Medicare Part-D: Employer Mandatory Disclosure to CMS

On December 9, 2005, the Department of Labor published Final Regulations interpreting the provisions of the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) as well as Final Notice Regulations. Both sets of regulations take effect on January 18, 2006.

Employer Action Required:
Posting of USERRA Notice by January 18, 2006

The Final Notice Regulations require employers to post a USERRA Notice in its workplace where other similar notices are posted (lunchroom, etc.). Alternatively, the employer can mail it or e-mail it to each employee.

1. Employers. All employers, both private entities and public agencies, regardless of the number of employees, must post this Notice.

2. Notices. The DOL has developed both a private sector and a separate public sector Notice. This Notice replaces the interim notice required by the Veterans Benefits Improvement Act of 2004 (VBIA) which was distributed for posting in March 2005. It reflects edits based on public comment and the creating of a separate Notice for federal agencies. ERISA does not require that the Notice be incorporated in summary plan descriptions.

We have attached a PDF of the Notice to this Legislative Update. Employers can obtain a clean copy of the Private Sector and State Government Employers Notice at the following address: www.dol.gov/VETS/programs/userra/USERRA_Private.pdf.

Final USERRA Regulations

1. Overview. The Final USERRA Regulations are presented in Q&A format (nearly in plain language) following the outline of the law itself:

· Anti-discrimination and anti-retaliation;

· Eligibility for Re-employment;

· Rights, benefits, and obligations of persons absent from employment due to service in the Uniformed Services;

· Re-employment rights and benefits; and,

· Compliance assistance, enforcement.

2. Interpretation. The Final Regulations incorporate very minor differences from the proposed regulations issued in September 2004. It reflects how courts have construed USERRA since its enactment. The DOL points out that the U.S. Supreme Court requires that legislation be construed liberally for the benefit of those who are in the service of our country. I have attached a summary of the USERRA law itself for your reference. For a copy of the Final Regulations, please visit our website at www.abferisa.com.

Highlights

1. Employment Issues. Final Regulations make clear that USERRA does not apply to State National Guard Service. However, California has enacted the California Military Families Financial Relief Act of 2005 applicable to the California National Guard in addition to existing state laws found in the Military and Veterans Code. USERRA will apply to employees in leave or lay off status at the time service begins.

USERRA typically protects employees returning to work after military service from discharge without cause. The Final Regulations point out that employees may be discharged for cause which includes misconduct, job elimination or layoff under a legitimate, non-discriminatory basis.

2. Welfare Plan Issues. During the period of service, employees on paid military leave may make pre-tax contributions under IRC Section 125. For purposes of USERRA health care continuation, the Final Regulations will allow the employer to establish rules for enrollment which would be more liberal than the federal COBRA rules. Additionally, the employer cannot deny coverage under circumstances where it is unreasonable or impossible to make a timely election. The employer may also adopt more liberal rules for making premium contributions for USERRA continuation of health care coverage. Finally, employees on military duty must be given the same opportunity to continue other welfare benefits as is given to employees on the employer’s most generous form of non-military leave of absence. Upon an employee’s return, the employer is required to negotiate with carriers to eliminate any waiting period criteria or exclusions.

3. Lengthy Regulations. The Final Regulations are quite lengthy and detailed. We recommend that you review these rules for greater detail, as the need arises. For a complete copy of the Final Notice Regulations and Final USERRA Regulations, please visit our website at www.abferisa.com.

Attachments:

2006-1 Attachment A USERRA Private Notice

2006-1 Attachment B Overview of USSERA

This legislative update is published as an information source for our clients and colleagues. It is general in its nature and is no substitute for legal advice or an opinion in a particular case.