The Uniformed Services Employment and Reemployment Rights Act ("USERRA") requires an employer-sponsored group health plan to offer continuation coverage to a plan participant and his or her covered dependents when the participant is on a qualifying military leave. If the leave is shorter than 31 days, the coverage must be provided at actual employee rates. If the leave exceeds 30 days, the plan may charge a rate similar to that applicable to COBRA coverage.

The Veterans Benefits Improvement Act of 2004 (the "Act") amended USERRA by extending the maximum continuation of coverage period from 18 to 24 months. The extension applies to all continuation elections made on or after December 10, 2004. The Act also requires employers to provide employees with a notice of their rights, benefits and obligations under USERRA. This notice requirement may be satisfied by posting the notice where employers customarily place employee notices. The Department of Labor is obligated by law to provide notice text by March 10, 2005.

The IRS issued the cost-of-living adjustments applicable to dollar limitations for employee pension benefit plans for the 2005 tax year. Effective January 1, 2005, the limits are as indicated below.

Please contact any of the attorneys listed below with comments or questions regarding the recent changes to USERRA that affect group health plans or the cost-of-living adjustments for 2005.

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