USERRA Requires Health Coverage Options For Military Leaves

More military personnel are being called to active duty, leaving their civilian jobs and families behind. What responsibility with regards to health care coverage does the employer have to the service personnel leaving their employ for a tour of duty?

The Uniformed Services Employment and Reemployment Rights Act (USERRA) provides protection to employees who voluntarily or involuntarily leave employment positions for duty in the uniformed services. The final regulations, which went into effect on January 18, 2006, provide employers with direction on their responsibilities relating to departing and returning soldiers in practically every area of employment. This includes preserving seniority, hiring, promotion, health care, pensions, other benefits and notice requirements.

This is the second in a series of articles reviewing these regulations and will examine health plan coverage rights and responsibilities. For a review of responsibilities under seniority, hiring and promotions please refer to News Room article, USERRA Provides Reemployment Rights.

USERRA requirements provide that service members on military leave have the right to continue their existing employer-based health plan coverage. These provisions under USERRA are similar but not identical to COBRA. USERRA’s continuation coverage is not subject to the exceptions that are available under COBRA (e.g., employer size, governmental and church plans). In addition, the maximum period of continuation coverage is 24 months or the period of military service, whichever is less.

USERRA is unlike COBRA in that there are no specific requirements for electing, paying for or terminating continuation coverage. Each individual plan must determine what is reasonable and whether to apply rules. Plans are permitted to adopt rules that may include the same time frames as available under COBRA. Should a service member not provide a timely election, the election may still be considered valid if the reason for the late election was that it was impossible, unreasonable or precluded by military necessity. However, the employer

For military leaves of 30 days or less an employee is not required to pay more for health care coverage than what an active employee would pay. For leaves of 31 days or more the employee may be required to pay 102% of the cost of the health care coverage, similar to COBRA. The regulations do provide that plans may develop reasonable rules to permit termination of coverage if an employee elects but does not pay for continuation coverage. Plans may adopt COBRA-like procedures regarding timely payment of premiums for USERRA continuation coverage.

The final regulations confirm that pre-tax premium plans and health care flexible spending account plans are considered health plans under USERRA. This means that employees on paid military leave must be allowed to pay for health plan coverage and other health care expenses on a pre-tax basis while they are on leave.

Upon the return of the service personnel to civilian job duties, the employer may not impose an exclusion or waiting period in connection with reinstatement of coverage. An employer may allow but is not required to delay reinstatement of health plan coverage by the employee up to a date that is later than the employee’s reemployment date.

As with any procedures regarding health care coverage, USERRA information with regards to time frames and requirements should be placed in the plan document and/or summary plan description or similar documents provided to employees who start a military leave of absence.

For a comprehensive review of USERRA, consider joining our webinar titled, “A Call to Duty,” on Wednesday, April 12, 2006, from1:30 – 2:45 PM, EDT. This session will provide employers and agents/brokers with information to assist with compliance with these regulations, including a “reasonable procedures” document. Please contact our Seminar Department at 800-300-3838 for further details or visit our website to register.

The regulations are available on the Infinisource website under USERRA. Employers may also obtain detailed information about USERRA by calling 1-866-4-USA-DOL or by visiting www.dol.gov/vets/programs/userra/.

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