Portable Benefits

AAA

DEFINITION of 'Portable Benefits'

Benefits that have been paid into or accrued in an employer-sponsored plan and that can be transferred to a new employer's plan or to an individual who is leaving the workforce. Applies to benefits from health plans, retirement plans and most other defined-contribution plans.

Portability of benefits can be found within most 401(k) plans, 403(b) plans and health savings accounts (HSAs).


INVESTOPEDIA EXPLAINS 'Portable Benefits'

There has been a lot of recent progress in making employee benefits more portable. 401(k) and 403(b) plans can usually be rolled into a new employer's plan or to an IRA; the Health Insurance Portability and Accountability Act (HIPAA) even ensures that pre-existing medical conditions don't exclude a worker when moving from one group health plan to another.

The two main types of plans that don't have portable benefits are defined-benefit plans (such as pension plans) and company-sponsored flexible spending accounts (FSAs).


RELATED TERMS
  1. Portability

    An employee's ability or right to retain certain benefits when ...
  2. Burden Rate

    Indirect costs associated with employees, over and above gross ...
  3. 401(a) Plan

    A money-purchase retirement savings plan that is set up by an ...
  4. Group Health Insurance Plan

    An insurance plan that provides healthcare coverage to a select ...
  5. Allocated Benefits

    A type of payment that comes from a defined-benefit retirement ...
  6. Employee Savings Plan

    A pooled investment account provided by an employer that allows ...
RELATED FAQS
  1. Why should investors research the C-suite executives of a company?

    C-suite executives are essential for creating and enacting overall firm strategy and are therefore an important aspect of ... Read Full Answer >>
  2. How does a pension income drawdown work?

    While there are similar drawdown plans in the United States, a pension income drawdown plan most commonly refers to a specific ... Read Full Answer >>
  3. What is the difference between a direct and an indirect distribution channel?

    A direct distribution channel is organized and managed by the firm itself. An indirect distribution channel relies on intermediaries ... Read Full Answer >>
  4. What debt/equity ratio is typical for companies in the insurance sector?

    The debt-to-equity ratio is calculated by dividing total liabilities by total equity, and it is used to measure leverage. ... Read Full Answer >>
  5. How does the risk of investing in the insurance sector compare to the broader market?

    Due to economic, demographic and interest rate trends, there is less risk when investing in the insurance sector compared ... Read Full Answer >>
  6. What is the main business model for insurance companies?

    Insurance companies base their business models around assuming and diversifying risk. The essential insurance model involves ... Read Full Answer >>
Related Articles
  1. Insurance

    Find Secure And Affordable Post-Work Health Insurance

    Learn how you can avoid financial catastrophe - without Medicare.
  2. Retirement

    Transfer Retirement Savings When You Change Jobs

    Half of Americans lose their nest eggs when they switch careers. Learn why you should avoid this trap.
  3. Retirement

    Health-y Savings Accounts

    HSAs can provide a new way to save for retirement and medical expenses.
  4. Professionals

    Help Parents Avoid This Retirement Savings Blunder

    Parents should make saving for their own retirement a priority over helping with their children’s college costs.
  5. Investing

    Financial Gifts For Grads: Kindergarten To College

    If you really want to help your grad preparing for the future, consider a present that supports their long-term goals—an early start to financial planning.
  6. Professionals

    5 Signs That You Have a Lousy 401(k) Plan

    Knowing whether a 401(k) plan is good or not so good is important. This will help participants decide how much to invest and when to demand improvements.
  7. Professionals

    Obamacare: Can it Be Repealed?

    Attempting to repeal Obamacare is a yearly ritual for House Republicans, but trying again in 2016 or beyond could create more problems than it solves.
  8. Entrepreneurship

    Why Small Business Owners Need Financial Advisors

    Small business owners are too busy to effectively manage their own money. That's why a financial advisor can be a big help.
  9. Economics

    What is a Business Model?

    Business model is the term for a company’s plan as to how it will earn revenue.
  10. Professionals

    401(k) Risks Advisors Should Know About

    Lawsuits are challenging the the fiduciary duty of plan sponsors related to 401(k) fees. Here's what financial advisers should know.

You May Also Like

Hot Definitions
  1. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  2. Productivity

    An economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in ...
  3. Variance

    The spread between numbers in a data set, measuring Variance is calculated by taking the differences between each number ...
  4. Terminal Value - TV

    The value of a bond at maturity, or of an asset at a specified, future valuation date, taking into account factors such as ...
  5. Rule Of 70

    A way to estimate the number of years it takes for a certain variable to double. The rule of 70 states that in order to estimate ...
  6. Risk Premium

    The return in excess of the risk-free rate of return that an investment is expected to yield. An asset's risk premium is ...
Trading Center