Prospect of Military Build-Up Creates Benefits, Other Employment Issues

(Oct. 4, 2001) The prospect of Americans being called into military service in the aftermath of the Sept. 11 terrorist attacks raises issues of the employment and benefits rights of employees going on active duty. Certain employment and benefits rights were established or clarified under the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) as a result of the Persian Gulf War. These rights relate to workers leaving employment for non-career military service, as well as their return to work from service.

General

Individuals are protected from discrimination in employment and benefits for serving in the U.S. armed forces, which include the Army, Navy, Air Force, Marines, Coast Guard, Reserves, Army and Air National Guards, and the commissioned corps of the Public Health Service. USERRA covers voluntary and involuntary active duty, inactive training duty and National Guard training. Employees are covered upon enlisting or as reservists called to active or training duty.

Protected individuals are employees of all employers, including federal, state and local government employers as well as private sector employers and church plans. Employer obligations extend to successor employers as a result of mergers and acquisitions.

Employer and employee obligations and rights are triggered with the employee giving advance notice to the employer that he or she will be serving in the uniformed services. No special type notice is required (that is, written or oral) and no guidance exists on how far in advance notice must be given. Individuals are asked to give notice as soon as possible to enable the employer to prepare, unless advance notice is impossible. The employer is obligated to let the employee serve.

Employment

The employee is protected from discrimination upon applying to serve, even if he or she ultimately does not serve. These protections relate to prohibitions on the denial of:

Employment-related rights continue as long as the length of uniformed service does not go beyond five years in most situations, and the individual receives an honorable discharge. Also, the individual must apply for re-employment within certain time frames, depending on his or her length of service.

The individual must provide documentation of service.

Upon returning to the workforce, the individual is entitled to certain jobs depending on the length of service.

Individuals re-employed under USSERA may not be terminated except for cause within one year of re-employment if they served in the uniformed services more than 180 days. They may not be discharged without cause for 180 days if they served between 31 and 180 days.

Health Benefits

COBRA-like rules apply to health benefits when an individual leaves for service. Unlike COBRA, however, the rules apply regardless of employer size. Therefore, no exception exists for employers of less than 20 employees or church plans. The rules apply to all health plans, such as medical flexible spending accounts, vision and dental coverage.

The continued coverage ends on the earlier of 18 months or the day after the individual fails to return to work within the USERRA time frames. Individuals pay for coverage at a rate of 102 percent of the premium, just as under COBRA.

If military leave is for fewer than 31 days, the employer may not charge the individual or dependents any more than the premium charged, if any, to active employees.

Regardless of plan type, the plan is not responsible for treatment that the individual receives from the federal government for service-related illnesses and injuries.

Continued coverage is not required for other group welfare benefits such as group-term life, disability, cafeteria plan and other fringe benefits. The individual must be treated at least as well as anyone else on some other type of leave. For cafeteria plan benefits, an individual leaving for uniformed service would experience a status change, permitting mid-year election changes.

If the individual does not return to work, but is within the 18-month period of continuation coverage, he or she still is entitled to regular COBRA coverage for the balance of the period. For employers of fewer than 20 employees, no such COBRA obligation exists. [Note: The "COBRA" notice provided upon the individual's leaving employment for service should reflect this information.]

If an individual's health coverage ceases during the period of uniformed service, no exclusion or waiting period may be imposed on the employee or dependent upon returning to work. The plan still may impose exclusions and waiting periods regarding service-related illnesses and injuries.

Other Group Welfare Benefits

If the plan sponsor offers other benefits during non-uniformed service leaves of absence, those benefits must be offered on the same terms and conditions to individuals going into the uniformed services.

Upon his or her return to employment, the individual is entitled to all benefits he or she would have had if no leave occurred. Eligibility must be reinstated for cafeteria plans, group-term life, disability and other benefits.

Vacation

Employers may not require individuals going on uniformed service leave to draw down vacation time, and unused vacation must be restored upon the individual's return.

Conclusion

With the prospect of reservists and others being called up to serve, employers and other plan sponsors should review their policies, procedures and practices, and be prepared to accommodate those employees leaving for service.

Employers should inform employees of their rights and obligations. For example, plan sponsors should inform individuals of their responsibility to provide advance notice that they will leave for service. Notices of continuation coverage rights should be prepared, explaining employment and benefits protections, and individual obligations to preserve employment and benefits rights.

Excerpted from the October 2001 supplement to Employer's Guide to Self-Insuring Health Benefits,, ©Thompson Publishing Group, Inc., 2001. All rights reserved.

BenefitsLink is an independent national employee benefits information provider, not formally affiliated with the firms and companies who kindly provide much of the content and advertisements published on this Web site, including the article shown above.