Vol. 17, No. 10
April 20, 2000
Disability Premium Waiver Processing Changes
The Group Insurance Board recently approved an amendment to the
Wisconsin Public Employers Group Life Insurance contract that affects
the way in which a waiver of premium request is processed. The revised
process no longer requires the employer to certify that an employe
is disabled. It does, however, require that the employer provide
employment information necessary to process a premium waiver.
The procedure has also changed so that all requests for premium
waiver will require medical evidence of disability. Minnesota Life
Insurance Company (MLIC) will be responsible for requesting medical
evidence directly from the employe and determining whether the employe
qualifies for a premium waiver. This procedural change is effective
A copy of the revised Request for Disability
Premium Waiver (ET-5306) is attached. It is also available on
the ETF Internet site, http://badger.state.wi.us/agencies/etf under
Employer Forms and Brochures. You can print a copy of the form,
complete it, make a copy for yourself, and forward the original
to the Department of Employe Trust Funds (ETF).
You may also obtain a supply of the revised Request for Disability
Premium Waiver (ET-5306, REV 04/2000) by using the attached
order form. This form is now a single-ply form. After you complete
it, make a copy for yourself and forward the original to ETF. Please
note: Once you receive your supply of the new Request for Disability
Premium Waiver (ET-5306) form, destroy the old Disability
Premium Waiver (ET-5306) form with revision dates prior to
When an employe under age 70 and insured under the Group Life Insurance
Program becomes totally disabled from all gainful activity, and
is likely to be disabled for the indefinite future, group life insurance
coverage can be continued without payment of premiums. An employe
may qualify for a waiver of premiums even though he or she does
not qualify for a WRS disability annuity (Wis. Stat. § 40.63) or
Long-Term Disability Insurance (LTDI) benefit administered by ETF
under Wis. Admin. Code § ETF 50.
Examples of disabilities that may qualify because the date of recovery
is unknown include cancer, heart disease, tuberculosis, disabling
back injury, and mental illness. Examples of non-qualifying disabilities
because the date of return to work is somewhat predictable include
fractured arm, pneumonia, normal pregnancy (not high risk), or an
To be eligible for a disability premium waiver, the following criteria
should be considered:
- Insurance coverage must be in force at the time the employe
becomes disabled and must be in force continuously until the effective
date of the premium waiver.
- The employe must have stopped receiving earnings. "Earnings"
means all payments reported to the WRS under Wis. Stat. § 40.02
(22), including sick leave and vacation, but it does not include
temporary worker's compensation benefits that are reportable under
Wis. Stat. § 40.29. The employer may submit the Request for
Disability Premium Waiver (ET-5306), while earnings are still
- An employe may be eligible for a premium waiver after termination
of employment only if the disability commenced before the insured
employe terminated while insurance was in force. A disability
that began while the employe was on unpaid leave of absence is
eligible, provided coverage was in force.
- An employe who qualifies for a WRS disability annuity or an
LTDI benefit will automatically qualify to have life insurance
premiums waived if the employe has coverage in force when the
annuity or insurance benefit becomes effective. A Request
for Disability Premium Waiver (ET-5306) must be filed as
soon as possible to provide the necessary last day paid, last
premium paid, and coverage information. Premiums must continue
to be paid by the employe and/or employer until informed by MLIC
in a letter to the employe with copies sent to both the employer
and ETF that premiums have been waived.
- An employe who receives a Duty Disability benefit under Wis.
Stats. § 40.65 will not automatically qualify to have life insurance
premiums waived. In these cases, the employer must submit a premium
waiver form, and MLIC will request medical evidence of disability
from the employe.
Submitting a Request for Disability Premium Waiver
Whenever the employer becomes aware that an insured employe may
qualify for a premium waiver, the employer should file a Request
for Disability Premium Waiver (ET-5306) with ETF. The Request
for Disability Premium Waiver filing deadline and processing
steps are as follows:
- The request must be submitted within 36 months after the last
day for which earnings are paid. An insured employe who becomes
disabled while on union service leave of more than 36 months duration,
may file a waiver more than 36 months after the last day for which
earnings were paid.
- Employer completes the Request for Disability Premium Waiver
(ET-5306), makes one photocopy for their records, and forwards
the original copy to ETF.
- MLIC will contact the insured to request medical documentation
that verifies that the individual is not working due to total
and continuing disability.
- For state employes, approval of the Request for Disability
Premium Waiver is acknowledged with a Coverage During
Disability (ET-5806) notice. It is mailed by MLIC to both
the employer and the employe.
- For local employers and employes, a letter is sent from MLIC
acknowledging the approval of the premium waiver and certifying
the life insurance coverage during disability.
- Unless the employe also qualifies for a WRS disability annuity
under Wis. Stat. § 40.63, or an LTDI benefit, MLIC will review
the employe's status annually.
Amount of Coverage during Premium Waiver
The amount of insurance continued while an employe is disabled
is the amount in effect on the last day that the employe was on
the payroll. Employes may not apply for any new coverage that may
be offered by their employer until they return to WRS-covered employment.
Premium waivers take effect on the
- The first of the month following the date the disability began,
- The first of the month following the last day for which the
employe receives earnings (including sick leave and vacation but
not including temporary worker's compensation benefits).
- Continue to collect premiums until notified by MLIC that the
Request for Disability Premium Waiver has been approved.
Please note that the employe must pay premiums for any month in
which earnings (including paid leave) are received, even though
the employe may also qualify for a disability annuity or LTDI
benefit that will become effective in the same month. As premiums
are paid two months in advance, you may need to refund any premiums
that have been collected for periods for which a waiver has been
Cancellation/Termination of Waiver
MLIC will request annual medical recertification of the disability
until the employe reaches age 65, unless the employe qualifies for
a disability annuity or LTDI benefit. The waiver will be canceled
if medical evidence indicates that the employe has recovered or
if the employe fails to provide medical information when requested.
The following situations illustrate an employe's eligibility to
continue waiver of premium:
If an employe does not qualify for a disability annuity under
Wis. Stats. § 40.63 or an LTDI benefit and returns to employment
in any job or occupation, the premium waiver is canceled.
The following steps should occur:
return to WRS-covered employment, premium deductions should
resume effective the first of the month following the
return to work. No application is required unless new
coverage was offered while the employe was on leave.
usual, premiums should be collected two months in advance.
It may be necessary to collect several months' payment
in one month.
employe will have the same amount of coverage that they
had while on premium waiver.
employe may also enroll for any new coverage levels that
were added while the employe was on a premium waiver.
employer should notify MLIC of the employe's return to
work by submitting a written memo, e-mail or FAX. The
employe's name, Social Security number, and the date the
employe returned to work should be provided.
the leave lasted three full consecutive calendar months
or more, beginning in January of the next year coverage
will be based on the highest of the employe's:
earnings for the next 12 months, or
prior year's WRS earnings, or
If an employe who qualifies for a disability annuity under
Wis. Stats. § 40.63 or an LTDI benefit returns to work, the
waiver of premium remains in force.
the employe exceeds the earnings limit, the disability
annuity or LTDI benefit will be temporarily suspended.
However, suspension of the benefit does not affect the
waiver of premiums.
a disability annuity or LTDI benefit is terminated, the
premium waiver may terminate. MLIC will request medical
proof of continued disability from the employe in order
to maintain the premium waiver.
If the waiver is canceled prior to the employe's insurance
reduction age, the employe has the following options:
the employe remains on an approved leave of absence,
the employe may continue group coverage as an employe
for up to 36 months after the last day paid by resuming
employment has terminated, the employe
may continue group coverage if he or she meets the requirements,
by filing a Continuation Application (ET-2154)
form within 31 days of cancellation of the premium waiver.
the employe is not eligible to continue group
insurance, he or she may convert to an individual
policy with MLIC by filing a Conversion Application
(ET-2306) form within 31 days of cancellation of the premium
will notify the employe of these options when the premium
waiver is canceled.
The premium waiver terminates when a disabled employe reaches
his or her insurance reduction age. The insurance reduction
age is age 65 if the employe has already terminated employment;
otherwise, it is the date employment terminates or age 70,
whichever occurs first.
insured under waiver of premium on the date he or she attains
the insurance reduction age is entitled to premium-free, post-retirement
insurance coverage at the level provided by his or her former
employer (50% or 25%). All other coverage (Supplemental, Additional,
and/or Spouse and Dependent) ceases.
For more information about premium waivers contact Nicole Muller
at Minnesota Life Insurance Company, P.O. Box 259708, Madison, WI
53725-9708. Phone: (608) 277-8690; FAX: (608) 277-8665; e-mail:
Ordering New Request for Disability Premium Waiver
If you do not copy the Request for Disability Premium Waiver
(ET-5306) form from ETF's Internet site, you can order a supply
from ETF. Please allow three weeks for delivery. To order new forms,
please use one of the following methods:
Call Supply and Mail Services at (608) 266-3302.
- Complete the attached order
form and mail it to ETF, PO Box 7931, Madison WI 53707-7931.
- Fax a copy of the completed order form to ETF at (608) 267-4549.
- E-mail ETF by clicking "contact
us" on our Internet site, etf.wi.gov
and provide the same information requested on the order form.
Remember to destroy your old supply of the Disability Premium
Waiver (ET-5306) forms with a revision date before April 2000
once you receive your new supply.