December 2004

Amendment to USERRA Creates new employer obligations

DEC. 27, 2004 — Changes in the Uniformed Services Employment and Reemployment Rights Act (USERRA), signed into law by President Bush, affect the responsibilities of employers toward returning veterans.

The Act extends the maximum period for which an employee may elect to continue employer-sponsored health insurance coverage from 18 months to 24 months. Under USERRA, 38 USC 4317(a)(1), an employee who has coverage under an employer's health plan and is absent from work because of service in the uniformed services is entitled to elect to continue his or her employer-sponsored health insurance coverage during the absence, even if the employer is not covered by COBRA.

The maximum period of coverage for such an employee and that employee's dependants is now the lesser of 24 months beginning on the date the employee's absence began or the day after the date on which the employee fails to apply for or return to a position of employment.

Under USERRA, an employee who elects to continue employer-sponsored health insurance coverage cannot be charged more than 102 percent of the full premium under the plan. However, an employee who is absent from work because of service in the uniformed services for less than 31 days cannot be charged more than the employee share, if any, for the coverage. This amendment applies to elections made under section 4317 on or after December 10, 2004.

The Act also amends USERRA by adding a new section, 4334, which requires employers to "provide to persons entitled to rights and benefits under [USERRA] a notice of the rights, benefits and obligations of such persons and such employers."

Employers can meet the notice requirement by posting the notice where they customarily place notices for employees. Within 90 days, the Secretary of Labor will make available to employers the text of the notice required by the Act. Employers will be required to post the notice as of March 10, 2005.

Source: Ford & Harrison, http://www.fordharrison.com.

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