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As layoffs continue as part of the Trump administration’s downsizing of the federal workforce, impacted employees will have some important decisions to make about their health care coverage after their last day on the job.
“In a time of losing that income and maybe not knowing when that job in the private sector is going to arrive, there’s going to be a lot of out-of-pocket health care costs here,” said Kevin Moss, of Consumers’ Checkbook.
For most federal workers, health coverage should continue for 31 days following their last day employed, Moss said. During this period, feds will have a decision to make, about whether they pay to keep their plan for up to 18 months or choose another option for health care coverage.
Temporary continuation of coverage
As laid off federal workers, most would qualify for Temporary Continuation of Coverage, or TCC, which will kick in after the 31-day period after their termination.
The benefit of TCC, Moss said, is it allows you to keep the same coverage you had while working, for up to 18 months, but the government will no longer help you pay for the coverage.
“For temporary continuation of coverage, you will have to start paying the full premium, both the government share and the employee share, plus a 2% administrative fee on top of that,” he said.
The price tag is expensive.
Moss looked at a popular Blue Cross, Blue Shield self and family plans that are often used by federal workers enrolled in the Federal Employee Health Benefits program, and said while it costs an employee $660 a month while working, the plan would jump to $2,250 for unemployed government workers.
“You will experience much higher premiums, but you will keep your existing plan, and the benefits that the FEHB plans provide are generally better than the benefits that you can get if you’re to go to the marketplace,” Moss said.
Federal workers can also change which federal health care plan they’re currently on for the TCC period.
“You may want to think about going into an FEHB plan that has a lower FEHB premium during this time of transition, knowing that you’re going to be shouldering the entire load of the premium,” he said.
A worker must also sign up for TCC within 60 days of separation.
Move onto a spouse’s plan
For laid off federal workers who are married to someone with health care coverage through their employment in the private sector, Moss said another option would be joining onto their health care plan.
“If you fall into that camp, that may be the best option for you, because most private employers are going to pick up a large portion of the premium,” Moss said.
Moss said the layoff would be a so-called “qualifying life event,” which allows the spouse to add family members to a policy outside of the open enrollment period.
Marketplace plans
If a fired government worker doesn’t have an insured spouse whose plan they can move onto, a third option is shopping for a plan on Virginia, Maryland or D.C.’s health insurance marketplace.
One thing to note about shopping for a plan in a marketplace is your age raises the cost of the plan.
“The premiums you pay are based on age, and as you grow older, the premium gets more expensive,” Moss said.
While you do have a choice on how much a premium is, more robust plans typically cost more.
“The premiums can be very expensive, but you may qualify for premium subsidies based upon where you live and your income,” he said. “The premium subsidies help pay a portion of the premium to make these plan options more affordable, and it is something to consider for those marketplace options.”
Those subsidies, however, may need to be paid back, if you end up making more in 2025 than you did in 2024 after finding a new job.
Moss said it is not out of the ordinary to find plans with $10,000 deductibles when shopping on the marketplace.
Federal workers with serious medical conditions
WTOP heard from one federal worker who was let go, and was on dialysis for Stage 5 kidney failure while they await a kidney donation. The worker also has a prosthetic leg and was told he may need open-heart surgery.
Moss said he would recommend for people in those situations, if possible, to try and pay for the temporary continuation of coverage over purchasing a plan on the health insurance marketplace. He said it would allow individuals to not have issues keeping their doctors, adding that pre-authorizations for medicines and other treatment could remain active.
“I think that’s a reason to maybe think about keeping what you have, even though you’re going to be paying a lot more out of pocket,” Moss said. “The administrative burden of switching to another plan, you’re going to have to go and do all the research.”
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Mike Murillo is a reporter and anchor at WTOP. Before joining WTOP in 2013, he worked in radio in Orlando, New York City and Philadelphia.