18 contract requires the sole proprietor or independent contractor to 19 indicate his or her intention to opt in or opt out of the 20 withholding; 21 (c) The sole proprietor or independent contractor expressly 22 agrees in writing to opt in to the withholding; and 23 (d) The sole proprietor or independent contractor has the right 24 to opt out of the withholding at any time without penalty. 25 3. The fact that a contribution is made to a portable benefit 26 account pursuant to this section is, in and of itself, insufficient to 27 support any determination by the Labor Commissioner as to 28 whether or not the holder of the account should be classified as an 29 employee. If the Labor Commissioner considers any such 30 contribution in any proceeding or determination relating to such 31 classification, including, without limitation, pursuant to NRS 32 607.217, 608.0155, 608.400 or 608.410, the Labor Commissioner 33 shall not make a determination that a person was not properly 34 classified unless the Labor Commissioner makes at least three 35 other findings of fact in support of the determination. 36 4. As used in this section, “portable benefit account” means 37 an account that meets the requirements of section 3 of this act. 38 Sec. 5. This act becomes effective on July 1, 2025. 39 H