USERRA law allows 24 months of coverage on group health plan
On December 10, 2004, President George W. Bush signed the Veterans
Benefits Improvement Act of 2004, legislation that extends the maximum
period for health plan continuation coverage under the Uniformed Services
Employment and Reemployment Act of 1994 (USERRA) from 18 months up to
24 months.
USERRA continuation coverage requirements dictate an employee who has
coverage under an employer's health plan and is absent from work because of
service in the uniformed services is entitled to continue the employer-sponsored
health coverage during the leave of absence. Spouses and dependents may also elect
to continue. The additional months now allowed applies to elections beginning
on or after December 10, 2004. The law does not extend time for anyone with continuation coverage prior to that date.
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In addition, the law requires an employer to provide an annual notice of USERRA
rights and obligations to employees, which will be released by the Department of
Labor (DOL) by March 10, 2005. The notice can be distributed through a general
posting at the workplace along with other general notices to employees.
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The press release from the DOL states, "USERRA is intended to minimize the
disadvantages to an individual that occur when that person needs to be absent
from his or her civilian employment to serve in this country's uniformed services.
USERRA makes major improvements in protecting service member rights and benefits
by clarifying the law and improving enforcement mechanisms. It also provides
employees with Department of Labor assistance in processing claims. Specifically,
USERRA expands the cumulative length of time that an individual may be absent
from work for uniformed services duty and retain reemployment rights."
Employees who enter military service can automatically receive military health
benefits and enroll dependents in TRICARE coverage if serving at least 31 days.
However, the law offers the opportunity for the employees to continue on the
group health plan with their employer. Should the employee choose to take
TRICARE and the employer's group health plan, TRICARE is secondary to the
employer-provided health coverage.
"The law is intended to encourage noncareer uniformed service so that America
can enjoy the protection of those services, staffed by qualified people, while
maintaining a balance with the needs of private and public employers who also
depend on these same individuals," stated the DOL.
USERRA rules apply to all employers. Employers required to comply with federal
COBRA will need to offer COBRA and USERRA to fulfill both requirements. Prior
to the new law, they both offered the same time to continue on the group health plan.
The new law did not change federal COBRA time frames and therefore, COBRA will
offer 18 months while USERRA provides more time for the employee with 24 months of coverage.
Infinisource offers wording to include in Qualifying Event Notices for federal COBRA
coverage that includes information about USERRA. The information explains that if
military leave is less than 31 days, the employer may only charge the same amount
for the coverage as paid when an active employee. Once the leave is longer than 31 days,
the employer may charge up to 102 percent of the applicable premium. Should a client
have this event occur, please refer to the military leave event code when reporting the
information online.
USERRA is administered by the DOL, through the Veterans' Employment and Training Service (VETS).
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