Uniformed Services Employment and Reemployment Rights Act (“USERRA”), 38 U.S.C. §§ 4301 et seq.: the employee benefits aspects (Posted on October 8, 1998 by )

Carol V. Calhoun, Counsel
Venable LLP
600 Massachusetts Avenue, NW
Washington, DC 20001
Phone: (202) 344-4715
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Carol V. Calhoun

  1. Who is eligible for USERRA rights?

    1. The individual must hold or have applied for a civilian job. (Note: Jobs employers can show to be held for a brief, nonrecurrent period with no reasonable expectation of continuing for a significant period do not qualify for protection.)

    2. The individual must have given written or verbal notice to the civilian employer prior to leaving the job for military training or service except when precluded by military necessity.

    3. With limited exceptions, the individual must not have exceeded a 5-year cumulative limit on periods of service.

    4. The individual must have been released from service under conditions other than dishonorable.

    5. The individual must report back to the civilian job or submit a timely application for reemployment within certain limits set forth in the statute.

    6. USERRA applies to voluntary as well as involuntary military service, in peacetime as well as wartime.

    7. USERRA does not apply to state callups of the National Guard for disaster relief, riots, etc., although state law may provide certain rights in such situations.

    8. The employer is entitled to proof that military duty of 31 days or more for which an employee was granted a leave of absence was actually performed, upon the employer’s request.

  2. Employee benefits guaranteed by USERRA during military leave

    1. USERRA gives an employee the right to elect continued health insurance coverage, for himself or herself and his or her dependents, during periods of military service. For periods of up to 30 days of training or service, the employer can require the person to pay only the normal employee share, if any, of the cost of such coverage. For longer tours, the employer is permitted to charge the person up to 102 percent of the entire premium. If the employee elects coverage, the right to that coverage ends on the day after the deadline for him or her to apply for reemployment or 18 months after the absence from the civilian job began, whichever comes first.

    2. To the extent that an employer offers other non-seniority benefits (e.g., life insurance coverage) to employees on furlough or a leave of absence, the employer is required to provide those same benefits to an employee during a period of service in the uniformed services.

  3. Employee benefits guaranteed by USERRA upon reemployment

    1. The right to immediate reinstatement of civilian health insurance coverage for the employee and previously covered dependents. The health plan cannot impose a waiting period and cannot exclude the returning employee based on preexisting conditions (other than for those conditions determined by the Federal government to be service-connected). This right is not contingent on an election to continue coverage during the period of service.

    2. Credit for the period of military service for purposes of vesting, under either a defined benefit or defined contribution plan.

    3. Credit for the period of military service for purposes of benefit computations under a defined benefit plan.

    4. Make-up employer contributions for the period of military service under a defined contribution plan. However, earnings and forfeitures need not be made up. Moreover, to the extent that employer contributions are contingent on employee contributions, the employee would need to make the employee contributions in order to get the employer contributions.

    5. The repayment period for purposes of employee contributions or deferrals under the two preceding paragraphs is the period beginning with the date of reemployment and whose duration is three times the period of the person’s service in the uniformed services, such payment period not to exceed five years.

  4. Issues

    1. For periods of 30 days or less, employer can charge employee only normal employee’s premium for health insurance, not employer’s share. Are premiums paid under a pretax premium plan or flexible benefit plan “employer” or “employee” premiums for this purpose?

    2. Does the answer to the above question vary depending on whether the plan is salary reduction, or involves a bonus which can be applied to health insurance and/or flexible benefits in lieu of taking the cash?