New Employee Benefits Rights for Veterans

President Bush has signed into law the Veterans Benefits Improvement Act of 2004 (the “Act”). The Act extends the required period of group health plan continuation coverage provided for under the Uniform Services Employment and Reemployment Rights Act of 1994 (“USERRA”) and includes a new notice requirement for employers.

Under USERRA, an employee who is absent from employment for uniformed service has the right to elect continuation coverage for up to 18 months. The Act extends the required period to 24 months with respect to elections made on or after December 10, 2004. In addition, the Act requires employers to notify employees of their rights and obligations under the law using a notice to be issued by the Department of Labor by no later than March 10, 2005. Employers will be able to satisfy the requirement by posting a new notice in the workplace.

The changes brought about by the Act may cause some confusion for plan administration because the 24-month continuation coverage right will not mirror the usual 18-month continuation coverage right under COBRA. Employers will also have another notice to post conspicuously in the workplace. In addition, if your plan document makes any specific reference to the 18-month period for military leave, it should be amended, and the summary plan description revised accordingly.