Some federal workers lost health coverage they had paid for. A Democrat wants answers

The top Democrat on the House Oversight Committee is demanding answers from Commerce Secretary Howard Lutnick about why employees fired from his department were denied health care coverage they had already paid for.

“I urge you to take immediate action to remedy the financial and physical injury done to employees who had their health coverage illegally cancelled,” wrote Rep. Stephen Lynch of Massachusetts, acting ranking member of the committee, in a letter to Lutnick. “I also request information about how you are ensuring that such abuse of employees never occurs again.”

The letter, sent to Lutnick on Wednesday, follows reporting by NPR that Commerce Department employees who were fired, reinstated by court order, and fired again had had their health care coverage prematurely cut off. They were left uninsured – despite the fact that they’d been paying their health care premiums through paycheck deductions, and despite the federal government’s policy to provide 31 days of free health care coverage after an employee is terminated.

“Commerce’s failure to meet its health care obligations to its employees raises concerns about whether other forms of owed compensation, such as payment for earned leave and credit hours, are being denied,” Lynch wrote.

Fired, briefly reinstated, and fired again

Those affected were all considered probationary employees, typically more recent hires although many had years of experience in their fields. The Commerce Department fired nearly 800 of them in late February and early March as part of the Trump administration’s efforts to rapidly downsize the federal workforce. At the time, some employees were told their health benefits would end after a 31-day grace period.

But states sued over their sudden terminations, and in mid-March, a federal judge in Maryland found that their firings were likely illegal and ordered them reinstated. The Commerce Department brought them back and put them on paid administrative leave. Some were assured by their supervisors that their benefits would be restored. Others received new insurance cards in the mail.

Then just weeks later, an appeals court voided the lower court order. The very next day, April 10, the Commerce Department informed employees they were being fired once again, retroactive to their original termination dates.

She had hip surgery, believing she was insured

Ya’el Seid-Green was among the hundreds caught up in this chaos. She had worked as a contractor for the Commerce Department’s National Oceanic and Atmospheric Administration for four years before becoming a federal employee in 2023.

She had a long-planned hip arthroscopic surgery scheduled for April 9. She considered putting it off given the upheaval at work and the confusion over whether her health insurance had actually been restored.

“People were getting different answers from different people, different answers from the same people,” Seid-Green told NPR.

The day before her surgery, she got an email forwarded to her by a supervisor that said the government “had run into some issues” but was actively working on restoring her health coverage. That gave her confidence that the surgery would be covered, especially since she’d been paying her premium.

So she showed up the next morning for her surgery. She was handed a cost estimate, paid her $150 co-pay and had the procedure. The very next day, during a follow-up visit, she learned that the Commerce Department was firing her again.

A full week after that, on April 17, she and others at NOAA received a memo from human resources informing them that their health care coverage had ended April 8, the original insurance termination date they’d been given before they were reinstated.

Without insurance, Seid-Green now owes around $15,000 for the surgery alone. This week, she says, she’s gotten calls from her surgery center and her physical therapist urging her to set up payment plans.

More than a month ago, she submitted paperwork to enroll in the federal government’s version of COBRA, paying for the entire cost of her health coverage, but hasn’t yet gotten confirmation that she’s actually been enrolled.

“I just keep telling them that it’ll eventually be covered,” she wrote to NPR this week, adding a fingers-crossed emoji.

A Democrat demands answers

Now, Lynch has asked Lutnick to explain why the Commerce Department did not honor its commitment to continue employees’ health coverage for a 31-day period after their termination, challenging the department’s decision to base insurance coverage on the employees’ original termination dates after the appeals court allowed the firings to go forward. Cases challenging the firings continue to make their way through the courts.

Lynch is also demanding to know why the Commerce Department has not refunded the health insurance premiums that the fired employees kept paying. Half a dozen former Commerce Department employees at NOAA and at the CHIPS for America program told NPR that even their final pay stubs from the pay period ending April 19 show a deduction for their health care premiums.

In the brief April 10 email informing employees they were being fired a second time retroactive to their original termination dates, the Commerce Department said they would not be required to return the pay they had received while they were on administrative leave. Now some of them wonder if the government sees that as more than enough to cover the health care premiums they’d paid, for coverage that was not provided.

In his letter, Lynch asked Lutnick to reimburse all terminated employees for health care premiums paid while they were not covered. He also demanded employees be reimbursed for any medical bills that their insurance would have covered during that time.

Lynch asked that Lutnick provide the House Oversight Committee with answers and a follow-up report by June 18.

The Commerce Department did not immediately respond to NPR’s request for comment on Lynch’s letter and did not respond to multiple earlier requests for comment about the termination of fired employees’ health insurance.