LAW REVIEW 1107
I Never Asked To Continue My Health
Insurance When I Left the Job To Serve
By Captain Samuel F. Wright, JAGC, USN
126.96.36.199—Health Insurance Reinstatement and
Q: I worked for
a large corporation when I was called to active duty in 2008. I notified my direct supervisor that I was
leaving the job for military service and that I did not need or want to
continue my health insurance coverage through my job while I was on active
duty, because I knew that I would have the military health care system for
myself and my family during my service.
I completed the involuntary call-up period and remained on active duty
voluntarily, and we are now approaching three years that I have been away. I don’t know if I will ever seek reemployment
with this company.
Just recently, the company sent me a bill for
thousands of dollars for health insurance coverage that I have not needed nor
used. I protested that I had notified my
direct supervisor that I did not want the health insurance and that I should
not be charged. The company responded,
saying that I was required to notify the company’s benefits department and that
notifying my direct supervisor was not enough.
I cannot afford to pay this bill, and I don’t think that I should have
A: The employer is clearly wrong, and you do not owe the
company for continuing health insurance coverage without your explicit request that
it be continued. The relevant subsection
of the Uniformed Services Employment and Reemployment Rights Act (USERRA) is as
follows: “In any case in which a person
(or the person’s dependents) has coverage under a health plan in connection
with the person’s position of employment, including a group health plan (as
defined in section 607(1) of the Employee Retirement Income Security Act of
1974), and such person is absent from such position of employment by reason of
service in the uniformed services, or such person becomes eligible for medical
and dental care under chapter 55 of title 10 by reason of subsection (d) of
section 1074 of that title, the plan shall provide that the person may elect to continue such coverage as
provided in this subsection. The maximum
period of coverage of a person and the person’s dependents under such an
election shall be the lesser of—(A) the 24-month period beginning on the date
on which the person’s absence begins; or (B) the day after the day on which the
person fails to apply for or return to a position of employment, as determined
under section 4312(e).” 38 U.S.C.
4317(a)(1) (emphasis supplied).
If you wish to continue your
health insurance coverage through your civilian job while you are away from
work for uniformed service, you must explicitly elect such continued coverage. In
other words, the default election is no coverage, not continued coverage. Of course, USERRA overrides and supersedes
any employer policy or practice or collective bargaining agreement to the contrary. See 38
USERRA provides as follows
concerning the cost of continued health insurance coverage: “A person who elects to continue health plan
coverage under this paragraph may be required to pay not more than 102 percent of the full premium under the
plan (determined in the same manner as the applicable premium under section
49808 of the Internal Revenue Code of 1986) associated with such coverage for
the employer’s other employees, except
that in the case of a person who performs service in the uniformed services for
less than 31 days, such person may not be required to pay more than the
employee share, if any, for such coverage.”
38 U.S.C. 4317(a)(2) (emphasis supplied).
For example, Army Reservist
Mary Smith works for the XYZ Corporation.
She has a husband and two children, and the four of them are covered by
her XYZ health insurance during her employment.
The health insurance coverage for the four persons costs $500 per
two-week pay period. XYZ pays $450 and
Mary herself pays the other $50.
Mary is going on annual
training with her Army Reserve unit, and that will require that she be away
from her civilian job for exactly one pay period. Because her period of service is scheduled to
last less than 31 days, Mary’s dependents are not entitled to military health
care coverage during this short period of service. Mary will not be paid by her civilian
employer during the two weeks that she is away from work for military training.
It makes sense for Mary to
elect continued coverage from XYZ during her two-week annual training tour, and
to pay the $50 employee share of the cost of the coverage. In the unlikely but certainly not
inconceivable event that her husband or one of the children needs medical care
during that period, having the XYZ coverage in effect will be necessary to pay
for the cost of that care.
Army National Guard member
Bob Jones also works for XYZ. He has
been called to active duty for a year, for deployment to Afghanistan. Bob has a wife and two children, and the four
of them are covered by his XYZ health insurance. The coverage costs $500 per pay period, and
Bob pays just $50 as an active employee.
Because Bob’s Army orders
call for more than 30 days of service, he, his wife, and the two children are covered
by the military health care system starting on the day he reports to active
duty. See 10 U.S.C. 1076(a)(2)(A).
Bob does not need XYZ health insurance coverage during the time that he
is on active duty, because he is entitled to utilize the military health care
system for himself and his family during that time. It would be foolish for him to pay $510 per
pay period (102% of the entire premium) for coverage that is essentially
equivalent to what he gets from the military for free.
Under section 4317(b) of
USERRA, Bob is entitled to reinstatement of
his XYZ health insurance coverage immediately upon his reemployment, after he
is released from the period of service.
There must be no waiting period and no exclusion of pre-existing conditions,
except for service-connected conditions for which Bob is entitled to coverage
from the military or the U.S. Department of Veterans Affairs. It is not necessary to continue the health insurance coverage during the service in order
to reinstate the coverage upon return
from service. See 20 C.F.R. 1002.168.
If Bob wants to continue his
XYZ health insurance coverage, he must specifically elect continued coverage. If
he elects the coverage, XYZ is permitted to charge him up to 102% of the entire
premium, including the part that the employer normally pays in the case of
active employees. It is unlawful for the
employer to assume that Bob wants the
continued coverage and to charge him for it.
Except in the most unusual circumstances, the employee who is leaving a
job for long-term (more than 30 days) military service neither needs nor wants
continued health insurance coverage through the civilian job.
Let us say that Bob’s family
lives in a small town with only two physicians, and neither of them is willing
to participate in the TRICARE military health care system. Maybe it is worthwhile to Bob to pay for
continued XYZ health insurance coverage, in order to ensure continuity of care
for his wife and children, but $510 per pay period is a lot to pay for
convenience. The wife and children will
probably be better off using TRICARE, even if they must travel some distance to
find a health care provider that participates in TRICARE.
USERRA does not supersede or override an
employer policy or practice or a collective bargaining agreement that provides greater or additional rights. Section 4317(a)(2) permits the employer to charge the absent employee up to 102% of
the entire premium. XYZ could choose to
offer Bob the continued health insurance coverage for no premium or for just
the usual $50 per pay period employee premium.
The National Committee for Employer Support of the Guard and Reserve
(ESGR) honors employers that go above and beyond the requirements of USERRA in
supporting employees who serve in the National Guard and Reserve.
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