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Employers

Employer Bulletin

State Agencies and Local Life Employers
Vol. 22, No. 14
July 29, 2005

Wisconsin Act 162, Military Leave and Group Life Insurance

NOTE: Although Wisconsin Act 162 applies to State employees only, the following provisions — based on Wisconsin Act 162 — are also applicable to the Local Government employees with coverage in the Wisconsin Public Employers (WPE) Group Life Insurance plan.

Wisconsin Act 162, published March 30, 2004, applies to State employees activated for military service on or after January 1, 2003. This law allows State employees on military leave to receive benefits and State salary (less military pay and allowances), as well as accumulate sick leave and vacation, as though no interruption of State service had occurred. With the enactment of Wisconsin Act 162, State employees activated to serve military duty are no longer considered on unpaid leaves of absence provided the employee did not terminate employment.

Life Insurance While on a non-Military Leave of Absence

Generally, employees insured under the WPE Group Life Insurance plan who take an unpaid Leave of Absence (LOA) may either continue coverage by prepaying the premium to the employer or allow coverage to lapse while retaining the right to re-enroll within 30 days of return to work.

Employees on a paid LOA continue to have the employee share of premiums deducted from their paychecks to pay for continued coverage. Employees wishing to discontinue coverage during paid leave must file a Life Insurance Application, Cancellation, Refusal form (ET-2304) to cancel all or part of the coverage. Once cancelled, employees choosing to re-enroll in the future may only do so by applying through evidence of insurability. Employees on paid LOA who continue coverage will be reported as an active employee on the monthly billing.

Life Coverage Options While on Military LOA

Employers must advise the employee of their life insurance coverage options prior to the employee going on military leave. The available life insurance options are explained below. It is strongly recommended that employers document the arrangement for employee and employer records.

Coverage Lapses:
Life insurance claims are not paid for any uninsured, regardless of employment status.

Coverage lapses when an insured employee fails to pay premium. Employees wishing to discontinue coverage during military LOA must cease paying the premium. Those who discontinue premium payment may re-enroll by filing a completed Life Insurance Application, Cancellation, Refusal form (ET-2304) within 30 days of return to work after the military LOA.

Coverage Continues:
Life insurance claims are paid for any insured whether they are on military leave or not. However, accidental death, dismemberment and loss of use benefits are not paid for claims caused by war or any act of war, declared or undeclared, or for travel in any aircraft except as a commercial passenger.

Employers need to make arrangements to collect the employee premium during the military LOA if the employee elects to continue coverage. If the employee is receiving pay from their employer, the employee’s share of premium may be deducted from the paycheck. The employee premium must be collected from the employee in advance if the military LOA is unpaid, or the paycheck is insufficient to cover the employee premium. The employer must receive each premium payment at least 31 days prior to the end of the period for which premiums had previously been paid.

Life Insurance Upon Return from Military LOA

Coverage Lapsed:
The employee may re-enroll by completing a Life Insurance Application, Cancellation, Refusal form (ET-2304) within 30 days of the return to work from military leave. The employee may reapply only for the level of coverage in effect prior to the leave and the amount of insurance shall be based on estimated earnings. The employer must indicate “return from Military LOA” as the reason for the application. Employees failing to apply within 30 days of the return who later wish to re-apply, may only do so through evidence of insurability.

Employees may also elect any new coverage offered by the employer during the period the employee was on military LOA without applying through evidence of insurability.

Coverage Continued:
Payroll deductions for employee premium share, if discontinued during military LOA due to employee prepaying, must be reinstated upon the employee’s return from military leave. The amount of coverage remains the same. No enrollment application is required.

Employees may also elect any new coverage offered by the employer during the period the employee was on military LOA without applying through evidence of insurability.

New Employees Completing Six Month Eligibility While on Military LOA

Months of military leave count toward the fulfillment of the six-month Wisconsin Retirement System participation requirement for Group Life Insurance coverage for new employees. Employees who become eligible for life coverage while on military LOA have the option of delaying their election of life insurance coverage until completion of military LOA or electing life insurance coverage during military LOA.

Delay coverage:
Employees may delay electing life insurance coverage until their return from military LOA. No life insurance claims are payable in this situation.

The employee may enroll by completing a Life Insurance Application, Cancellation, Refusal form (ET-2304) within 30 days of their return to work from military leave. Employers must indicate “Return from Military LOA” as the reason for applying on the application. Employees failing to apply within 30 days of the return may only do so by applying through evidence of insurability.

Employees may elect any new life coverage offered by the employer while the employee was on military LOA without applying through evidence of insurability.

Elect coverage:
Life insurance claims are paid for any insured on military LOA upon reaching the effective date of coverage. However, accidental death, dismemberment and loss of use benefits are not paid for claims caused by war or any act of war, declared or undeclared, or for travel in any aircraft except as a commercial passenger.

If these employees are interested in obtaining coverage during their military LOA:

  • Employers should provide the employee with a Life Insurance Application, Cancellation, Refusal form (ET-2304) prior to the military LOA.
  • Employees must either file an application with the employer prior to the military LOA or the person empowered through a Power of Attorney must sign the Life Insurance application for the employee on military LOA within 30 days of the eligibility date.
  • Employers need to make arrangements to collect the employee premium during the military LOA if the employee elects to begin coverage, provided the enrollment application is filed with the employer within 30 days of the eligibility date. If the employee is receiving pay from their employer, the employee’s share of premium may be deducted from the paycheck. The employee premium must be collected from the employee in advance if either the military LOA is unpaid or the paycheck is insufficient to cover the premium. The employer must receive each payment at least 31 days prior to the end of the period for which premiums had previously been paid.
  • The coverage amount is based on estimated earnings and is effective the first of the month following the receipt of the completed application by the employer or the effective date of coverage, whichever is later.

Questions concerning the impact of Wisconsin Act 162 on Group Life Insurance should be directed to the Employer Communication Center at (608) 264-7900.

 

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