by Liz Wolgemuth
(c) David Horsey
The job mobility of most workers shrinks in a recession, but for as many as 25 percent of workers, the freedom to move between jobs can be missing in high times, too.
This is the working-world phenomenon known as job-lock -- when workers won't leave their jobs because they can't afford to lose their healthcare benefits.
Some analyses suggest that healthcare reform could free up millions of job-locked workers to chase something new.
Most workers -- about 60 percent -- get their health insurance through their employers, and as health premiums have spiraled,
those benefits have become highly valuable to most. Nearly a quarter of top-performing employees said healthcare benefits were one
of the top three reasons they would leave an employer, and two thirds said healthcare benefits were an important reason to stay with
a company, according to a 2006
Last year, 78 percent of finance and accounting workers surveyed by the
The value of staying with the same employer -- and the same health plan -- goes beyond cost.
Job-lock is most common among people with pre-existing conditions, as they may not be able to get coverage of those conditions
in a new plan. Workers in job-lock are unwilling to leave their existing jobs even when they would be more productive in a different
position. Loyalty to doctors may prevent some workers from switching jobs and changing plans, according to a report by health
It's safe to assume that if health reform legislation prevents insurers from refusing coverage based on pre-existing conditions,
"then those people who feel locked into their jobs because they're afraid they'll lose their benefits based on a pre-existing
condition will leave," says
Healthcare coverage tends to be less of an issue for young workers and more of an issue for parents and older workers.
"My guess is that what you'd really see, if you made healthcare less the preserve of larger employers, is you'd get more of those people able to leave," he says.
Most workers simply want jobs with healthcare coverage -- even if they have to switch plans -- and virtually all large employers
already offer benefits to most of their workers. While it's still unclear what precise shape healthcare reform will take, existing
bills in the House and
Small businesses pay as much as 18 percent more than large firms for the same health insurance policy, according to a report by the
The bottom line: "Small firms are likely to be at a competitive disadvantage in the market for hiring workers," according to the council's report.
"Small firms are likely to have a more difficult time than larger firms recruiting potential employees who do not have health insurance from another source. Even if a small firm provides the best fit for a worker's skills and interests, the individual may choose not to work there, given the implicit tax."
Similarly, reform could require a new strategy for companies that offer middle-market pay but make themselves competitive through benefits. Much will still depend, however, on how broader coverage is paid for, he notes.
When it comes to entrepreneurship and whether the ranks of the self-employed will boom with healthcare reform, the question will be
one of affordability -- a quality that is largely in the eye of the beholder, says
"Unless it's free, there are going to be individuals who are not going to be subsidized and are going to believe it's too much a percentage of their income and therefore still unaffordable," Bos says.
There is some debate over the scope of the job-locked population, as the group is difficult to measure. And there is little indication that large employers are worried about a mass exodus.
Indeed, if job-locked workers are motivated to stay with their jobs merely for the health benefits, then employers may benefit when they leave for positions where they will be more productive.
Not Enough Healthcare to Go Around
by Michael D. Tanner
We tend to talk about healthcare in the philosophically abstract. "Is healthcare a right or a privilege?" goes the refrain. In reality, it is neither. Healthcare is a commodity -- and a finite one at that. There are only so many doctors, hospitals, and, most important, money to go around. ...
Healthcare Reform's Effect on You
by Bernadine Healy M.D.
Some elements might change before a final healthcare bill is in hand, but enough common threads have emerged for people to look beyond the headlines for an idea of how the new healthcare system will affect them personally. For starters, consider these seven ways in which your healthcare experience is apt to change ...
Lack of Competition in Healthcare Insurance Market
by Kent Garber
Should healthcare reform include an option for Americans to buy insurance from the government? President Obama has made it a priority, arguing that a government plan would make the insurance market more competitive and help lower costs. Republicans aggressively oppose this, asserting that a public plan would all but destroy the private market.
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Will Health Reform Free Workers From 'Job-Lock'?: A look at how healthcare reform will change employee benefits
(c) 2009 U.S. News & World Report