Employer Bulletin

State Agencies
Vol. 22, State B
February 11, 2005

New Supplemental Income Continuation Insurance (ICI) Open Enrollment Period Begins February 21, 2005

The Department of Employee Trust Funds (ETF) recently announced an increase of the maximum monthly Income Continuation Insurance (ICI) benefit levels through the creation of Supplemental ICI coverage (Employer Bulletin, Vol. 22, Local B dated 1/14/2005). Supplemental ICI, effective April 1, 2005, provides for coverage based on annual earnings between $64,000 and $120,000.

This bulletin contains supplemental ICI enrollment and updated premium remittance instructions for State agencies.

Supplemental ICI Provisions

Currently, the ICI program covers 75% of an individual’s annual earnings up to $64,000. The new supplemental ICI coverage allows for coverage up to annual earnings of $120,000 with the employee paying the entire premium for coverage beyond the $64,000 threshold. Individuals with annual earnings greater than $120,000 who enroll in supplemental ICI coverage are limited to a benefit based on earnings of $120,000.

Please note:

The State ICI plan defines “earnings” as the basic salary, including permanent add-on pay based on employees holding certain educational degrees, certifications, licenses or credentials. Overtime pay, temporary additional pay such as night differential, weekend differential, and income from any other sources are excluded.

Who is eligible for Supplemental ICI Coverage?

Employees who meet/met the eligibility requirements for ICI coverage per the State/Faculty plans and whose annual earnings exceed $64,000. Eligible employees electing supplemental coverage must insure their entire salary above $64,000 up to a maximum of $120,000. There is no partial supplemental coverage. Enrollment in the supplemental coverage is voluntary.

When to apply:

Employees with ICI coverage and annual earnings exceeding $64,000 may apply during initial open enrollment (see below).

Employees newly eligible for ICI coverage and those employees applying for ICI coverage during annual deferred enrollment with annual earnings exceeding $64,000 may apply for Supplemental ICI at the same time they apply for ICI coverage.

Employees with ICI coverage and earnings exceeding $64,000 who fail to enroll during the initial open enrollment period may enroll in Supplemental ICI only on an annual basis (concurrent with the annual deferred enrollment period). These employees may not apply for Supplemental ICI by furnishing medical evidence of insurability.

Employees without ICI coverage whose earnings exceed $64,000 may apply for both ICI and supplemental ICI coverage by furnishing medical evidence of insurability.

Who pays the premium?

The employee pays the entire premium for the supplemental ICI coverage; there is no employer share. Employers cannot contribute any portion of the supplemental ICI premium.

How does supplemental coverage affect the potential benefit level?

Employees with supplemental ICI coverage are eligible for a maximum benefit of $7,500 per month (75% of maximum monthly earnings of $10,000).

Employees with annual earnings greater than $64,000 who are not enrolled in supplemental ICI coverage are limited to a maximum benefit of $4,000 per month.

Supplemental ICI Initial Open Enrollment

The initial open enrollment period for supplemental ICI coverage runs from February 21 through March 11, 2005. Supplemental ICI coverage for employees enrolling during this open enrollment is effective April 1, 2005. Attached to this bulletin is a sample letter employers may adapt and use to notify employees with annual earnings greater than $64,000 whose ICI coverage is effective on or before April 1, 2005. Employers should notify these employees and ask interested employees to contact the appropriate human resources or payroll/benefits personnel for an application.

Eligible employees on leaves of absence during the initial open enrollment period have 30 days from their return to work to apply for supplemental ICI coverage. Employees currently receiving ICI benefits may enroll when they return to work and are no longer receiving ICI benefits.

Who may apply during the initial open enrollment?

The initial open enrollment opportunity for supplemental coverage applies only to employees, with earnings exceeding $64,000, currently participating in ICI with an ICI coverage effective date of April 1, 2005 or earlier.

How to apply:

ETF recently revised the ICI enrollment application to accommodate supplemental coverage. There is a separate enrollment application for State employees/UW faculty (Income Continuation Insurance Application [ET-2307]).

Eligible employees wishing to enroll in supplemental ICI coverage must complete the 'Employee' section of the application and return the application to the employer by close of business on March 11, 2005.

Employers will:

1. Validate that the employee is eligible for Supplemental ICI coverage.
2. Complete the 'Employer' section of the application and forward the top copy of the application to ETF. Each application will be audited and problem applications reviewed with the employer or returned.
3. Retain the Employer Copy for verification purposes.
4. Give the Employee Copy to the employee.

Note: Please utilize the newly revised application, Income Continuation Insurance Application (ET-2307, rev. 01/2005), to enroll employees in both ICI and supplemental ICI coverage. Newly eligible employees, as well as those employees already enrolled in ICI and electing supplemental coverage during the open enrollment period, must complete the revised versions of the application. Destroy/discard all Income Continuation Insurance Applications (ET-2307, rev. 10/1999 or earlier) and begin using the revised forms effective the date of this bulletin. As of February 21, 2005, applications received with a revision date prior to 01/2005 will be returned to the employer; the employee must then complete the appropriate application.

Employers received instructions for ordering the revised ICI applications in a recent Employer Bulletin (Vol. 22, Local B dated January 14, 2005). If you have not yet ordered revised applications, complete the form attached to the above bulletin and mail, fax, or e-mail the form to Broadspire, the ICI third-party administrator. (Contact information is listed on the form).

Premium Payment and Reporting

ETF revised the Monthly Premium Report Group Income Continuation Insurance (ET-1611; for UW only, ET-1612) to accommodate the new supplemental ICI coverage. The revised report is attached along with reporting instructions. Copy the report for future reporting. This form is also available on ETF’s Internet site at: http://etf.wi.gov.