Definition of Portability

Portability is a U.S. employee’s legal right to carry certain benefits along with it when leaving the company or switching employers. Through this right, the employee can carry some health insurance and retirement plans with him.


Health insurance benefits are movable through the Health Insurance Portability and Accountability Act of 1996 (HIPAA) which protects the rights of the employee in health insurance plans despite employee switches his employer. Through federal law, Consolidated Omnibus Budget Reconciliation Act (COBRA), the employee can take benefit from his health insurance for a said period even after losing a job.


Person’s IRA flipping happens when a person switches his job and requests the old company to transfer his old retirement account balance to his new company so he may not miss the benefits after his retirement. Employees with 401(k) retirement plans can flip into an IRA or a new company's 401(k).

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