When an employee enters military service, an employer may choose to voluntarily continue health coverage for the employee. In this situation, the employer does not need to offer COBRA coverage. However, if the employer chooses not to voluntarily maintain health insurance when an employee is called to active military duty, the employee, spouse, and any dependents must be given the option to elect up to 18 months of COBRA health continuation coverage. The standard COBRA notice must be given in this instance. Premium charges are similar to usual COBRA premiums but if the affected employee serves in the military for fewer than 31 days, no more than the employee’s share of the premium may be charged.
An employer cannot cut off COBRA health coverage for employees, or their spouses and dependents, merely because activated military personnel receive health coverage as members of the armed forces or because the family members receive coverage through CHAMPUS. Also, persons covered under a plan by reason of an employee’s reinstatement after military service are not subject to waiting periods or exclusions.
Employees on military leave are entitled to participate in any rights and benefits not based on seniority that are available to employees having similar seniority, status, or pay who are on nonmilitary leaves of absence. Such rights and benefits might include year-end bonuses, insurance, accrual of sick or vacation days or any other benefit not based on length of employment that is available to other employees on leaves of absence.
Qualified pension benefits.
Under USERRA, veterans returning to employment from military service are entitled to the restoration of pension and profit-sharing benefits that would have accrued but for the employee’s military service. The reemployed veteran’s military service is also considered service with the employer for purposes of benefit accrual for vesting purposes.
Qualified retirement plans, including 401(k) plans, may allow veterans returning to employment from military service to make up employee contributions and elective deferrals that were not made during the employee’s period of military service without risking the disqualification of the plan for violating the limits on contributions and benefits applicable to qualified plans.
Qualified plans may also allow employers to make matching contributions at the rate that would have applied had the employee’s employment not been interrupted by military service.
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