Employer Bulletin

State Agencies and Local ICI Employers
Vol. 21, Local D
March 18, 2004

Board Changes Application of Paid Vacation, Holiday or Compensatory Time for the State ICI Plan; Mandates ACH Payment of LTDI and ICI Benefits

Earnings Offset from ICI Benefits

The Group Insurance Board (GIB) has approved a change to the state’s Income Continuation Insurance (ICI) Plan. The change, effective January 1, 2004, requires that vacation, holiday or compensatory time earnings paid after the claimant’s elimination period be treated as reportable earnings. Any earnings for vacation, holiday or compensatory time paid after the elimination period but prior to any return to work are to be offset from the ICI benefit at a rate of 100%. This time is used at the claimant’s discretion and its use is not required by the Plan. Previously, claimants who were paid earnings for vacation, holiday or compensatory time after the elimination period but prior to a return to employment, did not have those earnings offset from the ICI benefit. The change was put into place to recognize earnings paid and to cease concurrent payment of ICI benefits and earnings payouts because the ICI benefit is intended to be an earnings replacement benefit.

The Employer Statement (ET-5351) has been revised to include a box to report the Last Day Paid. This box should be completed if the employee is receiving any of the above earnings. If the employee elects to receive the vacation, holiday or compensatory time, record the last day for which those earnings will be paid. Refer to the instructions on the reverse side of the form.

The Income Continuation Insurance Transaction Report (ET-5901) has been revised to report the earnings for vacation, holiday or compensatory time paid out after the ICI benefit begin date but prior to the claimant returning to your employment. If the claimant returns to part-time employment, report any vacation, holiday or compensatory time taken as part of the return to work earnings. Both forms can be found on the ETF Internet site, go to http://etf.wi.gov/publications/employer.htm.

Mandatory ACH Payments

At its February 17, 2004 meeting, the GIB approved a mandate requiring all Long-Term Disability Insurance (LTDI) and Income Continuation Insurance (ICI) long-term benefits be paid through the Automated Clearing House (ACH) process (also referred to as "direct deposit"). This requirement, effective March 1, 2004, will ensure benefit checks are received in a timely manner and will also eliminate lost, stolen or fraudulently cashed benefit checks.

All current claimants will receive a notice and ACH form from the Department of Employee Trust Funds. The form must be completed and returned to CORE no later than April 16, 2004. Failure to return the completed form will result in temporary suspension of LTDI and/or ICI benefits until receipt of the completed form.