If the employee’s military leave is for 30 days or less, then an employer does need to continue health benefits as if the employee is actively working. If the employee’s military leave is for a period of 31 days or more, the employer is able to terminate benefits and offer COBRA-like benefits. The benefits cannot cost more than 102% of total premium cost per month, similar to other COBRA events, but USERRA requires that coverage be provided for up to 24 months. Section 1002.163.
USERRA provides for the continuation of health benefit coverage for persons who are absent from work to serve in the uniformed services. The Veterans Benefits Improvement Act of 2004 (VBIA), P.L. 108-454, amended Section 4317(a)(1)(A)of USERRA to provide that if a person’s employer-sponsored health plan coverage would terminate because of an absence due to uniformed service, the person may elect to continue that coverage for up to 24 months after the absence begins, or the period of absence, whichever is shorter. The person cannot be required to pay more than 102% of the full premium for the coverage — if the uniformed service was for 30 or fewer days, the person cannot be required to pay more than the normal employee share of any premium.
On return from service, health insurance coverage must be reinstated without any waiting period or exclusions for preexisting conditions, other than waiting periods or exclusions that would have applied even if there had been no absence for uniformed service. This rule does not apply to the coverage of any illness or injury determined by the Secretary of Veterans’ Affairs to have been incurred in, or aggravated during, performance of service in the uniformed service. See 20 CFR Part 1002.168.
USERRA requires that, for purposes of nonseniority benefits, an employee who is on leave for military service should be treated the same as an employee on a leave of absence. For example, if an employer allows employees on other extended leaves of absence to receive holiday pay, accrue vacation or continue disability or life insurance benefits, the employer must offer the same benefits to employees on military leave. Vacation-leave benefits are considered nonseniority benefits, meaning that employees are permitted to accrue vacation while on military-service leave if an employer allows other employees who are out on leave to accrue vacation benefits.
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