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The federal government may shut down if Congress fails to pass a funding bill by midnight Tuesday. If that happens, federal employees could face furloughs and potential layoffs.
Here’s what they need to know about maintaining their health insurance.
Furloughs and Reduction in Force Notices
Congressional Democrats are pushing to extend Affordable Care Act (ACA) tax subsidies that could save Americans thousands of dollars on the ACA Marketplace. Congressional Republicans, however, remain opposed.
The tax credits expire at the end of the year, which would cause health insurance premiums to soar for millions of Americans.
While a funding deal must be agreed upon by midnight, Democrats have demanded that any proposal must include an extension of the healthcare premium tax credits.
President Trump has threatened mass firings if lawmakers fail to reach a budget agreement. He’s ordered federal agencies to prepare layoff lists in the event of a shutdown. These lists are to include employees who are “not consistent with the President’s priorities,” according to a memo released by the Office of Management and Budget.
In past shutdowns, the government temporarily furloughed employees, putting them on unpaid leave.
During the most recent government lockdown in 2018, about 40% of nonpostal federal employees, or 850,000 people, were furloughed.
Democrats remain insistent on their demand to extend healthcare subsidies.
“We actually need to enact legislation to ensure that the Affordable Care Act tax credits are extended,” said House Democratic Leader Hakeem Jeffries on ABC’s “This Week.” He added that termination notices for the tax credits will be sent out “in a matter of days.”
“And the challenge that we have in this particular instance is that, several times over the last few months, Republicans in the House have had the opportunity to vote with Democrats to extend the Affordable Care Act tax credits, and they’ve repeatedly and consistently declined to do it,” he said.
Maintaining Health Insurance Coverage
Federal employees who’ve been laid off under the Trump administration have reported receiving no severance payments and 31 days of continued health coverage.
To stay prepared, federal employees should determine the specific date their healthcare coverage will end. Workers may have the option to extend coverage for up to 18 months through Temporary Continuation of Coverage, or up to 36 months for a child or former spouse. However, employees will still be responsible for full plan premiums plus a 2% administrative fee.
All federal employees are eligible for TCC unless their leave was involuntary due to gross misconduct.
To apply for TCC for a child, former federal employees must notify their employing office within 60 days of the qualifying event and supply the child’s mailing address. The child must complete the election form, as the enrollment will be under their name, and they will receive billing directly.
If premiums under TCC are unaffordable, former employees may also qualify for a health plan through the ACA marketplace. A special enrollment period will kick into effect for 60 days should they lose qualifying health coverage. Medicaid may also be an option, depending on income and eligibility.
Should all those options be exhausted, short-term health insurance may offer a low-cost alternative to COBRA, or Consolidated Omnibus Budget Reconciliation Act, plans, which are typically available to private-sector workers.
Premiums reflect the average for a 30-year-old woman who is a nonsmoker for the three lowest quotes in these cities: Orlando, Florida, Phoenix and El Paso, Texas.
Options, like Everest, offer low premiums and flexible terms for those needing temporary coverage between jobs.
Co-pays can start as low as $50 with deductible tier options at $1,000, $2,500, $5,000, $7,500 or $10,000. Everest short-term insurance is available in 28 states, including Virginia.
Bottom Line
If you’re a federal employee, now may be the time to prepare for a potential furlough or layoff as the budget deadline approaches. While a layoff may terminate your health insurance, there are avenues to extend your coverage. Short-term plans may also help bridge any gaps.