Must benefits be provided during military leave?
Employees on military leave are entitled to participate in any rights and benefits not based on seniority that are available to employees having similar seniority, status, or pay who are on nonmilitary leaves of absence. Such rights and benefits might include year-end bonuses, insurance, accrual of sick or vacation days, or any other benefit not based on longevity of employment that is available to other employees on leaves of absence.
What if a new benefit is introduced while an employee is on military leave? Leave-of-absence rights and benefits to which persons on military leave are entitled include not only those available at the time their military service begins, but also any that become effective during their military service. If there is a variation among rights and benefits of different types of nonmilitary leaves of absence, the most favorable treatment must be provided to employees on military leave. However, persons on military leave are not entitled to leave-of-absence rights and benefits greater than those they would have had if they had remained continuously employed.
Can employees on military leave be required to pay for their benefits? Employers can require employees to pay for these benefits during military leave. However, this is true only to the same extent that other employees on leave of absence are required to pay.
Is health plan continuation coverage available? USERRA gives employees on military leave a right to COBRA-like health benefit continuation, even if their employers are not covered by COBRA. (COBRA exempts employers with fewer than 20 employees.) If health plan coverage of an employee or the employee's dependents would otherwise end because of the employee's military leave, the employee may elect to continue the coverage for up to 24 months.
How much does the employee pay? An employee who elects to continue coverage cannot be required to pay more than the normal employee share of any premium if the employee's military service is 30 or fewer days. If the employee's service is 31 or more days, the employee can be required to pay no more than 102 percent of the full premium for coverage.
Can continuation coverage be cancelled if the employee is eligible for CHAMPUS? An employer cannot terminate continuation of health plan coverage on the basis of a service member's eligibility for coverage of dependents under the Civilian Health and Medical Program for the Uniformed Service.
Can waiting periods and exclusions apply upon reemployment? USERRA bans the imposition of an exclusion or waiting period upon persons reemployed after military leave or their dependents. An exception to this ban applies to service-connected injuries or illnesses.
Health plan administrators. Health plan administrators may develop reasonable requirements about how to elect continuing coverage and make premium payments. Plans may also adopt reasonable rules to permit termination of coverage if an employee elects, but does not pay for, continuation coverage. Where plans are covered by COBRA, it may be reasonable to adopt COBRA rules concerning election and payments as long as the plan complies with USERRA requirements.
Termination of coverage. Employers may cancel an employee's health insurance if the employee departs work for military service without electing continuing coverage, but must retroactively reinstate the insurance without an administrative fee if the employee is excused from giving advance notice of service. If an employee whose period of service is in excess of 30 days provides notice but does not make an election, the plan administrator may cancel coverage upon the employee's departure for service, but must reinstate coverage without an administrative fee if the employee elects coverage and pays all unpaid amounts due within the periods established by the plan (if the plan has reasonable election rules) or by USERRA (if the plan does not have election rules).
What about pension rights? Pension rights that are based on length of service continue to accrue while an employee is on military leave. Employers are obligated to continue making pension contributions on behalf of employees on military leave if the pension plan requires such employer-provided contributions based on length of service.
Upon reemployment, a returning service member can repay employee contributions to profit sharing plans and other plans funded by individual employee contributions can over a period of time that is three times the duration of the military service (up to five years).
Employer contributions to a pension plan that are not dependent on employee contributions must be made the later of ninety days following reemployment or when contributions are normally made for the year in which the military service was performed. In some cases involving an extended period of service, both timeframes may apply.
What about other benefits? Pay increases, vacations, and other benefits that would have accrued while a service member is on leave must be given to a service member upon return from active duty. Employees may elect to take paid vacation time during the period of military leave.
What if the company is sold? If a business is sold or otherwise changes ownership, the new employer has the same service member reemployment obligations as the prior employer.