Insurance For Fired and Laid Off Workers - FederalPay.org

High-quality health insurance benefits are among the most important employee benefits of federal employment. You may be concerned about your financial future if you have been fired or laid off from your federal job. Perhaps you or your dependents rely on your federal health insurance to treat an ongoing medical condition.

Transitioning to a different health insurance policy can be some of the most concerning and complex issues federal employees must figure out after being laid off or fired. Understanding your options for insurance after being laid off or fired can help you protect yourself.

Federal Employees’ Healthcare Benefits (FEHB)

The Federal Employees Health Benefits (FEHB) is designed to provide federal employees with comprehensive health insurance coverage. FEHB is one of the most important employee benefits for federal employees because it provides the following benefits that many private sector health plans do not offer:

• Coverage without physical examination
• No restriction on age or physical condition
• It offers a wide range of health insurance plans from which to choose
• Once enrolled, members cannot be canceled by the health insurance plan

Losing comprehensive FEHB benefits can be devastating for families, and it is important to know your options if you have been laid off or fired.

What Happens to My FEHB Insurance When I Leave My Federal Job?

Your FEHB coverage will be terminated on the last day of the pay period you separate from your job. For example, if you are paid on the 1st and 15th of the month and separate from your job on the 5th, your coverage will remain until the 15th. At that point, you will have an additional 31-day temporary extension of your coverage. Your FEHB benefits will continue at no cost to you during this time period. You will have a chance to convert to a non-group contract or apply for Temporary Continuation of Coverage (TCC) during this period.

How Do I Apply for Temporary Continuation of Coverage (TCC)?

Temporary Continuation of Coverage (TCC) allows federal employees who have been fired or laid off to continue the same health benefits they had while employed. If your spouse and children were also enrolled, they could continue the same level of benefits they had through TCC. Enrollment under TCC is limited to 18 months. You will have to pay the government and employee shares of your premium. You will also need to pay an additional 2% fee for administrative costs.

After contacting your Human Resources Office, you will need to review a brochure called “Temporary Continuation of Health Benefits Coverage.” The brochure includes a form called “Request for TCC Coverage.” You and your family members who will lose their FEHB coverage because of your termination may be eligible for TCC. When applying for TCC, you can select your current or another health plan. You will need to send in your “Request for TCC Coverage” and a completed SF 2809 (Health Benefits Election Form). Finally, you will need to include applicable supporting documentation.

I Was Fired From My Job, Can I Still Access TCC?

The answer to this question is “it depends.” If your termination of employment is due to gross misconduct, you will not be entitled to TCC insurance benefits. The human resources office responsible for managing your termination will decide whether the conduct leading to your involuntary separation is considered “gross” misconduct. If you have lost FEHB coverage after 12 months through a leave without pay status, you won’t be able to TCC.

Suppose you have been laid off because of redundancies, budget cuts, or for making a mistake. In that case, you likely will not be considered to have engaged in gross misconduct and will probably be eligible for ongoing benefits.

Examples of Gross Misconduct

Gross misconduct generally involves a serious offense or infraction. The human resources department managing your case will need evidence showing that you engaged in some type of intentional behavior. Making a mistake or not meeting your employer’s expectations will not meet the high burden of gross misconduct. Gross misconduct is a behavior that can result in an employee being immediately dismissed because it is serious enough and potentially criminal. According to federal case law, gross misconduct means an act that deliberately or willfully:

• Threatens to break an employer’s rules
• Shows repeated disregard for the employee’s obligations to the employer, or
• Disregards the standard of behavior that an employer has a right to expect of its employee

The cause given for your separation is critical when it comes to qualifying for temporary insurance benefits. The human resources office must notify you that you have been separated because of gross misconduct. They also need to notify you of your options to appeal their decision. If you have been accused of being terminated for gross misconduct and believe this categorization is not justified, you have a right to challenge the determination.

Can My Spouse and Kids Receive TCC Insurance?

If you are a former federal employee, your TCC family enrollment covers the same family members covered under the regular family enrollment. However, you will need to ensure your family members meet the same eligibility requirements. If you have a new spouse or newborn child while on TCC, you can add them during the TCC enrollment period.

How Long Will My Health Insurance Coverage Last if I am Fired From a Federal Job?

If you lose your FEHB coverage because you have been fired or laid off from your federal job, you will be eligible for TCC. You will have a 31-day temporary extension of your typical FEHB coverage at no cost, even when you have elected TCC. If you select TCC, it will take effect on the day that your 31-day temporary coverage ends. As the separating employee, TCC coverage can last up to 18 months after your date of separation. 

Your children and former spouse are eligible for TCC coverage up to 36 months after the date of separation from your federal employee. Coverage typically ends when your TCC coverage expires, or you cancel your enrollment. You will need to make your monthly premium payments on time or risk losing your eligibility. Being laid off or fired from your job can be overwhelming and challenging, but understanding your options and applying for TCC can help you receive the insurance benefits you need while you prepare for the future.

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