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USERRA Rule Relaxes Time Requirements

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The U.S. Department of Labor has eased some standards in the final version of the long-awaited regulations that will implement the Uniformed Services Employment and Reemployment Rights Act of 1994.[@@]

The law requires employers of all sizes to hold the jobs of employees out on military leave open for at least 5 years.

USERRA also requires employers to reinstate full seniority and retirement benefits for returning “citizen soldiers,” and it requires employers to offer some health coverage continuation benefits for employees on military leave and their dependents.

Although the law was enacted in 1994, the U.S. Department of Labor did not draft regulations to implement USERRA until September 2004.

The new final rule, which takes effect Jan. 18, 2006, makes many complicated changes in pension rights.

One section of USERRA requires employers to make up for any skipped defined benefit plan contributions and defined contribution plan matching contributions once employees return from military leave.

A major revision to the USERRA draft rule would extend the employer’s plan contribution payment period to 90 days “or when contributions are normally made for the year in which the military service was performed, whichever is later,” Labor Department officials write in the preamble to the rule.

Previously, Labor Department officials had proposed giving employers only 30 days to make up for skipped plan contributions.

The health benefits section of the USERRA final rule gives employers help with setting advance notice requirements for employees who want to continue health benefits while on military leave.

Although employers can set notice requirements, they must be prepared to reinstate health coverage retroactively for citizen soldier employees whenever meeting notice requirements would be “impossible, unreasonable or precluded by military necessity,” officials write.

Labor Department officials have refused to let employers justify delays in reinstatement of health coverage by pointing to health carrier exclusion or waiting period rules.

“Employers that utilize third-party insurance plans to provide health coverage for employees are obliged to negotiate coverage that is compliant with USERRA to avoid possible liability for failure to properly reinstate coverage upon reemployment,” officials write.

The legislative history suggests that, in some cases, “an insurance company could be considered an employer under USERRA,” officials write.

Officials point out that USERRA applies only to employer-sponsored health plans, but they note that another law, the Servicemembers Civil Relief Act, may create health coverage reinstatement rights for members of the Guard and Reserve who get health coverage through associations or through their spouses’ employers.

A copy of the final version of the regulations is on the Web at //


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