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Federal government realignment is pushing tens of thousands of workers out of their health plans.
The realignment is teaching many private-sector benefits specialists something new: Federal health plan participants have their own version of the COBRA employee benefits continuation program — the Federal Employee Health Benefits Program temporary continuation of coverage program.
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TCC is similar to COBRA in many ways, but the signup rules, coverage options and coverage duration limits are different, and what happens to terminated employees who get their old jobs back is different.
Private-sector benefits specialists who understand TCC basics can do a better job of answering the affected workers' questions and helping private-sector employers understand the new hires who are coming in with TCC coverage.
COBRA basics: A benefits continuation section in the Consolidated Omnibus Budget Reconciliation Act of 1985 lets many private-sector workers who are leaving their employers keep their health coverage.
The U.S. Labor Department's Employee Benefits Security Administration has posted a basic COBRA guide here.
COBRA continuation coverage can last for either 18 months or 36 months, depending on the circumstances.
Most of the workers who keep their coverage end up paying an amount equal to 102% of the full cost of the coverage, not just the employee's share of the premiums. That means that most of the departing workers who take up COBRA continuation coverage have a relatively high income. They may also have complicated health care needs and high medical costs.
Related: COBRA insurance 101: A Q&A with Mark Waterstraat
Employers that fail to provide the right COBRA eligibility notices at the right time or follow other COBRA rules face the threat of Internal Revenue Service COBRA audits.
Some states have their own "mini-COBRA" programs.
Temporary continuation of coverage: The Office of Personnel Management has a TCC guide on its website, and Gilbert Employment Law posted a new TCC guide on its website last week.
TCC automatically gives an eligible former federal employee 31 days of free continuation coverage.
The duration limit for TCC continuation coverage is always 18 months.
Departing plan participants pay 102% of the full cost of the coverage, but they can often choose to buy a leaner, cheaper conversion policy, in place of the TCC coverage.
Some of the workers affected by the current federal government realignment are hoping that they will be reinstated. In some cases, affected workers who get their old federal jobs back can get a refund of their TCC coverage premium payments, according to the OPM guide.
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Allison Bell
Allison Bell, a senior reporter at ThinkAdvisor and BenefitsPRO, previously was an associate editor at National Underwriter Life & Health. She has a bachelor's degree in economics from Washington University in St. Louis and a master's degree in journalism from the Medill School of Journalism at Northwestern University. She can be reached through X at @Think_Allison.
