Employer-Provided Health Insurance and Job Change

Employers are the major providers of health insurance in the United States. As a result, individuals who lose their jobs may also lose their health insurance and those who would prefer a different job may not change in order to keep health insurance coverage, an effect termed "job lock." Targeted federal legislation may have reduced job lock. The Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) requires employers to offer former employees the option to purchase the employer-provided health insurance plan for 18 months after termination. The Health Insurance Portability and Accountability Act of 1996 (HIPAA) requires insurers to renew COBRA-based coverage beyond the COBRA eligibility period. Previous research examining job lock has had mixed results. The authors used data from the March 1998-March 2000 Current Population Survey (an annual survey of 52,000 households) to re-examine the link between employer-provided health insurance and job change. The large sample size allowed a controlled quasi-experiment that focused on working married men with employer-provided health insurance and working spouses. The analysis measured job mobility as a change from one industry to another. The findings indicate a significant level of job lock among married men. While estimates are similar to those from previous research, the authors believe the study design and sample size resulted in more precise results. They conclude that public policy efforts to increase health insurance portability and reduce job lock address a real problem.