Legal Definitions - P

Portability, in a legal context, refers to the ability to transfer certain rights, benefits, or legal status from one situation, location, or entity to another without losing them. It ensures that an individual or organization can maintain entitlements or privileges even when circumstances change, preventing the need to re-qualify or re-establish those rights from scratch.

Here are some examples:

• Estate Tax Exemption: When a married individual passes away without fully utilizing their federal estate tax exemption, the unused portion can often be transferred, or "ported," to their surviving spouse. This means the surviving spouse can add the deceased spouse's unused exemption amount to their own, effectively increasing the total value of assets they can pass on without incurring federal estate tax.

  How it illustrates portability: This demonstrates the transfer of a significant financial benefit (a tax exemption) from one spouse's estate to another's, ensuring that the benefit is not lost but rather maintained and utilized by the surviving spouse.

• Housing Choice Vouchers (Section 8): A family receiving a Section 8 housing choice voucher in one city may need to relocate to a different city or state, perhaps for a new job or family reasons. Federal regulations allow these vouchers to be "ported" to the new jurisdiction, meaning the family can continue to receive housing assistance in their new location, provided the new housing authority participates in the program and has available funding.

  How it illustrates portability: This shows the transferability of a government social welfare benefit across different geographical areas, allowing recipients to maintain their housing assistance entitlement despite moving.

• Health Insurance Creditable Coverage: Under laws like the Health Insurance Portability and Accountability Act (HIPAA), if an individual has had continuous health insurance coverage (known as "creditable coverage") for a certain period and then switches to a new health plan, the new plan generally cannot impose a new waiting period for pre-existing conditions. The individual's history of prior coverage is "portable" in the sense that it counts towards satisfying requirements in the new plan.

  How it illustrates portability: This example demonstrates how an individual's prior health insurance history and status are recognized and transferred to a new insurance plan, preventing a loss of benefits or the imposition of new restrictions due that history.