In this article
Thousands of federal government employees lost their jobs in the first months of 2025, in large part under the Trump administration’s efforts to downsize the federal workforce.1 You may be wondering what to do about your health insurance after your federal employment ends. Let’s take a look at your options:
Temporary Continuation of Coverage (TCC) is similar to COBRA
COBRA, which allows people with local government or private sector jobs and eligible group health insurance to temporarily continue their coverage after leaving the job, does not cover health plans sponsored by the federal government.2 Instead, federal workers have access to Temporary Continuation of Coverage (TCC), which has many similarities to COBRA but is specific to the Federal Employees Health Benefits (FEHB) Program.3
If a federal employee with FEHB coverage loses their job for reasons other than gross misconduct, they can use TCC to continue their coverage for up to 18 months.
The employee will need to pay the full cost of coverage – including the share of the premium that the federal government was previously paying on their behalf – plus a 2% administrative fee.
The federal government pays an average of 72% of total premiums for active employees.4 So a former employee who opts for TCC will see a sharp increase in their contribution to premiums, since they will have to start paying that portion themselves to maintain the coverage.
For perspective, here are the approximate average total premiums for FEHB program enrollees in 2025:5
- Self-only: $897/month
- Self plus one: $1,956/month
- Self and family: $2,149/month
While the employee is working, the federal government pays an average of 72% of those costs. But if the employment ends and the person elects TCC to continue their coverage, the former employee will pay the full cost, plus a 2% administrative fee.
So, an average federal employee with self-only FEHB coverage will go from paying about $251/month while employed to about $915/month for TCC. And if they have family coverage, they’ll go from paying an average of about $602/month to about $2,192/month for TCC.5
Depending on the circumstances, it may make sense for an employee to elect TCC. For example, the plan might grant access to specific doctors who aren’t in-network with other available plans. Or perhaps the individual or family has already incurred significant expenses towards their annual out-of-pocket maximum, and they don’t want to start over at $0 on a new plan mid-year.
But before deciding to elect TCC, it’s important to consider the other available alternatives to see if any might be a better overall value. In most cases, the opportunity to switch to different coverage will be time-limited, so you should consider the various options as soon as you know you’ll be losing your FEHB coverage.
What are my alternatives to TCC if I’m losing my FEHB coverage?
Your alternatives to TCC are the same as the options that exist for anyone who is losing their employer-sponsored health coverage. They include:
- Obtaining a plan in the Marketplace. You’ll be eligible for a special enrollment period that will end 60 days after the loss of your FEHB coverage.6 Most Marketplace enrollees qualify for premium subsidies that offset some or all of their monthly premiums.7 But it’s important to understand that your eligibility for Marketplace subsidies will depend on your projected household income for the entire year, not just for the months you expect to need Marketplace coverage.
- Joining your spouse’s (or parent’s) health plan. If your spouse has coverage from an employer that offers spousal coverage, you can be added to that plan (or if your spouse had declined their own employer’s coverage because you were both on FEHB coverage, you can both enroll in your spouse’s plan). You’ll be eligible for a special enrollment period that continues for at least 30 days following the loss of your FEHB coverage.8 (The option to join a parent’s health plan is only available if you’re not yet 26 years old.)
- Enroll in Medicaid. Depending on your circumstances and where you live, you might be eligible for Medicaid.9 Medicaid enrollment is open year round, and eligibility can be based on current monthly income.10 So even if you previously earned too much to qualify for Medicaid, you may be eligible for Medicaid during the months you’re unemployed.
If you subsequently get another job that offers health benefits, you will have an opportunity to enroll in that plan when you become eligible for it, and you’ll be able to cancel whatever coverage you used in the meantime.
If you used Medicaid or a Marketplace plan, you can simply request that your coverage be terminated. Requesting a coverage cancellation is particularly important if you had subsidized Marketplace coverage, as your eligibility for a subsidy will end if and when you gain access to a comprehensive employer-sponsored plan that’s considered affordable.11 If you neglected to cancel the Marketplace coverage and the subsidy continued to be paid on your behalf, you’d have to repay the excess subsidy amount to the IRS when you file your tax return.
If you had enrolled in your spouse’s (or parent’s) employer-sponsored plan, you will be able to disenroll due to your change in employment status.12 (Employer-sponsored coverage is locked in for the full plan year unless you experience an event that will allow you to disenroll, which includes a change in your employment status.)
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org.
Footnotes
- “Federal worker data visualized: Maps and charts show jobs, locations, departments” USA Today. Mar. 1, 2025 ⤶
- “FAQs on COBRA Continuation Health Coverage for Workers” U.S. Department of Labor. Accessed Mar. 24, 2025 ⤶
- “Federal Benefits FastFacts, Temporary Continuation of Coverage (TCC)” OPM.gov. Accessed Mar. 24, 2025 ⤶
- “Health Questions and Answers” OPM.gov. Accessed Mar. 24, 2025 ⤶
- “2025 Premiums” OPM.gov. Accessed Mar. 24, 2025 ⤶ ⤶
- “Title 45 § 155.420(d)(1)(i)” Code of Federal Regulations. Accessed Mar. 25, 2025 ⤶
- “Effectuated Enrollment: Early 2024 Snapshot and Full Year 2023 Average” Centers for Medicare & Medicaid Services. July 3, 2024 ⤶
- “Title 29 § 2590.701-6” Code of Federal Regulations. Mar. 25, 2025 ⤶
- “Medicaid, Children's Health Insurance Program, & Basic Health Program Eligibility Levels” Centers for Medicare & Medicaid Services. Dec. 1, 2023 ⤶
- “Medicaid and Children’s Health Insurance Program (CHIP) Overview” Centers for Medicare & Medicaid Services. Accessed Mar. 25, 2025 ⤶
- “People with coverage through a job” HealthCare.gov. Accessed Mar. 25, 2025 ⤶
- “Title 26 § 1.125-4(c)” Code of Federal Regulations. Mar. 25, 2025 ⤶
