Continuing Health Care Coverage Under COBRA Or USERRA During Military Leave

Published August 14, 2007

 

Last week, U.S. Defense Secretary Robert Gates did not dispute the prediction of Lieutenant General Raymond Odierno, commanding general of the Multi-National Corps-Iraq, that U.S. forces would be needed in Iraq "for a few more years."

That likely means that more troops will be headed overseas. If one of your employees is slated to ship out, it's imperative that you're well-versed in the employment rights of employees on military leave. One such right involves the election of health care continuation coverage.

Employees who go on military leave are entitled to elect to continue employer-provided health care coverage under:

• the Consolidated Omnibus Budget Reconciliation Act (COBRA), which applies to employers with 20 or more employees,
• the Uniformed Services Employment and Reemployment Rights Act (USERRA), which applies to all employers, or
• both COBRA and USERRA.

For employers with 20 or more workers, COBRA and USERRA run concurrently. Where the laws differ, you must apply the one most beneficial to employees.

Maximum Coverage

COBRA's typical maximum health care continuation coverage period is 18 months; under certain circumstances, that period may be extended to 29 or 36 months. USERRA's maximum continuation coverage period is 24 months. If an employee has been granted 18 months of COBRA coverage, applying the law most beneficial to employees does not mean extending coverage after COBRA expires by another 24 months. Here's an example of what it does mean.

In January 2005, Andrew is called to active duty and elects to continue health care coverage for himself and his wife under his company's medical plan. The plan is subject to COBRA. Andrew remains on military leave until September 2006. For the first 18 months (i.e., January 2005 - June 2006), Andrew and his wife have both COBRA and USERRA coverage. COBRA's 18-month maximum coverage period ends at the end of June 2006. So for the remaining three months, Andrew and his wife have USERRA coverage only.

Notification & Election Requirements

Other areas where the laws differ are notification and election of coverage. COBRA contains detailed guidelines on notice and election procedures; the U.S. Department of Labor provides model notices for COBRA. USERRA does not proscribe any such procedures; employers and plan administrators are taxed with developing reasonable procedures that are consistent with USERRA.

Where the laws run concurrently, you can satisfy both requirements by modifying your COBRA notice and election form to incorporate USERRA or by providing separate COBRA and USERRA documents.

If you decide to draft separate USERRA notices, you'll need a notice similar to the General Notice Of COBRA Continuation Coverage Rights that apprises employees of their right to elect health care continuation coverage under USERRA, and an election form similar to the COBRA Continuation Coverage Election Notice that employees can use to elect continuation coverage under USERRA. Attach each of them to the corresponding COBRA ones.

If you don't have the time to draft these notices yourself or the thought of doing so is overwhelming, check out AHI's Complete COBRA Compliance Kit, which contains an already written Model General Notice Of Health Care Continuation Rights Under USERRA and a Model Health Care Continuation Coverage Election Notice Under USERRA.

 

Related Topic(s): Benefits/COBRA - Consolidated Omnibus Budget Reconciliation Act, Leave/USERRA - Uniformed Services Employment and Reemployment Rights Act