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U.S. Department of Labor
Employee Benefits Security Administration
December 2007
Reserve and National Guard units called to active duty
have rights with respect to the retirement and health benefits provided by
their private-sector employers as they prepare to be deployed. This fact
sheet provides questions and answers for reservists about their rights
protecting their retirement benefits and the health benefit options
available to their family members to maintain health coverage during the
time of active duty.
The Department of Labor’s Employee Benefits Security
Administration (EBSA) administers the laws related to private sector
employee benefit plans, including the Consolidated Omnibus Reconciliation
Act (COBRA), the Health Insurance Portability and Accountability Act (HIPAA)
and the Employee Retirement Income Security Act (ERISA). In addition, the
Department of Labor’s Veterans’ Employment and Training Service can
provide information on the Uniformed Services Employment and Reemployment
Rights Act (USERRA), which provides reservists with many rights beyond those
related to employee benefits.
The Department of Labor's Veterans' Employment and
Training Service (VETS) has information for veterans, National Guard, or
reservists who may be activated for military service. National Guard and
reserve members called to active duty, and their civilian employers, have
certain rights and responsibilities under the Uniformed Services Employment
and Reemployment Rights Act (USERRA). VETS has developed a fact sheet and an
interactive computer program, the USERRA Advisor, which address the rights
and responsibilities of individuals and their employers under the law. These
tools, and other USERRA information, can be found on the VETS Web site at
www.dol.gov/vets.
If you are on active duty for more than 30 days, you and your dependents
should be covered by military health care. For more information on these
programs contact your military unit.
In addition, two laws protect your right to continue health coverage
under an employment-based group health plan. The Consolidated Omnibus Budget
Reconciliation Act (COBRA) provides health coverage continuation rights to
employees and their families after an event such as a reduction in
employment hours. USERRA is intended to minimize the disadvantages that
occur when a person needs to be absent from civilian employment to serve in
the uniformed services.
Both COBRA and USERRA generally allow individuals
who leave work for military service to continue coverage for
themselves and their dependents under an employment-based group health
plan. COBRA provides for 18 months of coverage, with further
extensions for certain events. COBRA applies to group health
plans maintained by employers with 20 or more employees. USERRA,
which applies to all employers, provides for 24 months of
coverage. If military service is for 30 or fewer days, you and
your family can continue coverage at the same cost as before your
short service. If military service is longer, you and you family
may be required to pay as much as 102 percent of the full premium for
coverage. If your plan is covered by COBRA, you should receive a
notice from the plan explaining your rights.
Finally, another law known as the Health Insurance Portability and
Accountability Act (HIPAA) may give you and your family rights to enroll in
other group health plan coverage if it is available to you (for example, if
your spouse's employer sponsors a group health plan). You and your family
have this opportunity to enroll regardless of the plan's otherwise
applicable enrollment periods.
However, to qualify, you must request enrollment in the other plan (for
example, your spouse's plan) within 30 days of losing eligibility for
coverage under your employer's plan. After special enrollment is requested,
coverage is required to be made effective no later than the first day of the
first month following your request for enrollment. If you are on active duty
more than 30 days, coverage in another plan through special enrollment is
often cheaper than continuation coverage because the employer often pays a
part of the premium.
Note: When considering your health coverage options, you should examine
the scope of the coverage (including benefit coverage and limitations, visit
limits, and dollar limits), premiums, cost-sharing (including co-payments
and deductibles), and waiting periods for coverage.
Yes. You and each of your dependents have a separate,
individual right to elect continuation coverage.
Yes. COBRA continuation coverage cannot be terminated
because a reservist receives health coverage as an active duty member of the
uniformed services and a reservist's family receives health coverage under a
government program such as TRICARE.
Under USERRA, you and your family should be able to
reenter your employer's health plan. In addition, your plan generally cannot
impose a waiting period or other exclusion period if health coverage would
have been provided were it not for military service. The only exception to
USERRA's prohibition of exclusions is for an illness or injury determined by
the Secretary of Veterans Affairs to have been incurred in, or aggravated
during, performance of service in the uniformed services, which is covered
by the military health plan.
For more information on your health benefits rights and
options, and the interaction of COBRA and HIPAA, find to the following
publications on the EBSA Web site at www.dol.gov/ebsa under Publications:
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Your Health Plan and HIPAA...Making
the Law Work for You
-
An Employee's Guide to Health
Benefits Under COBRA
-
Retirement and Health Coverage -
Q&As for Dislocated Workers
You may also call EBSA's toll-free number at
1.866.444.EBSA (3272) to request one or more copies of the publications or
to speak with a benefits advisor. You may also contact EBSA electronically
at www.askebsa.dol.gov.
Additional health information for military personnel and
their families is also available at:
-
IRS Notice 90-58: Continuation of
Employer Health Coverage for Activated Reservists and Their Families at
www.dol.gov/ebsa/pdf/irs90-58.pdf
-
DefenseLINK News: Mobilized Reservists
May Retain Employers' Family Health Care at www.defense link.mil/news
-
TRICARE Offers Benefits to Activated
Reservists and National Guard Members at www.tricare.osd.mil/reserve
-
Frequently Asked Questions on TRICARE
at www.tricare.osd.mil/frequentlyaskedquestions
For information on USERRA, contact the Department of
Labor's Veterans' Employment and Training Service (VETS) office nearest you.
Find the office on the VETS Web site at www.dol.gov/vets.
You can also visit the USERRA Employee/Employer Advisor
on the VETS Web site. This interactive program has been designed to answer
questions about the rights and responsibilities for both employees and
employers.
No. USERRA requires that the period of military duty be
counted as covered service with the employer for eligibility, vesting, and
benefit accrual purposes. Returning service members are treated as if they
had been continuously employed regardless of the type of retirement plan the
employer has adopted. However, a person who is reemployed is entitled to
accrued benefits resulting from employee contributions only to the extent
that he or she actually makes the contributions to the plan.
There is no requirement for your employer to make
contributions to your 401(k) plan while you are on active duty. However,
once you return from military duty and are reemployed, your employer must
make the employer contributions that would have been made if you had been
employed during the period of military duty. If employee contributions are
required or permitted under the plan, the employee has a period equal to
three times the period of military duty or 5 years, whichever ends first, to
make up the contributions. If the employee makes up the contributions, the
employer must make up any matching contributions. There is no requirement
that the employer contributions include earnings or forfeitures that would
have been allocated to the employee had the contributions been made during
their military service.
The terms of the plan would generally govern this
situation. However, if some employees are permitted to designate individuals
to act on their behalf in other contexts when they are away from work, the
employer should permit the service member to designate someone to act on his
or her behalf.
The Thrift Savings Plan Web site at www.tsp.gov provides
information about the benefits available to TSP participants. Members of the
uniformed services will participate under most of the same rules and receive
the same benefits as civilian TSP participants. However, the contribution
rules are different for uniformed services members.
Because the TSP record keeper must maintain separate
accounts for civilian and uniformed services participants, participants who
are both Federal civilian employees and uniformed services members (i.e.,
reservists) may have two separate accounts. If you have two accounts, you
will need to review information about your accounts separately in the
civilian and the uniformed services sections of this Web site.
A booklet entitled Summary of the Thrift Savings Plan for
the Uniformed Services is available on the TSP Web site.
Yes. Under the Soldiers’ and Sailors’ Civil Relief
Act (SSCRA), creditors, including a pension plan, are required to drop
interest rates down to no more than 6 percent on debt owed by those entering
military service for the period of such military service. Further, under the
Employee Retirement Income Security Act (ERISA), the loan will not fail to
be a qualified loan under ERISA solely because the interest rate is capped
by SSCRA. Under SSCRA, a plan fiduciary could petition a court to retain a
higher rate based upon the individual's ability to pay. Under USERRA, a plan
may, but is not required to, suspend the obligation to make regular loan
repayments to the plan during the period of active military service.
A plan fiduciary could petition a court to retain a
higher rate based upon the individual's ability to pay. Absent an order from
the court, however, the plan fiduciary would be obligated to reduce the
interest rate.
For more information about retirement benefits, you may
obtain copies of the publications mentioned by calling the EBSA toll-free
number at 1.866.444.EBSA (3272) or visiting EBSA’s Web site at www.dol.gov/ebsa.
If you have questions, you can call the toll-free number or contact EBSA
electronically at http://askebsa.dol.gov. For tax-related questions,
visit the Internal Revenue Service Web site at www.irs.gov/retirement and
look under EP FAQs.
This fact sheet has been developed by the U.S. Department
of Labor, Employee Benefits Security Administration, Washington, DC 20210.
It will be made available in alternate formats upon request: Voice phone:
202.693.8664; TTY: 202.501.3911. In addition, the information in this fact
sheet constitutes a small entity compliance guide for purposes of the Small
Business Regulatory Enforcement Fairness Act of 1996.
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