pcfo_smallAny time you switch employers you may lose your benefits.  If you had health insurance you probably know that you can take advantage of COBRA.  This law allows you to keep your health insurance for up to 18 months.  However the cost of COBRA can be prohibitive.  The cost for a family can be as high as $1500/mo.  The reason the cost is so high is the most employers subsidize the cost of health coverage as an employee benefit.  COBRA prices are without any subsidy.  You do have options, you may purchase your own insurance for less money (any possibly less benefits), you can  buy what is called temporary coverage which is mainly for catastrophic events, or you may join another firm that offers insurance after x months of employment.

Group life insurance is portable, but at a much higher price since it becomes an individual policy and not a group policy.  I highly discourage clients from counting their group life insurance in their calculations for determining how much life insurance they need to protect their family.  The reason for this is that you have no idea where you will be working when you die.  Insurance by definition is to provide certainty where there is none.  Owning your own life insurance instead of renting it from your employer means you are in control.  Disability insurance is NOT portable and very inexpensive when purchased as a group.  Individual disability insurance is much more expensive when purchased individually.  The odds are six times greater that you will suffer a disability of 90 days or longer than die before age 65 (for someone in their thirties).

In summary when you are considering leaving an employer to go out on your own, benefits are a serious consideration.  Millions of people do it because the benefits of self employment outweigh the disadvantages.   One last point is that your employer has been paying 1/2 of your social security and medicare taxes.  Self employed individuals must pay both haves or double what they were paying.  This is an additional 8%+ of extra taxes on the first $110,000 of income.  For this reason I advise clients NOT to put their spouses on the payroll to avoid paying double self employment tax on two people instead of one.