Federal Health Insurance Plans Are ‘Essential’ During Government Shutdowns

The Office of Personnel Management (OPM) released a final rule on April 2, 2021 that states federal employees will not lose their health benefits during government shutdowns. The OPM rule implements provisions within the National Defense Authorization Act (NDAA) of 2020 to make certain federal health and life insurance services “essential.”

Employees who have been furloughed as a result of a government shutdown will continue to be able to make changes to their Federal Employees Health Benefits Program (FEHBP) and Federal Employees’ Group Life Insurance (FEGLI) services. The rule also allows employees to keep coverage under their Federal Employees Dental and Vision Insurance Program (FEDVIP) and Federal Long Term Care Insurance Program (FLTCIP). Previously, when these employees were in a “non-pay” status due to being furloughed or working without pay during a lapse in appropriations, they were unable to make changes and could be penalized for failing to make premium payments.

While many federal insurance programs continue throughout government shutdowns, after two consecutive pay periods they may start billing federal employees for missing premiums. During the most recent 35-day government shutdown, OPM issued an emergency extension to allow enrollees to continue their coverage even after three missing pay periods.

Under the new rule, after a government shutdown is over, premiums for FEDVIP and FLTCIP programs will be paid from the participants’ back pay.

The change making certain federal health and life insurance services “essential” was added in the FY 2020 NDAA after several lawmakers proposed stand-alone bills to protect federal insurance following the 2018-2019 government shutdown.

The late House Oversight and Reform Committee Chairman Elijah Cummings (D-MD) and Senator Tina Smith (D-MN) introduced the Ensuring FEHBP Coverage During Shutdowns Act in their respective chambers in 2019 to allow those experiencing a qualifying life event to register new dependents during a government shutdown. The two also introduced the Ensuring FEDVIP and FLTCIP Coverage During Shutdowns Act.

Upon introduction, the lawmakers said in a statement, “Government shutdowns place thousands of federal employees and their families in very difficult positions.  While we truly hope to avoid shutdowns in the future, the measures we are introducing today would ensure that federal employees could enroll their newborn babies in their health insurance plans and that they would not lose their dental, vision, or long-term care insurance if another funding lapse occurs.  We owe it to our civil servants to mitigate the impact of funding lapses over which they have no control.”

The language of these legislative proposals was incorporated into the FY 2020 NDAA and passed into law.