SF 509 (LSB 2896XS (3) 91)

SENATE FILE 509

BY  TOWNSEND

A BILL FOR

An Act relating to employment status and employment benefits and including applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  NEW SECTION.  85.27A  Continuation of health insurance.
   1.  If an employee is unable to return to work due to an injury for which a claim arises under chapter 10A, subchapter III, this chapter, or chapter 85A or 85B, and if the employer provided the employee with health insurance as of the time the injury occurred, the employer shall continue to provide the employee with health insurance on the same terms for at least six months beginning on the day after the employee leaves employment.
   2.  If the employer does not comply with subsection 1, the employer shall be liable to the employee for reimbursement for any medical costs incurred by the employee that would have been covered by the health insurance required under subsection 1. Any dispute as to the extent or amount of such liability may be referred by the employee or employer to the workers’ compensation commissioner for resolution.
   3.  Each employer shall include the employer’s policies or procedures for compliance with this section in any employment contract, employee handbook, or offer of employment provided by the employer.
   4.  This section applies to employers with fifteen or more employees.
    Sec. 2.  Section 85.61, subsection 12, paragraph a, subparagraph (3), unnumbered paragraph 1, Code 2025, is amended to read as follows:
   A real estate agent who does not provide the services of an independent contractor. For the purposes of this subparagraph, a real estate agent is an independent contractor if the real estate agent meets the definition provided in paragraph “c”, subparagraph (2) or if the real estate agent is licensed by the Iowa real estate commission as a salesperson and both of the following apply:
    Sec. 3.  Section 85.61, subsection 12, paragraph c, subparagraph (2), Code 2025, is amended to read as follows:
   (2)  (a)  An independent contractor.  For purposes of this subparagraph, “independent contractor” means an individual performing work to whom all of the following apply:
   (i)  The individual is free from control or direction by the employer over the performance of the individual’s services.
   (ii)  The individual’s service is either outside the usual course of the business of the employer or is performed outside of all the places of business of the employer.
   (iii)  The individual is customarily engaged in an independently established trade, occupation, profession, or business.
   (b)  For purposes of this definition, an employer shall have the burden to establish that an individual is an independent contractor and not a worker or employee.
    Sec. 4.  Section 85.61, subsection 12, paragraph c, subparagraph (3), subparagraph division (b), unnumbered paragraph 1, Code 2025, is amended to read as follows:
   An owner-operator who, as an individual or partner, or shareholder of a corporate owner-operator, owns a vehicle licensed and registered as a truck, road tractor, or truck tractor by a governmental agency, is an independent contractor if the owner-operator meets the definition provided in subparagraph (2) or while performing services in the operation of the owner-operator’s vehicle if all of the following conditions are substantially present:
    Sec. 5.  Section 91A.2, subsection 3, paragraph c, Code 2025, is amended to read as follows:
   c.  For purposes of this chapter, “employee” does not include an independent contractor as defined in section 85.61, subsection 12, paragraph “c”, subparagraph (2), or as described in section 85.61, subsection 12, paragraph “c”, subparagraph (3).
    Sec. 6.  Section 91D.1, subsection 4, Code 2025, is amended to read as follows:
   4.  For purposes of this chapter, “employee” does not include an independent contractor as defined in section 85.61, subsection 12, paragraph “c”, subparagraph (2), or as described in section 85.61, subsection 12, paragraph “c”, subparagraph (3).
    Sec. 7.  Section 96.1A, subsection 15, Code 2025, is amended to read as follows:
   15.  “Employing unit” means any individual or type of organization, including this state and its political subdivisions, state agencies, boards, commissions, and instrumentalities thereof, any partnership, association, trust, estate, joint stock company, insurance company or corporation, whether domestic or foreign, or the receiver, trustee in bankruptcy, trustee or successor thereof, or the legal representative of a deceased person, which has or subsequent to January 1, 1936, had in its employ one or more individuals performing services for it within this state. All individuals performing services within this state for any employing unit which that maintains two or more separate establishments within this state shall be deemed to be employed by a single employing unit for all the purposes of this chapter. Whenever any employing unit contracts with or has under it any contractor or subcontractor for any work which that is part of its usual trade, occupation, profession, or business, unless the employing unit as well as each such contractor or subcontractor is an employer by reason of subsection 14 or section 96.8, subsection 3, the employing unit shall for all the purposes of this chapter be deemed to employ each individual in the employ of each such contractor or subcontractor for each day during which such individual is engaged in performing such work; except that each such contractor or subcontractor who is an employer by reason of subsection 14 or section 96.8, subsection 3, shall alone be liable for the contributions measured by wages payable to individuals in the contractor’s or subcontractor’s employ, and except that any employing unit who shall become liable for and pay contributions with respect to individuals in the employ of any such contractor or subcontractor who is not an employer by reason of subsection 14 or section 96.8, subsection 3, may recover the same from such contractor or subcontractor, except as any contractor or subcontractor who would in the absence of subsection 14 or section 96.8, subsection 3, be liable to pay said contributions, accepts exclusive liability for said contributions under an agreement with such employer made pursuant to general rules of the department. Each individual employed to perform or to assist in performing the work of any agent or employee of an employing unit shall be deemed to be employed by such employing unit for all the purposes of this chapter, whether such individual was hired or paid directly by such employing unit or by such agent or employee, provided the employing unit had actual or constructive knowledge of such work, and provided, further, that such employment was for a total of not less than eight hours in any one calendar week. An employing unit shall not be deemed to employ an independent contractor as defined in section 85.61, subsection 12, paragraph “c”, subparagraph (2), or as  described in section 85.61, subsection 12, paragraph “c”, subparagraph (3).
    Sec. 8.  APPLICABILITY.  The following applies to injuries occurring on or after the effective date of this Act:
   The section of this Act enacting section 85.27A.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill provides that if an employee is unable to return to work due to an injury for which a claim for workers’ compensation arises, and if the employer provided the employee with health insurance as of the time the injury occurred, the employer must continue to provide the employee with health insurance on the same terms for at least six months beginning on the day after the employee leaves employment. If the employer does not comply, the employer shall be liable to the employee for reimbursement for any medical costs incurred by the employee that would have been covered by the required health insurance. The bill requires each employer to include the employer’s policies or procedures for compliance with these provisions in any employment contract, employee handbook, or offer of employment provided by the employer. These provisions apply to employers with 15 or more employees and to injuries occurring on or after the effective date of the bill.
   The bill defines “independent contractor”, for purposes of workers’ compensation, wage payment collection, minimum wage, and unemployment insurance, as an individual performing work who is free from control or direction by the employer over the performance of the individual’s services, whose service is either outside the usual course of the business of the employer or is performed outside of all the places of business of the employer, and who is customarily engaged in an independently established trade, occupation, profession, or business. For purposes of the definition, an employer shall have the burden to establish that an individual is an independent contractor and not a worker or employee.