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Members

Income Continuation Insurance (ICI)

This section provides a basic overview of Income Continuation Insurance for State and Local employees. Detailed program information is available in the State Employee ICI (ET-2106) brochure or the Local Employee ICI (ET-2129) brochure.


What is ICI?
The Income Continuation Insurance (ICI) program is an income replacement plan that replaces up to 75 percent of your salary if you are unable to work because of sickness or injury. The plan provides replacement income for disabilities that are considered short term in nature, as well as those that may last for extended periods.

Benefits under the program will not duplicate benefits available from employee-sponsored programs such as WRS retirement (regular or disability retirement and lump sum or separation payments), Long Term Disability Insurance (LTDI), Social Security (retirement or disability), Worker’s Compensation, Unemployment Compensation, employer sponsored/sanctioned salary continuation plans, etc., but rather will supplement these programs so as to provide a specified level of disability income. The ICI program is funded by contributions from the state or local government employers and participants. The Department of Employee Trust Funds contracts with a private company to issue eligibility determinations and process individual claims.

Who is eligible?

The State ICI plan is available to all eligible State employees. The Local ICI plan is available to eligible local government employees whose employers have elected to participate in the ICI program. An eligible employee is any person receiving earnings as payment for personal services rendered to or for the benefit of the State or a participating local government employer and who is contributing a portion of those earnings to the WRS. Most employees must have six months of service under the WRS before becoming eligible for coverage. Some elected officials are immediately eligible for participation. You may not be on a leave of absence at the time of enrollment.

What is Supplemental coverage?

The supplemental ICI plan provides additional coverage for employees with annual earnings of $64000 up to $120,000. Employees pay 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. Enrollment in the supplemental coverage is voluntary.

Who is eligible for Supplemental ICI Coverage?

If you meet the eligibility requirements for ICI coverage per the applicable plan (i.e. Local or State/Faculty plan) and your annual earnings exceed $64,000, you may apply for supplemental coverage. If you elect supplemental coverage, you must insure your entire salary above $64,000 up to a maximum of $120,000. There is no partial supplemental coverage.

When to apply:

Local Employees: Employees newly eligible for ICI coverage with projected earnings exceeding $64,000 may apply for supplemental ICI at the same time they apply for standard ICI coverage.

State Employees: 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 standard ICI coverage.

Employees with standard ICI coverage and earnings exceeding $64,000 who fail to enroll during their initial open enrollment period may enroll on an annual basis, concurrent with the annual deferred enrollment period or annual adjustment period. Such employees may not apply for supplemental ICI coverage through evidence of insurability (EOI).

An employee does not have ICI coverage whose earnings exceed $64,000 may apply for both standard ICI and supplemental ICI coverage by furnishing medical evidence of insurability.

Who pays the premium?

You pay the entire premium for supplemental ICI coverage; there is no employer share.

How much does it cost?

The monthly premium rates vary depending on your salary and employee group. Select the premium rate table that applies to you:

Contact your payroll/benefit representative if you have question about your premium rate.

When can I enroll?

You may obtain coverage by completing an application form and returning it to your payroll/personnel office within 30 days after serving six months under the WRS (unless you are eligible to enroll at an earlier date). Previous employment with an employer covered under the WRS may allow you to enroll earlier.

State employees also have additional opportunities to enter the plan based on your accumulated sick leave balance. Your payroll representative can tell you the exact periods during which you can enroll.

If you do not enroll for ICI coverage when you are first eligible, you can enroll only by completing an Evidence of Insurability application. Approval or denial of your application will be based on information provided by you and your physician.

For more information about your enrollment period, refer to the State Employee ICI (ET-2106) brochure or the Local Employee ICI (ET-2129) brochure. You may also contact your payroll representative for more information and an application to enroll.

How do I file a claim?

You can initiate a claim by calling the ICI administrator, at 1-800-960-0052. When your claim is initiated, the claims administrator will send you an introductory packet including a medical release and complete claims processing information.

A claim may be submitted to the ICI administrator up to thirty (30) days prior to the last day worked; however, no benefits will be payable until after the last day worked based on the first date of disability determined by the administrator and subject to your elimination period. In no event will a claim be approved if received more than twelve (12) months from the claimed first date of disability. In addition, no benefits will be payable for the period which is more than ninety (90) days prior to the date ETF receives the paper claim form or the administrator receives the telephone claim.

How much will my benefit pay?

For most State and local government employees, the amount of ICI benefits payable is based upon WRS reported earnings in the calendar year prior to the first date disability, rounded to the next higher thousand. The rounded-up annual salary is divided by 12 to obtain the monthly salary and then multiplied by 75% to obtain the monthly benefit amount.

Employers will estimate the base salary earnings for the upcoming 12 months if the employee is new, has a break in service in the previous calendar year of three consecutive months or more, or if there is a permanent change in the employee's salary. The estimated annual salary is rounded to the next highest thousand and divided by 12 to obtain the monthly salary.

For both State and local government employees, the maximum benefit payable is $4,000.00 per month. However, for disabilities lasting longer than 12 months, an additional $75 per month is added to the normal benefit amount. If you enrolled in supplemental ICI coverage, your maximum benefit is $7,500 per month (75% of maximum monthly earnings of $10,000). The gross ICI benefit is reduced by other income sources you receive or are eligible to receive.

When will my payments begin?

State employees--Disability benefits begin the day after your elimination period has lapsed and you have not worked due to a continuous and totally disabling condition during that time. The elimination period begins on the first full day that you are continuously and completely absent from work due to disability. The elimination period for State employees is 30 calendar days or the date that your accumulated sick leave balance is exhausted, whichever is later. The elimination period for employees in the UW Faculty plan is your selected elimination period (30 days, 90 days, 125 days, or 180 days) or the date that your accumulated sick leave balance is exhausted, whichever is later. If you still have sick leave hours remaining after using 130 days, you may choose between continuing sick leave until part or all of the remaining hours are used or beginning ICI benefits effective the day after the last day of sick pay.

Vacation, personal holidays and compensatory time are not considered in determining when benefits begin. Subject to personnel policies and rules, you may use such time at your discretion. However, if you receive earnings for vacation, personal holidays, or comp time after the elimination period, ICI benefits will not be paid for that period. When you have served your elimination period and your sick leave credits are exhausted, ICI benefits are paid for every calendar day of continuing disability. Benefit payments are made monthly at the beginning of the month for the previous benefit month (i.e. January benefits are paid February 1).

Local Government Employees-- At the time of your enrollment, you chose an elimination period of 30 days, 60 days, 90 days, 120 days or 180 calendar days. Disability benefits begin the day after your elimination period has lapsed and you have not worked due to a continuous and totally disabling condition during that time.

Vacation, sick leave, holiday time, and compensatory time are not considered in determining when benefits begin. Subject to personnel policies and rules, this time may be used at your discretion. However, if you receive earnings for vacation, sick leave, holiday time, and compensatory time, after the selected elimination period, ICI benefits will not be paid for that period. You and your employer are required to notify the claims administrator of all earnings and benefits received after ICI benefits begin. When you have served your elimination period, ICI benefits are paid for every day of continuing disability, including weekends. Benefit payments are made monthly at the beginning of the month for the previous benefit month (i.e. January benefits are paid February 1).

Refer to the State Employee ICI (ET-2106) brochure or the Local Employee ICI (ET-2129) brochure for complete information about your elimination period and benefit payment.

When are ICI premiums waived?

ICI premiums are waived as of the first of the month after the date your benefits begin. However, if your benefits begin on the first day of a month, the premium waiver begins on the same day. The premium waiver remains in effect through the end of the month in which you continue to receive benefits.

If benefits are terminated because your claim is closed, premium payments for ICI coverage will resume. If you choose to remain on a leave of absence after your disability ends, you must immediately make arrangements for payment of premium. Otherwise, your ICI coverage will terminate and can be reinstated only after you return to work and reapply for coverage.

Are my benefits taxable?

If you receive benefits under the ICI program, you may be required to report some or all of these benefits as taxable income. Generally, the average percentage of the premium paid by your employer for the three years prior to your initial disability payment is the percentage of the benefit considered taxable. For example, if your employer paid 75% of the premiums for each of the three years prior to your initial disability payment, then 75% of the benefit payment would be taxable for both state and federal taxes.

If you are receiving benefits based on the supplemental coverage, that portion of the benefit is not taxable because you paid the entire premium for the supplemental coverage.

If you have any questions about the taxability of insurance benefits, you should consult the state and federal tax authorities or your tax consultant.

 

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