Don't Cancel Your Health Insurance if You're Furloughed

Federal employees across government are concerned these days about the possibility of widespread furloughs. Some are clearly beginning to plan for the prospect of losing a portion of their income -- but maybe not in the best way.

According to the Office of Personnel Management, some employees are calling the agency and expressing interest in canceling their coverage under the Federal Employees Health Benefits Program if they lose income under a furlough scenario.

You may be thinking: "That's a crazy idea." If so, you're right. Canceling your health insurance coverage is not a good strategy on several levels:

  • If you participate in premium conversion where you are paying for your health insurance with pre-tax dollars, you won’t be able to cancel your coverage until the next open season since being furloughed is not one of the permissible events that would allow you to change your coverage.

  • If you don’t participate in premium conversion and cancel your coverage, you would need to wait until the next open season to reenroll.

  • If you are within five years of retirement, you cannot continue FEHBP into retirement if you haven’t been covered for the last five years of your career -- unless you're covered under a spouse’s FEHBP or you’ve had coverage under TRICARE for the five years.

But the most important reason not to cancel your health insurance is because you might need it.  Having an accident or an illness can cause much more severe financial problems than a furlough.

For specific information on how health insurance coverage is affected in a furlough situation, see OPM's guidance on administrative furloughs. It says, "If the employee’s salary becomes insufficient to pay FEHB premiums due to the furlough, [then] leave without pay/insufficient pay rules apply. If the employee chooses to remain covered, the enrollee share of the FEHB premium will accumulate and be withheld from pay upon the employee’s pay becoming sufficient to cover the premiums."

Tammy Flanagan is the senior benefits director for the National Institute of Transition Planning Inc., which conducts federal retirement planning workshops and seminars. She also writes the weekly Retirement Planning column on GovExec.com.

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
FROM OUR SPONSORS
JOIN THE DISCUSSION
Close [ x ] More from GovExec
 
 

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Going Agile:Revolutionizing Federal Digital Services Delivery

    Here’s one indication that times have changed: Harriet Tubman is going to be the next face of the twenty dollar bill. Another sign of change? The way in which the federal government arrived at that decision.

    Download
  • Cyber Risk Report: Cybercrime Trends from 2016

    In our first half 2016 cyber trends report, SurfWatch Labs threat intelligence analysts noted one key theme – the interconnected nature of cybercrime – and the second half of the year saw organizations continuing to struggle with that reality. The number of potential cyber threats, the pool of already compromised information, and the ease of finding increasingly sophisticated cybercriminal tools continued to snowball throughout the year.

    Download
  • Featured Content from RSA Conference: Dissed by NIST

    Learn more about the latest draft of the U.S. National Institute of Standards and Technology guidance document on authentication and lifecycle management.

    Download
  • GBC Issue Brief: The Future of 9-1-1

    A Look Into the Next Generation of Emergency Services

    Download
  • GBC Survey Report: Securing the Perimeters

    A candid survey on cybersecurity in state and local governments

    Download
  • The New IP: Moving Government Agencies Toward the Network of The Future

    Federal IT managers are looking to modernize legacy network infrastructures that are taxed by growing demands from mobile devices, video, vast amounts of data, and more. This issue brief discusses the federal government network landscape, as well as market, financial force drivers for network modernization.

    Download
  • eBook: State & Local Cybersecurity

    CenturyLink is committed to helping state and local governments meet their cybersecurity challenges. Towards that end, CenturyLink commissioned a study from the Government Business Council that looked at the perceptions, attitudes and experiences of state and local leaders around the cybersecurity issue. The results were surprising in a number of ways. Learn more about their findings and the ways in which state and local governments can combat cybersecurity threats with this eBook.

    Download

When you download a report, your information may be shared with the underwriters of that document.