When employees are called to active duty military service, employers should review and communicate potential impact on VRS benefits and also take the necessary reporting steps as the employee goes on leave and later when the employee returns to the workplace.
- While the member is in leave-without-pay status for active duty military service, do not report contributions to VRS. Mark the employee on leave without pay in myVRS Navigator.
- Be sure to keep the employee’s salary up to date in myVRS Navigator. The salary entered should be the salary that would have been paid had the employee not been on active duty military leave.
- Mark the employee as Active in myVRS Navigator when he or she returns to work from leave.
- A member called to active military service is eligible for service credit for the time served. The credit counts toward becoming vested in the retirement plans, eligibility for retirement and the health insurance credit.
Purchase of Prior Service
If the member goes on active duty military leave while in the process of purchasing service:
- After-tax purchase of service agreements terminate after two months if payment is not received. The member must reapply to purchase the remaining service.
- Pretax purchase of service agreements freeze in an active status while the member is on leave without pay; no payroll deductions can be made. Deductions should resume immediately upon a member’s return to active employment in a VRS-covered position.
When the member returns to employment:
- Service credit is granted at no cost, provided the member's discharge is other than dishonorable and the member returns to covered employment within a year of discharge from active duty.
- The member must submit a copy of the DD214 and apply for the service by completing an Application for Purchase of Prior Service Credit VRS-26.
- Certify eligible active duty military leave in myVRS Navigator for each period of active duty service.
- Eligible VRS Plan 1 and Plan 2 members may apply for disability retirement at any time while on military leave.
- A member on military leave without pay who suffers a disabling condition who is eligible for disability retirement may apply even if the leave without pay period exceeds 24 months.
VSDP and VLDP
Under the Virginia Sickness and Disability Program (VSDP) and Virginia Local Disability Program (VLDP):
- A member on military leave with pay who becomes ill or injured may use any available leave to cover the period of illness or injury. If eligible, the member may also be entitled to short-term and long-term disability benefits.
- A member on military leave without pay who becomes ill or injured may not use any available leave to cover the period of illness or injury. The member may only use leave and, if eligible, be covered by VSDP if reinstated to pre-leave employment status.
- Disability benefit payments are not offset by military disability benefits.
- Eligibility continues while on leave without pay for active duty military service.
- If the beneficiary is a spouse, minor child or parent, the beneficiary may choose either a lump sum in the amount of the member contribution account plus interest or a monthly benefit amount.
- If the beneficiary is not a spouse, minor child or parent, a lump sum in the amount of the member contribution account plus interest will be paid.
- Coverage is the same as that during regular employment.
- For state employees, continue to pay the employer portion of the premium. Members pay the cost of dependent coverage.
- The Uniformed Services Employment and Reemployment Rights Act (USERRA) applies to all employers and provides for up to 24 months of continued health insurance coverage for members who are on military leave.
In addition, COBRA provides for 18 months of coverage, with further extensions for certain events. COBRA applies to group health plans maintained by employers with 20 or more employees. If an employer is too small to be subject to COBRA, the plan’s insurer may be required to provide coverage.
Basic Group Life Insurance
- A member on military leave without pay may continue coverage for the duration of the leave period as long as the premiums are paid.
- If the premium is not paid, coverage ceases during the leave period but is reinstated once the member returns to a covered position.
- If the member pays the premium, collect and submit the premium to VRS for the member.
- If the employer pays the premium, submit the premium to VRS.
- No accidental death and dismemberment benefits are payable if death results from an act of war.
Optional Group Life Insurance
- A member on military leave without pay may continue optional life coverage for the duration of the leave period as long as the premiums are paid.
- If a member does not pay the required premium, coverage ceases during the leave period.
- A member may drop optional coverage while on leave without pay for active military service and be reinstated without having to provide evidence of insurability for the same or lesser amount. Payroll deductions must resume immediately upon reemployment in a VRS-covered position.
Defined Contribution Plans
- Contributions cease while participants are on leave without pay for active duty military service.
- Participants receiving a paycheck while on active duty may continue to make contributions to a DCP (Commonwealth of Virginia 457 Deferred Compensation Plan or Hybrid 457 Deferred Compensation Plan). Hybrid Retirement Plan members can make up any mandatory or voluntary contributions to the defined contribution component of their plan.
- Participants who meet the requirements of the Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA) may make up contributions they missed while on military leave.
- Upon receiving the Payroll Authorization form from the participant, the employer will cosign the Application for Uniformed Services Leave Make-up and submit the make-up contributions along with the current contributions for each pay period.
Cash Match Plan
- No employer match is made while the member is on military leave without pay.
- Members receiving a paycheck and contributing to a DCP while on active duty continue receiving employer matching contributions.
- Participants in the Commonwealth of Virginia 457 Deferred Compensation Plan or Hybrid 457 Deferred Compensation Plan who elect to make up the contributions missed during the period of leave are eligible to receive the associated cash match.
- Employees of colleges and universities whose eligibility for the cash match is based on contributions to a 403(b) should contact their human resource office for information on qualifying for the cash match.
- Upon receiving the Payroll Authorization form from the participant, the employer will cosign the Application for Uniformed Services Leave Make-up and submit the make-up cash match along with the current cash match for each pay period.
Optional Retirement Plan (ORP)
- Participants receiving a paycheck while on active duty military leave are eligible to receive any employer contribution amounts.
- Contributions cease while the member is on active duty military leave without pay.
- Upon returning to active employment, members are eligible to receive any missed employer contributions.