Employee Health Benefits And Military Leave: It s About Planning

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1 Employee Health Benefits And Military Leave: It s About Planning JENNIFER H. KEATON and WILLIAM D. DEVENEY Ellarbee, Thompson, Sapp & Wilson, LLP Federal and Georgia laws have long protected employees who leave civilian employment for temporary, non-career military duty. These laws attempt to minimize the disruptions caused by military leave by protecting these employees employment, seniority, and benefits. Though Georgia s law differs from the federal Uniformed Service Employment and Reemployment Rights Act ( USERRA ), both laws generally complement each other in their application to affected employees and cover health benefits provided by civilian employers. County government compliance with military leave laws, as they apply to health benefits, can be procedurally difficult and even counter-intuitive. This article addresses good practices toward promoting legal compliance with health benefits issues for employees that take and return from military leave. Notice that an Employee Will Perform Military Service Generally, it is a manager or Human Resources officer who receives a call or a letter from an employee that military service or service related to their reserve status requires him or her to be absent from work. The time required for such service should be approved as military leave, contingent upon determining that the employee and the leave are covered by the Georgia law and/or USERRA. Remember that military service covered by these laws includes not only active duty, but also training, certain medical evaluations and travel time, and at least eight hours of rest time after such service. Due to the breadth of items that are deemed military leave, counties should classify military leave carefully; a failure to properly record military leave may lead to subsequent violations of military leave laws. Counties may not choose, unilaterally, to record military leave as sick leave, holiday leave, vacation time or some other form of leave for its employees. The employee, however, may choose to utilize other forms of leave available instead of military leave. This option, at the behest of the employee, often will be important for potential use for making health insurance premium payments, as discussed below. Counties should include any written notice, copies of military orders, s, or documentation of verbal notice that an employee needs military leave in the employee s personnel file. Additionally, it is a good practice for a county to document its understanding of the circumstances regarding the need for military leave and send a copy to the veteran. Such correspondence should: identify the county s understanding of when and how the notice was provided, identify when the last day of work before military 1

2 leave is anticipated to occur, indicate that the leave is related to military service, indicate what military pay, as prescribed by Georgia law, will be received, indicate the anticipated length of military leave; and state that any misunderstanding or changes in circumstances, before or after military leave begins, should be discussed as soon as practicable with a designated county employee. Where arrangements regarding the employee s contributions to certain benefits or premium payments for health insurance, for example, have been established with the county, this information also should be documented. Ultimately, a copy of such correspondence should be shared with all affected supervisors and filed in the employee s personnel file. Health Insurance Benefits of Employees on Military Leave Automatic Continuation vs. Specific Waiver of Coverage. When an employee s military service is less than thirty-one (31) consecutive days in length, the status of that employee s health benefits must be treated as if he or she had never taken leave. When an employee s military leave is over thirty (30) consecutive days in length, however, the employee on leave may continue health benefits following guidelines nearly identical to COBRA after the thirtieth day of leave. Under USERRA, unless the employee expressly waives or declines continuing coverage (unlike COBRA where continuing coverage must be elected), health insurance must be continued automatically. This continuing coverage is guaranteed for up to 18 months for the employee on leave and any dependents that were covered by the plan. Where an employee on leave would have become eligible for health benefits but for the military leave, the process is slightly different. If the waiting period for eligibility for benefits is likely to be satisfied while the employee is on military leave, the county should attempt to obtain an application for or a waiver of these health benefits from the employee before the start of military leave or deployment. If no application for the benefits is obtained, then the employee on leave will not be entitled to the coverage, just like employees who do not take military leave. These changes should be communicated promptly to the insurance carrier. Payment for Continued Health Insurance Benefits. Health benefits typically are available to soldiers on active duty through the military at no cost or at a slight cost during a tour of duty. Therefore, employees that take extended military leave may discontinue the County s health benefits because the military benefit is duplicative. Further, they also may discontinue their health benefits because 2

3 the costs associated with the continuing coverage may be substantial. Not all employees on leave, however, will waive continued benefits and it will be important for counties to communicate with their employees affected by military leave regarding the decision regarding continuing coverage. A county s legal obligation to its employees on military leave is to ensure that continuing coverage occurs, if such continuation has not been declined. If the employee on leave does not waive his or her health benefits upon military leave, the cost of continuing county health benefits during military leave could be as much as 102 percent of the monthly premiums. The employee on leave, however, is not required to pay the premiums during military leave. As such, the county may be responsible for satisfying those payments during the military leave. The employee on leave or who has returned from leave, under USERRA and Georgia law, may make up these payments after they return from military service. Such make up payments may include reimbursement. How premium payments are handled may be specific to the insurance carrier s administrative process. Therefore, Counties should consider utilizing a form regarding electing or waiving benefits that also incorporates the administrative procedures of their particular carrier for premium payments during military leave. Employees on military leave are still entitled to certain compensation under Georgia law. Georgia requires that most military leave be paid for up to eighteen (18) days per federal fiscal year (October 1 through September 30) for days spent in this service. 1 If the Governor of Georgia declares an emergency and orders a county employee in the National Guard to military duty, the county must pay the Guardsman s salary or other compensation up to and including 30 days during any federal fiscal year, while performing such duty for the state. 2 USERRA has no similar compensation component. Under Georgia law, an employee on military leave not only receives limited compensation, but also may choose to contribute to health insurance premium payments during his or her military leave period for continuing coverage from that compensation. As such, Counties, where possible and relevant, should discuss payment options with the employee before the start of any extended military leave period. These discussions should include discussions concerning the strategic use of their military leave compensation, and any other forms of paid leave to which they are entitled, for continued health insurance payments. Counties should designate an individual to coordinate payroll processes to ensure that military leave compensation is properly calculated, recorded, and paid. This individual may be best poised to discuss required (e.g., taxes) and voluntary deductions (e.g. employee contributions to benefit plans) from this compensation. For example, an opportunity exists for an employee on leave s premium payments for continuing health insurance to be deducted from this military leave compensation. Further, staggering 3

4 payments of this compensation over the leave period may keep premium payments current or defray the overall amount of make up payments upon return from leave. Regardless of whether this compensation is staggered, counties should ensure that the employee on leave received all earned military leave compensation at the end of each federal fiscal year. Counties should document any authorization to use other forms of leave in lieu of military leave. This documentation is important because Counties may not unilaterally assign other forms of leave in lieu of military leave. Similarly, any designation of compensation paid to the employee during military leave for items such as premium payments should be documented and placed in the employee s personnel file. These records are important for demonstrating compliance with the laws and ensuring smooth processing of pay and benefits while the employee is on military leave. Health Insurance Benefits Upon Re- Employment When an employee on leave returns to employment with the County after a period of military leave lasting over thirty (30) days, health insurance benefits should be available to the employee just as if he or she had not taken military leave. If the health insurance offered to county employees changed during an employee s military leave, the employee will be entitled to what all other employees are offered and will not have any entitlement to the former plan. Further, a returning employee may not be required to satisfy any new waiting or eligibility period for health insurance benefits that otherwise would have been satisfied but for the period of military leave. Generally, Counties should prepare for the return of employees from military leave, in part, by ensuring that health insurance coverage is reinstituted without delay. It is unclear legally whether the effective date of the coverage should be upon the employee on military leave s application to return to work or upon their first day of work after military leave ends. However, Counties should err on the side of caution by restarting such benefits as soon as practicable. Conclusion With the massive call-ups of reservists for the current conflicts, counties should prepare for the deployments and returns of employees. With the many Human Resources issues that are raised by military leave, counties should make preparations to comply with these legal issues. Compliance issues with health insurance, just a small part of the elements affected by these military leave laws, highlight the importance of planning ahead and documenting communications with employees before military leave begins. Counties should plan ahead to (1) designate and train individuals on military leave issues, (2) set up processes that ensure that communications with the veteran are made and that account for compliance with these laws, and (3) create forms 4

5 that aid the county in complying with these military leave laws. With minimal initial effort, several missteps in complying with these laws may be avoided and may aid employees during difficult, transitional times. Jennifer Keaton, an associate with Ellarbee Thompson, specializes in employer counseling, training and litigation prevention, employment litigation, public employment law, and education law. William Deveney, a partner in the firm, specializes in labor and employment litigation, employer counseling and litigation prevention, and public employment law. 1 See O.C.G.A (e). 2 See id. 5