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| Posted on: Thursday, January 12, 2006 |
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In December 2005 the Department of Labor issued the final regulations for the Uniformed Services Employment and Reemployment Rights Act (USERRA) that are effective 1/18/06. USERRA offers employees called to active duty for more than 30 days the opportunity to elect to continue employer sponsored health care for up to 24 months, for which they may be charged up to 102% of the premium. Employees called to duty for less than 30 days must be provided health care coverage as if the member had remained employed, without the additional 2% fee. USERRA continuation of coverage must be made available to employees even if their employer may otherwise be exempt from COBRA, for example, on the basis of the small-employer exemption. The returning employee, including their enrolled family members, is entitled to immediate reinstatement into the health plan. Immediate reinstatement includes no waiting period or pre-existing condition exclusions
(except for conditions that US. Dept of Veterans Affairs has determined to be service-connected).
Per the final regulations, below are the key provisions that pertain to
Group Health Plans:
1. Canceling Health Coverage
a. Plans may impose rules of timely payment and may cancel continuation
coverage if payment is not received in the timeframe outlined by the plan.
b. Continuation coverage can be canceled if the employee fails to provide
notice of departure and also fails to elect continuation coverage. One
exception, if the employee’s failure to provide notice of departure is
excused as outlined in the regulations (military necessity, impossibility,
or unreasonableness), the employee can be reinstated retroactively if all
premiums (without the administrative 2% fee) are paid to date.
c. Continuation coverage may also be canceled if the employee notifies the
Employer of military duty exceeding 30 days but fails to elect continuation
coverage by the plan’s specified election date. If the plan does not have a
specified election date, the employee has an election period, which is
equal to the maximum coverage period under USERRA. As this is likely
much greater than any election date outlined in the Plan, it is advisable to
explicitly state this deadline.
2. COBRA Rules
a. It is recommended that health plans that are subject to COBRA
also adopt the COBRA election and payment period timeframes (as long
as they don’t conflict with number 1 above).
3. Third-Party Administrator (TPA), Employer and Insurer Liability
a. The final regulations have issued a revised definition that states any
entity that the employer has delegated administrative duties to be exempt
from such liability. The definition does include TPAs and Insurers so that
such entities cannot refuse to modify their policies in order for the
employers to comply with the USERRA requirements.
4. Dependents and Retirees
a. The final regulations do not apply to service members that are retirees or
dependents of a covered employee. Although the regulations do state
that such individuals may be entitled to reinstatement under the Service
members Civil Relief Act (SCRA).
5. Cafeteria Plans
a. Cafeteria plan (payment of health plan and health FSA premiums) rules
will not be violated if the plan allows for a new election either upon
leaving or returning for employment due to military service.
For a copy of the final regulations issued by the Department of Labor, click on the following link: http://edocket.access.gpo.gov/2005/pdf/05-23961.pdf .
Notification Requirement
As of 3/10/05 the Veterans Benefits Improvement Act required employers to provide notice to all persons entitled to rights and benefits under USERRA. On 12/19/05, final notification requirements and employer notices were issued and take effect on January 18, 2006. The notice has been slightly revised from the interim notice. The new notices have been issued in two versions, one for the private sector and one for federal government employers. The notices have been revised to now clarify the following:
1. Certain types of service in the National Disaster Medical System
are considered to be uniformed service covered by USERRA, and
2. The USERRA complaints received by the DOL may be referred to the Office
of Special Counsel for resolution.
The Department of Labor’s recommended notices/posters containing the required information can be found at the following links:
Private Sector Employees: target=_blank class=special4>http://www.dol.gov/vets/programs/userra/USERRA_Private.pdf and
Federal Government Employees: http://www.dol.gov/vets/programs/userra/USERRA_Federal.pdf.
As before, employers may include USERRA information in their Plan Documents, but they must also provide or post the USERRA notice by one of the following methods:
1. Posting the notice in a place where employees customarily check for
such information. (i.e. where employees would find other Federal and State
mandated posters. This is the DOL preferred and recommended method.)
2. Hand delivering the notice to all employees,
3. Mailing the notice to the employee’s home address, or
4. Delivering the notice electronically (must meet e-delivery guidelines)
Should you have any additional employee benefit questions or would like to discuss this material in detail, please don’t hesitate to call the Denman Team.
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