Vol. 16, State C
August 26, 1999
Pay Adjustments for Health and Income Continuation Insurance
Knowing When to Include or Exclude Add-on Pay from
Employe Pay Rate when Certifying Sick Leave
For the past several years, the question of whether to include
or exclude add-on pay from the employe pay rate has been an ongoing
issue. Please note that the amount of sick leave you certify to
the Department of Employe Trust Funds (ETF) on the Accumulated
Leave Certification form (ET-4306) will vary depending on the
Represented and Non-represented Employes
Do not include add-on pay for any represented
or non-represented employe. The rationale behind this decision includes
the following provisions:
Sick leave is converted at the basic pay rate (Wis. Stats.
The basic pay rate excludes any overtime, on-call, and extracurricular
or supplementary compensation (Wis. Admin. Code Chapter
ETF 10.01 (1m)).
Therefore, because add-on pay is considered supplementary compensation,
it must be excluded from the employe pay rate when certifying the
amount of sick leave to ETF.
State Employes Classified as Teachers, Teacher Supervisor,
An educational credit add-on is considered part of an employe's
basic pay rate (Wis. Stats. § 40.05(4)(b)). This applies to any
state employe classified as a teacher, teacher supervisor or education
director, who receives payment of supplemental compensation to complete
an educational course that has been approved by their employer.
Information about this provision was published by the Department
of Employment Relations in Bulletin CC/PP-143 dated July 22, 1998.
Income Continuation Insurance Plan Amended
The Group Insurance Board amended the State Income Continuation
Insurance (ICI) Plan at its June 29, 1999 meeting. The amendments
bring Plan language into agreement with statutory language, clarify
long-standing practices, eliminate inconsistency and confusion about
reporting earnings and premiums, and clarify the definition of short
term disability. All changes went into effect on June 29, 1999.
The statutes reference sick leave in terms of days rather than
hours. The amendment to the Plan clarifies that, except for special
category 3, a day of sick leave is equal to 8 hours for purposes
of determining the correct premium category.
ICI benefits cannot be paid for days for which an employe is entitled
to receive sick leave. However, the statutes do not require an employe
to use more than 130 days of sick leave before ICI benefits can
begin. Anything in excess of 130 days can be used or saved at the
discretion of the employe. The amendment clarifies that the number
of sick days will be determined based on the claimant's FTE appointment
percentage if the claimant is in a part-time appointment. For example,
a half-time employe with 600 hours of sick leave has 150 days of
sick leave for purposes of this provision (600 hours ÷ 4 hours/day
= 150 days). A full-time employe with 600 hours of sick leave has
75 days of sick leave (600 hours ÷ 8 hours/day = 75 days).
Project and Limited Term Employes
In order to create a consistent method of determining benefit amounts
and premiums for LTE and project employes, the ICI plan language
that relates to seasonal and academic year employes was expanded
to include project and limited term employes.
The ICI plan states that an employe who is a project or limited
term employe, or employed on a seasonal or academic year appointment
of less than 12 calendar months, must pay a premium on the basis
of WRS-reported state earnings from the prior calendar year, rounded
to the next higher thousand and divided by twelve.
If such an employe is newly hired, or if there has been a break
in service of more than three consecutive months, you must estimate
the project, limited term, seasonal, or academic earnings to be
received during the next 12 months. Then, you round these earnings
to the next higher thousand and divide by 12 to determine the monthly
basis for earnings and premiums. Divide the monthly earnings by
2.175 in order to calculate biweekly earnings.
Definition of Short Term Disability Revised
Claimants need only be disabled from their own specific occupation
in order to meet the definition of disability for short-term Income
Continuation Insurance (ICI) benefits.
Previously, the ICI plan required that in order to qualify for
short-term ICI benefits, a claimant had be disabled not only from
their own occupation, but also from any "like occupation."
When an employe became disabled from his or her own job, the employe
expected the ICI plan to pay benefits until that employe was capable
of returning to work.
In rare instances claims were denied because, while the employe
was clearly disabled from his or her job, the employe was capable
of working in a "like occupation." For example, a claim
was denied if the particular place of employment posed a health
hazard, but the employe was capable of performing a like occupation
in a different location. Since this situation rarely occurred, and
because it may create an unreasonable justification for denying
an otherwise valid claim, the Board removed this language from the
definition of short term disability.
Supplemental Add-on Pay for Purposes of Determining
Supplemental (permanent) add-on pay has been included in the definition
of earnings for the purpose of determining premiums and benefits
for ICI. Earnings include permanent add-on pay awarded to an employe
who holds certain educational degrees, certifications, licenses
or credentials, but does not include temporary additional pay such
as night differential, weekend differential, or income from any
other sources. Permanent add-on pay for University of Wisconsin
Hospital nurses who only work weekend hours is included in earnings
for ICI purposes.
This amendment clarifies a long-standing practice of basing premiums
and benefits on earnings that include permanent supplemental add-on
pay for attainment of specific credentials or accreditation.
ICI Updates Made to ETF Internet Site
Check out the State ICI Plan on the
Department's Internet site. Questions can be directed to the
Employer Communication Center at (608) 264-7900.