For millions of Americans, leaving a job is not simply a career decision. It is a healthcare decision.
A recent West Health-Gallup survey found that 24% of U.S. workers would like to leave their current job but remain primarily because they do not want to lose their health insurance benefits. That is nearly one in four workers — roughly 23 million adults — staying in a position they may no longer enjoy because they are afraid of what could happen to their coverage.
It is also getting worse. In 2021, that figure was 16%. It has climbed eight percentage points in five years.
This situation is often referred to as "job lock."
Job lock happens when someone feels financially or medically tied to an employer because of health insurance. They may want to change careers, start a business, become self-employed or reduce their working hours, but the fear of losing coverage keeps them from making the move.
Notice who it hits hardest. The people most likely to feel stuck are the ones who use their insurance most — 41% of workers with a chronic condition report job lock. The coverage that makes leaving frightening is the same coverage that makes it necessary.
Health insurance can become a barrier to entrepreneurship
Starting a business already requires courage.
You have to think about income, customers, marketing, taxes, equipment and operating expenses. Health insurance can become another major concern, especially when an employer has been paying part of the monthly premium.
Many aspiring entrepreneurs assume that leaving their job means they will have to choose between extremely expensive coverage and going uninsured.
That assumption causes some people to delay their business plans for years. Others remain in jobs that negatively affect their happiness, motivation or overall quality of life because they believe employer-sponsored insurance is their only realistic option.
The truth is that leaving an employer does not automatically mean losing access to health coverage. It does mean that the person must become more intentional about how they evaluate their options.
Employer coverage is not always as affordable as it appears
Employer-sponsored insurance often feels affordable because employees typically do not see the full cost of the plan.
The employer may pay a portion of the premium, while the employee's contribution is deducted directly from each paycheck. Once someone leaves that job, they may become eligible for COBRA — but COBRA can require the former employee to pay the entire premium, along with an administrative fee.
That increase can be surprising. A plan that felt manageable while employed may suddenly become one of the person's largest monthly expenses.
This is why it is important to understand the actual cost of your coverage before leaving a job. You should know how much your employer contributes, what COBRA would cost, how much your deductible is and what you could owe if you need significant medical care.
The monthly premium is only one part of the equation.
Self-employed workers have more than one path
Health insurance for self-employed individuals is not a one-size-fits-all decision.
Depending on someone's income, location, household size, health needs and eligibility, they may be able to evaluate several different coverage routes.
Some people may qualify for financial assistance through the Affordable Care Act Marketplace. Others may need to compare Marketplace coverage with private options, a spouse's employer plan, COBRA or a small-business benefits strategy.
The right option for one entrepreneur may be completely wrong for another.
For example, someone with ongoing medical conditions or expensive prescriptions may prioritize guaranteed coverage and predictable benefits. A healthy self-employed person may be more focused on network access, deductibles and overall monthly cost.
That is why health insurance should be reviewed based on the complete situation, rather than choosing whichever plan has the lowest advertised premium.
Do not wait until after you resign
One of the biggest mistakes people make is waiting until after they leave their job to investigate health insurance.
Coverage decisions should be part of the transition plan.
Before you submit a resignation, know:
- ✓When your employer coverage will officially end
- ✓Whether COBRA will be available, and what it will actually cost each month
- ✓Whether losing employer coverage creates a special enrollment opportunity
- ✓What doctors, hospitals and prescriptions need to be covered
- ✓How your expected self-employment income may affect Marketplace eligibility
- ✓What your maximum financial exposure could be under each option
Having this information before leaving a job can reduce uncertainty and help prevent a gap in coverage.
One timing note that catches people: losing employer coverage generally opens a Special Enrollment Period, but it runs on a deadline. That window is one of the main reasons to work the numbers out before you give notice rather than after — not because the options disappear, but because rushing the decision is how people end up on the wrong plan.
Your career should not be controlled by fear
Health insurance is important, but it should not automatically prevent someone from pursuing a better career, building a company or becoming self-employed.
People should not have to remain in jobs they dislike simply because they are afraid they will not be able to find coverage elsewhere.
The solution is not to make a rushed decision or cancel existing insurance without a plan. The solution is to understand the available choices before making the transition.
When you know what coverage could look like, what it may cost and how it fits your medical needs, you can make a more informed decision about your career and your future.