Military leave and health coverage under USERRA: what employers must continue and restore.
How continuation works during uniformed service, what an employee can be charged, how it interacts with COBRA, and what must be reinstated on return. Written for the owner or HR lead.
A Federal Law That Protects Health Coverage During Service
The Uniformed Services Employment and Reemployment Rights Act applies to nearly every employer, regardless of size.
Who It Covers
Employees who leave a job for uniformed service, including National Guard and Reserve duty. It applies to the public and private sectors. Small employers are covered as well as large ones. Check whether any employee on your roster is in the Guard or Reserve, since annual training and short deployments count the same way as longer service.
What It Protects
Reemployment, seniority-based benefits and the right to continue employer health coverage during the absence. In practice, the benefit side means HR needs a clear process for health, dental and other group coverage the moment an employee gives notice of service. Ask the carrier how it wants these changes reported.
What It Requires of You
Continue coverage on request, restore it on return without penalty, and treat the leave like other leaves of absence for benefits that depend on it. Put the rule in your leave policy so supervisors do not improvise. A common mistake is treating military leave as optional or applying the unpaid-leave rule used for other absences.
Continuation Coverage During Absence
The employee has the right to keep coverage, and the cost depends on the length of service.
Thirty Days or Less
The employee can be charged only the regular employee share of the premium. Employers often continue coverage automatically for short absences. Confirm with payroll how the employee share will be handled while pay is interrupted, so coverage does not lapse by accident. Document the arrangement in writing before the leave starts.
More Than Thirty Days
The employer may charge up to 102 percent of the full premium, the same as COBRA, because the employer share is no longer required. Set up a billing method before the leave begins, such as direct payment or a prepaid arrangement. Ask counsel how to treat any premium the employee has not yet paid when service starts.
Up to 24 Months
Continuation runs for the period of service, up to 24 months. Coverage ends earlier if the employee fails to return or apply for reemployment on time. Track the start date of service and the return deadline in a shared calendar. Employees sometimes assume coverage runs the full period automatically, so say plainly what they must do to keep it.
Dependents Are Covered
Spouses and children covered before the leave can continue. The election covers the family. Confirm the dependent list with the employee when the leave begins, and ask about any recent life changes. Send the notice to the household address too, since the employee may be out of reach.
USERRA and COBRA Run Side by Side
A military leave can also be a COBRA event, and the rules should be coordinated.
Two Rights, Not One
Leave for service can be a COBRA qualifying event, and USERRA continuation is a separate right. Employees can choose either, and the notices should explain both. Explain the cost and length differences side by side so the employee can choose with full information. Keep a record of the choice made, and ask counsel how your plan document treats overlapping rights.
Different Maximums
USERRA continuation can run longer than 18 months of COBRA, up to 24 months. An employer may satisfy both with one continuation process if the plan says so. Read the plan document and any continuation vendor agreement to see how the two timelines are tracked. A mismatch between what the plan says and what the vendor does is a common source of errors.
Notice Is Yours to Send
Do not assume the employee knows. Send a notice describing both options when the leave begins. Use a standard template and send it by a method you can prove, such as email with a read receipt or certified mail. Include a contact for questions so employees can reach HR quickly.
Reinstatement Without Waiting Periods
The return is where the law is most specific.
Coverage Restored
The employee and covered family members come back onto the plan immediately, without new waiting periods or pre-existing limits, other than for conditions the Department of Veterans Affairs finds were caused or aggravated by service. Notify the carrier and the payroll team of the return date before the employee comes back. Ask the carrier how it handles reinstatement so there is no gap in the first claims.
Timely Application
The employee must apply for reemployment within a time that depends on the length of service. A short absence means reporting the next scheduled day after rest. A long one allows more time. Give returning employees a written reminder of the deadline before they leave. Do not decide the timing yourself if the facts are unclear. Ask counsel, since the rules depend on the length of service and the circumstances.
Seniority Benefits Follow
Benefits that depend on seniority, including paid time off accrual and eligibility, are restored as if the employee had stayed. Review handbook language on vacation accrual, retirement plan service credit and bonus eligibility for military leave. Ask counsel or your retirement plan provider how the return affects each of them.
How It Touches Other Benefits
A military leave affects more than medical.
ACA Measurement
Hours during military service are treated under special-leave rules, so they do not drag an employee’s average down. This matters for look-back measurement. Flag military leave periods in your hours tracking system so they are not counted as low-hour weeks. Ask your payroll or reporting vendor how they code this leave, and check a sample of records.
TRICARE and Other Coverage
Employees may have coverage through service. The group plan remains primary or secondary under coordination rules; check the plan terms. Ask each employee whether any other coverage applies and keep a note on file. Coordination of benefits can affect claims, so share the details with the carrier or your claims administrator.
FSAs and Voluntary Benefits
Flexible spending accounts and voluntary benefits need their own treatment during leave. Spell out the rule in the leave policy. Check each product’s rules for pausing, reducing or continuing contributions, since they differ by plan and carrier. Tell employees in writing what happens to payroll deductions and unused balances while they are away.
A Short Checklist
A repeatable process keeps these simple.
Ask for Orders
Get a copy of orders or a statement of service. Verify and keep it on file. Keep orders in a confidential file separate from the regular personnel record. If the employee cannot provide paperwork right away, note the date requested and follow up, rather than delaying coverage decisions.
Send the Notice
Describe continuation costs, deadlines and the return process in writing. Include the plan contact, a premium table and the date by which the employee must respond. Ask counsel to review the template once so future notices can be sent quickly.
Set up Billing
Decide how premiums will be collected during the absence, and confirm the amounts. Choose one payment method and put the amounts, due dates and grace rules in writing. Confirm with payroll and finance who receives the payments so a late premium is caught right away.
Plan the Return
Confirm reinstatement dates with the carrier and update payroll records. Ask the employee for the expected return date as early as possible. Schedule a short meeting to review the plan options, update elections if needed, and confirm payroll deductions restart correctly.
The questions that come before a deployment.
Six questions employers bring us about military leave and benefits.
Do small employers have to comply with USERRA?
Yes. It applies to employers of every size, including the smallest.
Can we charge the employee for coverage during leave?
For service of thirty days or less, only the employee share. For longer service, up to 102 percent of the full premium.
Does the employee lose coverage if they do not pay?
Failure to pay can end continuation, with notice under the plan terms. Ask counsel before terminating coverage for a service member.
Do we have to hold waiting periods against a returning employee?
No. Coverage is reinstated without waiting periods or new pre-existing exclusions, apart from service-connected conditions.
How does this relate to FMLA?
They are separate rights. An employee may have rights under both for some leaves, and the more generous right controls.
Who tells the employee about their rights?
You do. A short written notice at the start of the leave prevents most disputes.
Ready? Send us your renewal, or talk it through with someone first. No cost, no obligation.
General information about USERRA and group health coverage, not legal advice. Individual leave and reemployment questions belong with employment counsel, and we will bring them in.
Related guides.
Caregiver Support, Sick Time and Paid Leave
How leave laws and paid-time programs connect to your health plan and policies.
When an Employee Dies
The benefits steps that matter and their order.
Leave and Absence Management
FMLA, state leave and what each does to coverage.
COBRA Administration
Notices, deadlines and who owns them.
FMLA and Leave for Employers
Eligibility, penalties and benefits during leave.
Send us your renewal.
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The renewal letter
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Enrolled counts by tier
Four documents — two more if your group is 50 or more. Nothing else; every extra one is a reason to postpone.
Laws and rules referenced
38 U.S.C. § 4317 — USERRA: health plan coverage for employees on military leave, up to 24 months.
This page is general information, not legal or tax advice. Rules change and facts matter, so confirm your situation with counsel or a qualified advisor.
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