You probably already know that the Uniformed Services Employment and Reemployment Rights Act (“USERRA”) generally requires an employer to restore an employee to his or her previous position of employment upon returning from military duty. But you may not be familiar with an employer’s obligations to an employee during the time that employee is away on military leave. In particular, what are your obligations as far as health benefits offered to employees?
Generally speaking, an employer is required to offer the same non-seniority rights and benefits to an employee on military leave that the employer offers to similarly-situated employees who are on a similar furlough or leave of absence.
As far as health plan coverage goes, USERRA requires that, if an employee has coverage in connection with his or her employment, the health plan must permit the employee to elect to continue the coverage for the lesser of 24 months following the date of absence for military service or from the date of absence for military service until the date the employee fails to return to employment following service. In addition, health plan administrators may impose reasonable requirements about how continuing coverage may be elected, consistent with the terms of the plan and USERRA’s exceptions to the requirement that the employee give advance notice of service in the uniformed services.
Although an employer is permitted to make the employee pay out-of-pocket for the costs of continuing health care coverage, the employee cannot be required to pay for the coverage out-of-pocket if the employee’s military service is for less than 31 days. In that case, the employee cannot be required to pay more than his or her regular employee share for coverage. If the military service is for 31 or more days, however, the employee may be required to pay no more than 102% of the full premium under the plan, which represents the employer’s share plus the employee’s share, plus 2% for administrative costs.
The employee may elect to discontinue coverage, however. In fact, this is likely, as the employee and his or her family will be covered by military healthcare for military service longer than 30 days, and an employee would probably not want to pay 102% of the full premium if free health care is available from the military. But, if the employee elects to discontinue coverage while on military leave, he or she must be permitted to resume coverage upon return from military leave without any exclusion or waiting period (other than for injuries or illnesses determined by the VA to have been incurred or aggravated during military service).
Keep in mind that USERRA sets a floor of minimum requirements. Employers are free to provide more generous coverage. If you do not have a military leave policy, you should consider drafting one. A lawyer who specializes in employment law can help ensure that your policy complies with both USERRA and any applicable state laws.