FEDS February 2026 Newsletter

The Department of Veterans Affairs has experienced an unprecedented reduction in its workforce, potentially losing an estimated 40,000 employees in fiscal year 2025, according to a report released by members of the Senate Veterans’ Affairs Committee. Lawmakers warn that the losses – especially in clinical and front-line positions – are already impacting care and benefits delivery for millions of veterans. 

When issues arise, agency heads, Congress, and even the public may be looking to place blame – federal managers and supervisors are at risk of getting caught in the crosshairs. A professional liability insurance (PLI) policy from FEDS Protection can help give employees the peace of mind they need to do their jobs effectively in understaffed, high-visibility environments.

The recent Senate report found that 2025 marked the first year the Department of Veterans Affairs saw a net loss of employees after years of growth. While VA leadership had planned to reduce staffing through voluntary separation incentives and attrition, the actual net decline exceeded 40,000 positions. 

The vast majority of these departures – roughly 88% – came from the Veterans Health Administration, which delivers care to veterans nationwide. Significant net staffing losses included:

Historically, VA workforce counts grew year over year, often adding more than 10,000 employees annually. The sudden contraction marks a dramatic operational shift.

 

Lawmakers led by Sen. Richard Blumenthal (D-Conn.) argue that these staffing declines are affecting access, quality, and timeliness of care. VA facilities are reportedly still operating under staffing caps even after lifting a partial hiring freeze, slowing efforts to backfill positions. 

Senate Democrats cite concerns about:

 

Periods of workforce reduction and shifting policy priorities often bring increased professional risk and scrutiny for federal employees. This is especially true for supervisors and managers, whose decisions may become subject to expanded documentation requirements, heightened scrutiny, and increased external oversight from Congress. The operational environment at VA agencies may become more complex and exposed. 

Heightened oversight means that routine managerial actions can trigger claims of mismanagement or misconduct that lead to investigations, administrative action, and possibly civil lawsuits, even when these decisions were made in good faith. When this happens, it is crucial that federal managers have the tools they need to protect themselves – FEDS Protection can help. 

At FEDS Protection, we recognize that federal employees – particularly supervisors, managers, and other leaders – face elevated exposure in today’s climate of heightened oversight and workforce change.

A FEDS Protection professional liability insurance (PLI) policy can provide peace of mind to federal employees.

As the PLI provider endorsed by leading federal manager associations, FEDS Protection offers coverage options that include:

Annual premiums start at $290, and many federal supervisors and managers are eligible for reimbursement of up to 50% of their policy cost through their agency.

To learn more about how a FEDS Protection PLI policy can help safeguard your role as a federal manager, visit www.fedsprotection.com or call (866) 955-FEDS, Monday–Friday, 8:30 a.m.–6 p.m. ET.

If yes, consider FEDS Protection for your government contracting insurance needs. At FEDS Protection, we also support Federal Contractors by providing insurance coverage specifically tailored to meet the unique needs of today's federal contractors, including Professional Liability, Defense Base Act Insurance, and Foreign Liability coverage.  In our experience, many small businesses need assistance in navigating the insurance portion of a government RFP.

The federal government is our specific focus and area of expertise. If you are looking to review your current or upcoming DBA insurance, please contact us today! Learn More Here.

 

The Department of Labor was established in March 1913 and is responsible for federal labor laws that govern the welfare of job seekers such as occupational safety and health, minimum wage and hour standards, and unemployment benefits. 

FEDS Protection has proudly insured these civil servants for nearly two decades. We appreciate your business, loyalty, and feedback. Thank you for your tireless efforts promoting compliance towards the rules and regulations that help foster and promote the well-being of wage earners across the country. 

"In today’s challenging workplace, federal managers confront a wide array of decisions requiring split-second responses in a ‘do more with less’ environment. The purchase of professional liability coverage, as offered by FEDS, can provide those managers with a safety net should their decisions lead to forms of legal review. I recommend any manager with the potential of such review to secure a policy of this type for their financial protection."- Todd V. Wells, Executive Director, Federal Managers Association

Contact us if you or your agency are interested in a webinar or brochures that provide federal employees with best practices on how to protect themselves with a federal employee professional liability insurance policy like those offered by FEDS Protection. FEDS Protection webinars are a valuable resource for learning more about the specific professional exposures of federal employees, PLI in general, and the FEDS Protection program. Check out our library via the link below to access content that speaks to your position in the federal government.