WRS News Online

Legislative Update

Tarna Hunter
Tarna Hunter

by Tarna Hunter, Director of Strategic Engagement and Government Relations

In June the Joint Committee on Finance took action on the Department of Employee Trust Funds part of the 2017-2019 executive state budget, a proposal of how the state should manage expenses for the next two years. The budget bills, 2017 Assembly Bill 64 and 2017 Senate Bill 30, are currently before JCF and are delayed past the July 1 start of the fiscal biennium.

When the JCF has finished making its recommended changes, the Assembly and Senate further review it and, ultimately, the budget is to be presented to the Governor for signature. The Governor can also veto the bill in whole or in part.

The JCF made modifications to the following provisions (proposals) affecting benefit programs that ETF administers:

  • Domestic Partnership Program — Eliminates the Chapter 40 domestic partnership program on the effective date of the bill; however, grandfathers existing domestic partnerships for purposes of Wisconsin Retirement System benefits. Additionally, group health insurance coverage under a group health plan offered by the Group Insurance Board would no longer be extended to an employee's domestic partner, effective January 1, 2018. It also provides that a surviving domestic partner is not a default beneficiary for purposes of a deferred compensation plan and is not eligible to receive duty disability survivor benefits for deaths occurring on or after January 1, 2018.

    ✔ Modification: The change allows a surviving domestic partner of a member to purchase group health insurance coverage at full price, if the surviving domestic partner was covered by a state group health plan at the time of the member's death.

    It also modifies the provision relating to duty disability benefits to specify that the effective date of January 1, 2018, apply to the date on which the protective occupation employee experienced a work-related injury or was diagnosed with a work-related disease rather than the date of the death of the employee. In addition, specify that if the surviving spouse of a protective occupation participant was either the spouse or the domestic partner of the participant when the participant became disabled, the surviving spouse may be eligible for a death benefit.

  • Self-Insurance Savings — The budget assumes the Group Insurance Board will transition to a self-insured group health model starting January 1, 2018. The projected savings are $20 million GPR in Fiscal Year 2018 and $40 million in General Program Revenue Fiscal Year 2019.

    ✔ Modification: The JCF rejected the self-insurance contracts during their s. 13.10 meeting on June 15. The JCF proposed a number of changes to the group health insurance program during the June 15 executive session, including:

  • Directs GIB to find $63.9 million GPR savings for the 2017-19 biennium, including:

    • $22.7M GPR savings from negotiations
    • $25.8M GPR draw from the reserves (which translates to $68.8m All Funds)
    • $15.4M GPR from aggressive tiering, and/or additional reserve draw down, and/or plan design changes (subject to the 10% employee cost increase limitation).
  • The group health insurance program would maintain its current program structure.
  • Moves the group health insurance program from a 3-tier to a 5-tier structure.
  • Requires that ETF conduct a consumer-driven health plan educational campaign.
  • Increases legislative input and oversight authority over the group health insurance program:
    1. Addition of four GIB members appointed by legislative leadership of each party in both houses;
    2. Senate confirmation of GIB appointees;
    3. Provides that GIB submit a plan by March 1, 2018, to JCF for approval under a 21-working day passive review regarding state program reserves;
    4. Provides for an annual April 1 JCF 21-working day passive review of all proposed benefit changes; and
    5. Request that the Legislative Audit Committee direct the Legislative Audit Bureau to conduct an audit of the group health insurance program and reserves.

ETF will continue reviewing the budget bill to identify all implications for the WRS and ETF-administered benefit programs. After the JCF has finished making recommendations on the budget bill, it becomes a substitute amendment to the Governor's budget bill and is then considered by the full Legislature. The Legislature will deliver an amended budget bill to the Governor for review, approval and/or partial veto of the budget to be effective the day after publication.

For More Information
Executive Budget — 2017 AB 64 and 2017 SB 30
Budget in Brief
ETF Government Relations webpage
Wisconsin State Legislature website
Domestic Partner Benefits webpage

 

 


Tarna Hunter