Employer Bulletin

State Agencies
Vol. 19, State G
October 21, 2002

Program Administrative Fees for Employee Reimbursement Accounts (ERA) Reinstated in 2003

The administrative fee for the Employee Reimbursement Accounts (ERA) Program will be reinstated for plan year 2003. The administrative fee will be 50 cents per month for each health plan contract that has an employer-paid share reported to the Department of Employee Trust Funds (ETF). This change is effective with the health summary report due December 20, 2002 for January 2003 coverage.

Agencies should report the total fee (number of contracts x $0.50) via the State Health Insurance Summary (ET-1608) form. Even if an agency has no employees enrolled in the medical expense or dependent care reimbursement portions of the ERA program, the agency is still responsible for its share of ERA administrative costs. For most state agencies, employer FICA savings due to pre-tax funding of premiums, which remain in agency fringe benefit lines, will more than offset ERA fees.

Administrative expenses incurred by the ERA program are funded through three sources: account forfeitures, interest income, and fees contributed by each state agency. The fee was suspended in 2002 in an effort to reduce the ERA reserve balance that had grown to an amount that exceeded the targeted amount. The reserve fund is now close to the targeted amount.

For more information about this fee structure, contact Marcia Blumer at (608) 266-2640 or marcia.blumer@etf.state.wi.us. If you have questions about reporting and transmitting the fee with the State Health Insurance Summary (ET-1608) form, contact Ron Diehl, Division of Employer Services at (608) 266-2737 or ron.diehl@etf.state.wi.us.

Life Insurance Rates for State Employees Will Decrease in 2003

The claims experience for state employees insured under the Wisconsin Public Employers Group Life Insurance Program has shown a steady pattern of improvement over the past several years. The three-year overall claims result for the period 1999 through 2001 was better than the targeted result. Therefore, the Group Insurance Board recently approved a reduction in premium rates for many age groups. Premium rates will decrease for basic, supplemental, and additional insurance in the age 40 through 49 and age 55 through 69 categories. In addition, premium rates will decrease for all age categories for the Age 70 and Over Additional Insurance. Premiums for active State employees will decrease by 6.9% overall.

The employer share of the premium will remain at 63% of the employee premium for basic coverage and 35% of employee premium for supplemental coverage.

The spouse and dependent plan premium will also remain the same at $2.50 per unit per month. The coverage for each unit of spouse and dependent coverage will remain at $10,000 for a spouse and $5,000 for each dependent.

Effective March 1, 2003, the rates for State employees will be as follows:

For more information on the rate structure of the Group Life Insurance program, contact Marcia Blumer at (608) 266-2640 or e-mail marcia.blumer@etf.state.wi.us. If you have questions about reporting life insurance premiums to ETF, contact Steven Berg at (608) 264-6637 or e-mail steven.berg@etf.state.wi.us.