Portability

What is portability?

Portability is the ability to switch insurers seamlessly without pre-existing condition exclusions.

Deeper definition

While portability has an important meaning in finance terms, there are multiple other uses for this fairly common word. Other definitions include:

  • Something that has the quality of being portable.
  • A plan where union members can shift their pension rights between employers who have negotiated the right with the union.

In technology, portability has yet another meaning, referring to the measure of how simply an application can be transferred from one computer to another. An application is considered to be portable if the transfer from one unit to another is within a reasonable limit of difficulty.

In all of its definitions, portability generally refers to some type of reusability. For small items that can be transferred from place to place, portability eliminates the need to have multiple copies of the same item in one place and another.

For benefits, including health insurance and pension plans, employees receive protection for their health plans when switching from employer to employer or retiring. The Health Insurance Portability and Accountability Act of 1996 (HIPPA) protects members in certain group plans.

HIPPA can be essential for members who have certain pre-existing conditions, as it ensures that they will maintain coverage, even when a new plan may not offer matching benefits for those members. The intention of this protection is to eliminate discrimination against otherwise uninsurable members.

Portability example

If you have a union job, you may be able to transfer your pension plans and some benefits from employer to employer who have negotiated plans with your union.

This protects your investments and gives you the opportunity to make the move, without much difficulty in transferring benefits. This is an example of how portability helps individuals to easily move their benefits to suit a job switch or cross-country move.

For older individuals who are retiring and have continuing health issues, portability means that their health coverage from their job will continue when they retire. This eliminates the need for them to find another plan that may require higher premiums or deny coverage for their pre-existing condition.

Need to learn more about your insurance options? Check this fact list about your coverage choices.

 

 

 

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