Coping with Job Lock

When you're unable to take a new job because your new employer's insurer refuses to cover certain preexisting conditions, including cancer, that's called "job lock." It reduces your job mobility and may limit your income potential.

Many people once found themselves in that predicament if they, or someone in their family, was in cancer treatment. One study of Indiana workers who had health insurance through their employers found that chronic illness reduced their job mobility by about 40 percent.

Yet you may be more fearful about job lock than is warranted. In 1997, the federal Health Insurance Portability and Accountability Act (HIPAA) was passed. It limits the exclusions for preexisting conditions. As a result, if you are in a group health plan now and are moving to a job that has coverage with another group health plan, the new insurer cannot refuse you coverage because of cancer or other preexisting conditions. This often requires that you have little or no gap in coverage, such as being uninsured for 63 days or more.

Job lock protection under HIPAA covers group health plans in every U.S. state, but each state interprets the law differently. Some will allow a "group of one" category.

Plan carefully before switching jobs:

• Contact your state's health insurance assistance program to make sure that you won't be left uncovered.
• Ask your current employer for a "certificate of creditable coverage" to verify that the group plan is covered under HIPAA.
• If you're leaving to become self-employed, you may have to meet special criteria to retain coverage.
• Haven't decided what you want to do? Make sure you have COBRA, or some sort of continuation coverage, to keep your HIPAA protection against preexisting condition clauses.