The Veterans’ Employment and Training Service has proposed the first major, official guidance for users of the federal law that protects returning reservists’ jobs and benefits.[@@]

The law, the Uniformed Services Employment and Reemployment Rights Act of 1994, requires private employers of all sizes to give reservists’ families a chance to buy continuation health coverage while the reservists are away for periods of up to 5 years.

USERRA also requires employers to hold jobs open for reservists and offer returning reservists the same salary increases, health benefits and retirement benefits that the reservists would have earned if the reservists had stayed home rather than taking military leave.

The same USERRA provisions apply to employees who are not in the reserves but decide to sign up for regular active-duty military service.

Officials at VETS, an arm of the U.S. Department of Labor, emphasize in the introduction to a discussion of the proposed regulation that employers and others governed by USERRA are supposed to continue to follow the spirit of the U.S. Supreme Court’s admonition about prior veterans’ rights laws.

“This legislation is to be liberally construed for the benefit of those who left private life to serve their country in its hour of great need,” VETS officials write, quoting from a 1946 Supreme Court ruling.

VETS officials have published the proposed USERRA regulation today in the Federal Register.

One major section deals with health benefits rights and another major section deals with rights related to 401(k) plans, defined benefit pension plans and other retirement plans.

The health insurance section of the proposed USERRA regulation notes that USERRA cannot help soldiers and their families continue or get back individual health insurance coverage or coverage purchased through associations, clubs or other family members’ employers.

But USERRA health benefits rules apply to the insurance companies and third-party administrators that help employers supply health coverage as well as to the employers themselves, VETS officials write.

Multiemployer plans must offer USERRA continuation coverage to active-duty military personnel even if the employer that originally sponsored the insureds’ coverage drops health coverage for all of its employees.

When veterans return to work, employer-sponsored plans may be able to impose exclusions or waiting periods for injuries or illnesses determined by the federal secretary of Veterans’ Affairs to have been incurred or aggravated during service, according to the discussion of the proposed USERRA regulation that appears in the Federal Register.

But, for returning veterans and dependents with conditions that were not incurred or aggravated during service, exclusions and waiting periods are prohibited, the VETS officials write.

The proposed regulation also gives rules for determining how and when returning veterans must make up missed 401(k) plan payments and how employers should calculate compensation rates for veterans who depended mainly on tips and commission income before they went on active duty.

A provision in a section on “Furlough or Leave of Absence” says employers must provide for continuation of benefits such as life insurance as if activated employees were on some kind of ordinary leave. If the employer offers several types of leave, then the employer must base continuation provisions for the “non-seniority benefits” on the terms governing the “employer’s most generous form of comparable leave.”

Public comments are due Nov. 19.

VETS has posted more information about proposed regulation at http://a257.g.akamaitech.net/7/257/2422/06jun20041800/edocket.access.gpo.gov/2004/pdf/04-20844.pdf