Employer Bulletin

State and Local Life Employers
Vol. 18, No. 24
Date

Bulletin Addresses Life Insurance Coverage During Military Leave; Living Benefits Brochure Now Available

Bulletin Addresses Life Insurance Coverage During Military Leave

The Group Insurance Board recently approved an amendment to the Wisconsin Public Employers (WPE) Group Life Insurance contract deleting the provision that requires life insurance coverage be discontinued within 60 days for employees on military leave who are serving in a war. With this amendment, insured employees who are serving in a war will be able to continue insurance coverage on the same basis as any employee who is on a leave of absence. Coverage may be continued for up to 36 months if the employee continues to pay premiums. The employer must continue to pay the employer share of the premium for as long as the insurance is in force.

The amendment was made to assure that the plan is in compliance with the Uniformed Services Employment and Reemployment Rights Act (USERRA). The employment rights of military reservists who are called to active duty are governed by USERRA. Cancellation of benefits or exclusions based on an employee's being in military service or on active duty are banned under USERRA.

Claims Payable Due to Military Action

Exclusions in life insurance benefit coverage for events occurring due to acts of war are permitted if they are nondiscriminatory and apply to civilians as well as those serving military duty. Although the WPE life insurance contract does not exclude payment of claims for war-related deaths, it does exclude Accidental Death, Dismemberment, and Loss of Use (AD&D) coverage for war-related claims.

The limitations of accidental death and dismemberment coverage relative to war-related claims are as follows:

"Benefits shall not be payable if death or other loss results from:

1. War, declared or undeclared, or act incident to war;
2. Travel or flight in or on any species of military aircraft other than as a passenger in a transport aircraft or of participation as a passenger or otherwise in any other form of military aviation or military aeronautic operation;"

Because the AD&D exclusion applies to all insured participants civilians, as well as military personnel the exclusion is allowable.

It should be noted that the events of September 11, 2001 were acts of terrorism and not war. Although there is an exclusion for war, there is currently no exclusion for terrorism. Had the plan experienced any claims due to the events of September 11, any death claim including the AD&D benefit would have been paid. All claims are reviewed on a case-by-case basis in the context of the events surrounding each particular claim. If you have questions regarding the WPE life insurance program, contact Marcia Blumer at (608) 266-2640.

Living Benefits Brochure Now Available

A new Living Benefits brochure (ET-2327) is available for distribution to interested employees who are insured under the Wisconsin Public Employers (WPE) Group Life Insurance program.

Living Benefits are the proceeds of life insurance coverage that is paid while the individual is still living. Employees, dependents (if the employee has spouse and dependent coverage), or annuitants who are insured under the WPE plan and who meet the medical criteria are eligible to apply.

The Living Benefit option is payable if the employee qualifies under at least one of the following options:

Terminal Condition Option – the employee has a condition caused by sickness or injury which directly results in a life expectancy of 12 months or less; or

Confinement Option – the employee is confined for medical reasons in a skilled, intermediate, or custodial care facility for six continuous months and is expected to continue to be confined until death; or

Hospice Care Option – the employee has entered a certified hospice program.

Employees can apply for up to the full value of their coverage. The minimum request is $5,000, or the total value of the insurance coverage, if less. If a living benefit is paid, the face value of the WPE life insurance will be reduced by that same amount. Minnesota Life Insurance Company, the WPE life insurance program insurer, will make the final determination as to whether an applicant is eligible for the Living Benefit.

A copy of the Living Benefits brochure (ET-2327) is attached. This brochure is available on request from ETF and may be found on the ETF Internet site at etf.wi.gov. If you have questions about the program, contact Marcia Blumer at (608) 266-2640.