Q&A: Handling Medical Benefits for Military Leave Under USERRA

Question:

We have an employee who is a member of the National Guard and will be taking a short leave to participate in training. I am trying to determine how to handle his medical benefits while he is out on leave.

My understanding is that he needs to keep these benefits for leaves that are 30 days or less, but if he is gone longer than that we will need to terminate his medical benefits and offer COBRA. Once he returns, we would then reactivate his benefits.

Is my understanding correct?

Answer:

Your obligations in this situation are governed by the requirements of the Uniformed Services Employment and Reemployment Rights Act (USERRA). I can’t find anything in the USERRA regulations that specifically says an employee in this situation “needs to keep his medical benefits for 30 days.” They just require the employer to pay its share of the premiums for 30 days, as if assuming the employee will want to keep his benefits.

USERRA regulations have a lot of gaps, especially when it comes to how the law interacts with the IRS’s rules regarding when benefits elections can be changed. The resource I use for researching these types of issues suggests treating USERRA leave like FMLA leave when it comes to those gaps. Under FMLA, the qualifying changes in status (allowing an employee to drop or add coverage) would happen at the beginning of the leave and again at the end of the leave. So, in the absence of a definitive answer, I think an employer:

1. Would be safe in allowing employees taking USERRA leave to drop health coverage(s) if they want, and
2. If an employee’s leave is less than 31 days, be required to keep his health coverage in place and pay the same amounts toward the premiums as for any other employee. (Note that for this purpose, “health coverage” includes medical, dental, vision, and health FSAs.) 
3. Should allow employees to re-enroll when they return from leave.

However, I recommend discussing with your attorney to be certain.