A diagnosis complicates, but no longer prevents, you from changing jobs or even careers. 

Until recently, people with a medical condition who get their health insurance through work have frequently ruled out changing jobs for fear of not being able to get new health insurance, or not being able to get it until after a long waiting period because of what is called a "pre-existing condition exclusion" - as well as a fear of being asked about a health history.

The fear of losing health coverage is no longer a problem because of several federal and state laws:

• The Affordable Care Act ("Obamacare") guarantees the right to obtain heath insurance despite a health condition.
• COBRA permits continuation of group coverage for at least 18 months after leaving a job.
• HIPAA (The Health Insurance Portability and Accountability Act of 1996), HIPAA applies to all employers with 2 or more employees.

In order to assure your benefits continue without a gap:

Step 1. Check when your current employer's benefits end.
Step 2. Look at the extent to which a new employer has benefits and when the new benefits begin.
Step 3. Consider what to do if there is a gap in coverage, including how much it will cost you out-of-pocket, and how to pay those costs.

If you do decide to change jobs, it is advisable to try to keep good relations with your current employer. You may need a reference or, as unlikely as it seems now, decide to return to the employer at some time or even just need a favor.

Questions About A Health History

Thanks to the Americans With Disabilities Act (ADA) and similar state laws, a new employer cannot ask about your health history.

Changing Careers

Changing careers is not something to be done lightly. However, as you will see below, if you do decide to change careers, there are government training programs to help you qualify for a different job, or a different level of the job you already do. To make the most of a retraining program, start by finding a field that is hiring people and is likely to grow. New skills don't do any good if no one is looking for them. 

To learn more, see:

• When You Change Jobs, There Does Not Have to Be a Gap in Your Health Insurance   
• How To Review Benefits From Your Current Employer Before You Agree To Change Jobs  
• Tips About Reviewing A New Employer's Benefits Before You Agree To Change Jobs  
  
• Tips For People With A Health History To Consider Before Changing Careers  
  
• Government Programs To Help Learn New Skills    

Also see: Should I Change Jobs Or Even Careers?; Changing Jobs: Impact On Existing Benefits, Seeking New Employment

Before  changing jobs, take a good, hard look at our current benefits. Look at the following. Also consider what other percs you have from work which you will lose -- such as a company car, or an expense account. (While it may be surprising, you can negotiate to take these items with you even though you are leaving voluntarily. For more information, see Changing Jobs).

• Salary and other compensation. Look at:
  • Unused benefits such as vacation, personal and/or sick days to which you are entitled. Your employee handbook will generally indicate what happens to unused benefits should you leave.
  • Whether your employer offers severance pay to employees to leave voluntarily. Generally such pay is a lump sum payment based on a formula tied to the number of years that you have worked.
• Stock options
  • As a general matter, most stock options end if an employee voluntarily leaves an employer.
  • Check your plan. If there is a profit in the options, perhaps you can exercise them now – before leaving.
• Health, dental, vision and prescription drug coverages
  • Health, dental, vision and prescription drug coverages can probably be continued under COBRA or a similar state law until you become eligible for similar benefits from the new employer. COBRA gives you the right to continue health coverage for at least 18 months, and possibly as long as 36 months -- although you will have to take over paying for it.
  • If COBRA is not available, consider exercising your rights under HIPAA to convert your insurance to individual coverage.
  • If you don't qualify for a conversion under HIPAA because you haven't had 18 months of continuous coverage, then convert the group plan to individual coverage under the conversion privilege under your policy.
  • First look to convert under HIPAA because you will probably receive better coverage than under the limited guaranteed conversion right found in most group health insurance plans.
  • If there is a gap when you can't afford medical coverage, check the terms of your policy to see if it includes an "extension," or provisions that provide an extension even if they don't use the word. Under an extension, any medical condition you had before coverage ends continues to be covered for a period of time after the end of the coverage without any further premium payments. Extensions don't cover new health situations -- only those which were paid for under the policy.
• Group life insurance
  • Group life insurance usually stops when employment ends. However, most contracts permit you to convert this group coverage to an individual policy.
  • This right can be very valuable, particularly if your condition keeps you from obtaining individual life insurance, or you can only obtain life insurance at a price higher than the insurance company charges for a converted policy. The insurance company can tell you how much the premium will be for a converted policy.
  • Keep in mind that in addition to the traditional reasons for having live insurance, there are now new uses, such as Living Benefits and Viatical Settlements. To learn about these uses of life insurance, click here.
• Long term disability insurance
  • Long Term Disability Insurance is rarely convertible to an individual policy. If you leave your current employer who has such a plan, you probably lose the coverage. (Still, it's worth checking.)
  • The loss can be particularly painful if the new employer does not have long term disability coverage, or has a long period during which you must be employed before it starts, or precludes coverage all together for people with pre-existing health conditions.
  • There is no law which prevents an employer from imposing pre-existing health condition exclusions in long term disability policies.
• Retirement Plans Such As A 401(k) Plan
  • Outstanding Loans
    • If you quit or lose your job, you'll almost certainly have to repay the outstanding balance within 60 days -- into the 401(k) plan or into a rollover IRA. Otherwise, the IRS will treat the loan amount as an early withdrawal on which you owe income taxes and an early withdrawal penalty.
    • To learn more, see: 401(k) Plan, IRA.
  • Money Which Is Not Vested
    • Employer contributions which are in the plan, but which you do not get to keep when you leave the employer are not vested.
    • You lose any benefits in your retirement plan that are not vested if you leave.
  • Money Which Is Vested
    • Money in the Plan which is vested belongs to you even though you leave the employer who sponsored the plan.
  • You can:
    • Roll over the money into a tax sheltered retirement vehicle of the new employer.
    • Roll over the money to an IRA you already have or open.
    • If your employer will allow you, leave the money in your employer's plan until you are allowed to use the benefits. OR
    • You can cash out. Cashing out is not recommended -- particularly if you are under age 59 l/2.- even if you put the cash to good use such as paying down credit-card balances. Cashing out (also known as early distribution) can be expensive: There is a 10% penalty for withdrawing your money before age 59 l/2. The money is subject to ordinary income taxes. You lose the advantage of tax free compound earnings.
    • It's your call whether to roll the money into a new employer's 401(k) or into your own traditional IRA. You cannot roll money from a 401(k) directly into a Roth IRA.
• IRA:
  • With an IRA, you can choose your own investments.
  • You can also make withdrawals under certain circumstances. For example, if you are a first-time home buyer (someone who hasn't owned a house in the past two years), you can take $10,000 from an IRA without paying a penalty.
  • Once the money is in an IRA, if your adjusted gross income is less than $100,000, you can convert a traditional IRA to a Roth IRA. You pay tax on the amount you convert in your highest tax bracket. If your income is low, and your medical condition is under control, this may be a reasonable action in return for tax-free income lat retirement.
• 401(k):
  • Most companies allow you to borrow against your balance. You also possibly receive expert advice about investments. On the other hand, it may not be a good idea to leave your money with your former employer forever. It's easy for them to lose track of you. You may even lose track of them if there are mergers or they go out of business. If your balance drops below $5,000, your employer could cash you out of the plan
• If you do roll the money into a new employer's plan or into an IRA:
  • You have 60 days to complete the rollover. If there is a waiting period at the new employer before which you can participate in the retirement plan, ask the new company whether you can join the plan one month early. Not every company accepts transfers, but those that do will often reduce the waiting period for rollovers, or will waive it entirely. You may still have to wait to contribute new money to your new employer's plan.
  • It is not advisable to get the money in the form of a check. If you do, your current employer must withhold 20% of the money for federal taxes. You can get a refund if you deposit the money into a new retirement plan within the required 60 days. The refund won't arrive until the following year.

Thanks to various federal and state laws, there does not have to be a gap in your health insurance when you change jobs.

COBRA permits you to continue to have health insurance from your current employer to cover you through a probationary period.

If you had your health insurance for a sufficient period of time, because of HIPAA the new employer's coverage will take over at the end of the probationary period. There will noty be an exclusion or a waiting period for a pre-existing condition. If there is, an extension of your current coverage may cover -- or you can pay under COBRA.

Coverage During The Probation Period

Many employers require a probation period when a new employee is hired to see if the relationship will work and to be sure people don’t join a company just to get benefits. The probation period can last up to six months.

During a probation period, a new employee is not eligible for any of the employer’s benefits, including health insurance. The probation period is the time when you are literally on probation with the new employer, rather than a permanent hire.

Under a federal and similar state laws known as COBRA, you have the right to stay on your former employer’s plan for 18 (and possibly 36 months) until the new employer’s insurance starts. The key is not when you start work with the new employer, but when you actually become covered by the new employer’s health insurance.

While your health insurance from your employer is continued under COBRA, you will pay the monthly premiums, to a maximum of 102% of the premium the former employer is charged for the coverage.

Coverage During The Pre-Existing Conditions Waiting Period

Most health insurance policies include a provision known as a Pre-Existing Conditions Waiting Period for health conditions which started before the effective date of the new coverage. The provisions postpone coverage for up to 12 months and, in some case, longer.

While a pre-existing condition exclusion is in effect, expenses relating to any new health conditions are covered but not any expenses relating to pre-existing health conditions.

There are three different ways that you may be covered for your pre-existing health condition during a Pre-Existing Conditions Waiting Period: HIPAA, COBRA and through extensions.

• HIPAA
  • Before HIPAA, someone changing jobs had to go through the Pre-Existing Conditions Waiting Period all over again even though they were covered under a prior employer's plan.
  • HIPAA provides limitations on a new pre-existing condition waiting period and provides credit against that condition for your previous coverage.
  • To learn more, see HIPAA.
• COBRA
  • If you worked for an employer with enough employees, you can continue coverage from your previous employer for up to 18 months. You will have to pay the premiums for the continued coverage, as well as whatever part employees pay at the new employer. If there weren't enough employees for COBRA to apply, a state law may.
  • To learn more, see COBRA.
• Extensions
  • Extensions are built into many employers' health insurance policies. They aren't talked about a lot and there is nothing to do to continue them when an employee leaves an employer.
  • An extension provides that if you are being treated for a health condition when your coverage terminates, you will continue to be covered for that same condition (but not any other health conditions) for 12 months from the date your former health coverage stops.
  • If there is an extension in the policy, it automatically goes into effect.
  • Extensions do not count as coverage for purposes of HIPAA.

Two Examples Of How COBRA, HIPAA and An Extension Can Work Together To Prevent Job Lock

• Example One: Mitch has diabetes and has worked at A Corp. for four years. He changed jobs and went to work for B Corp. His coverage at B Corp. doesn't start until he has been there for a probationary period of three months (90 days). Under COBRA, he can continue A Corp's health insurance while he goes through the 90 day waiting period at B Corp.
• Once he becomes covered under B Corp's health insurance, Mitch drops the coverage he had from A Corp under his COBRA. He gives the health insurer at B Corp. a Certificate Of Creditable Coverage that shows he had coverage with A Corp. for four years which lasted to the day he got his coverage from B Corp. This allows him to be covered for charges related to his diabetes immediately without having to go through a new Pre-Existing Conditions Waiting Period.
•  If the A Corp. health insurance policy had an extension provision, Mitch's diabetes would also be covered under the A Corp. policy for 12 months from the date A Corp's coverage ended.
• Example Two: Debra had Medicaid because she was disabled due to HIV and was collecting Supplemental Security Income (SSI). She lost her SSI and Medicaid when her mother died leaving her $25,000 from a life insurance policy. Six months later, Debra went to work for C Corp and enrolled in the new employer's health insurance plan. Because she had no coverage within 63 days of getting the health insurance from C Corp, she will be covered under C Corp's health insurance for any illness not related to her HIV, but she will have to wait until the health plan's Pre-Existing Conditions Waiting Period expires before she will be covered for charges related to HIV.
• NOTE: If a pre-existing condition exclusion may apply to you solely because you did not have a full 12 months of previous health coverage, see Pre-Existing Conditions Limitations.

Benefits From A New Employer Do Not Generally Start On Day One

Most employers do not offer benefits until new employees work through a probation period, usually one to three months.

Health, Dental, Vision and Prescription Drug Coverage

Health, dental, vision and prescription drug coverages automatically become effective once you pass the probation period and complete the appropriate enrollment forms.

Because of HIPAA, you may not be subjected to another pre-existing condition period waiting period if you have coverage, you've had it for a long enough period of time, and it hasn't been more than 62 days (two months) since your previous coverage ended.

Under the Americans With Disabilities Act and similar laws, you cannot be discriminated against with respect to an employer's health insurance because of your medical condition.

If there is a waiting period before the new employer's health insurance starts, you may be permitted to continue your current health coverage under COBRA and similar state laws -- though you'll have to pay the full premium.

If money is an issue and you don't want to, or can't afford to, continue your insurance:

• You will not have insurance for the months of the waiting period. This is not a good thing for anyone, much less a person with a medical history.
• At least you won't be penalized for those months with respect to a pre-existing condition exclusion period under the new employer's health plan. The waiting period counts for this purpose as if you were covered during those months.
• If you allow a gap without health insurance for more than 62 days (other than the waiting period) you can be subjected to a new pre-existing condition exclusion in your new health insurance.

Group Life Insurance

Group Life Insurance is almost always issued without health questions to new employees and starts at the end of a probationary period.

If higher amounts of life insurance are offered (“supplemental life”), there are usually health questions with respect to those supplemental amounts. Rather than be put off, take the time to read the literature. There may be no questions if you want life insurance up to a preset limit. If there are questions, you may be able to qualify without lying.

Some people have been known to move from employer to employer just to accumulate life insurance.

Long Term Disability

Long Term Disability Insurance is almost always issued without health questions. Still, it becomes important to find out when it starts, and whether there is an exclusion from coverage due to your pre-existing condition.

Retirement Plans

Retirement Plans often have waiting periods that last longer than the probation period for other benefits.

Check your Summary Plan Description to find out the details.

NOTE: To find out how to review a new employer's benefits, including when they start, without disclosing your health condition, see: Seeking New Employment.

Before you make a change in career, it is advisable to think through the change just like you did when deciding on a treatment. In other words:

• Don't be surprised if you have to stay in your current job for a while to bring in income to continue your lifestyle and help pay the medical bills.
• You are legally protected when making the change. A new employer cannot ask about your health history. Neither can schools.
• Pull together as many facts as you can. 
  • Probe your past. Think back to your early days when you started work. What were your early enthusiasms? Or, to look at the question another way, are there things you regret not having done? Do the answers hold a clue to what you would enjoy doing in the years ahead? 
  • Can you make the living you need doing the activity you most enjoy?
  • If you would need to relocate, take some time (possibly using vacation time) to visit the potential locations. Make several trips is possible - ideally at different times of the year.
  • Bounce your thoughts off of people who know you well and who you trust to give impartial advice.
  • Think about how much time it will take to get started in the new career - and to make the money you need to live on and to pay your health insurance and other health related expenses. 
• Don't rush the decision more than you have to. Take as much time as you need to make a reasoned decision.

For a list of factors to consider about making a change, click here.