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Department of Employee Trust Funds
Revised October 5, 2017

Summary of 2017 Wisconsin Act 59

On September 21, 2017, Governor Walker signed the 2017-19 biennial budget into law (2017 Wisconsin Act 59). The Department of Employee Trust Funds has completed an initial review of the law and prepared a summary of the provisions that relate to ETF and its administration of the Wisconsin Retirement System and other benefit programs.

We will continue to keep you posted on legislative developments as they occur. You may also want to monitor the Wisconsin State Legislature website.

  • Domestic Partnership Program – Eliminates the Chapter 40 domestic partnership program on the effective date of the bill. The law does not allow the formation of any new Chapter 40 domestic partnerships after September 22, 2017.
    • Grandfathers existing domestic partnerships for purposes of Wisconsin Retirement System benefits.
    • On January 1, 2018, domestic partners and children of the domestic partner will no longer be eligible for health insurance under the State or Local Group Health Insurance Program.
      • Note: All domestic partners and children of the domestic partner will receive a 36-month COBRA opportunity. COBRA information will be sent from either the member’s employer or from ETF, if the subscriber is retired.
    • Provides that a surviving domestic partner of a member be allowed 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.
    • Domestic partner and children of the domestic partner life insurance coverage will end on January 1, 2018.
    • Domestic partners of duty disability recipients may be eligible for a death benefit if the protective occupation employee’s duty disability qualifying date is prior to the act’s effective date of January 1, 2018.  This is regardless of the protective occupation employee’s date of the death.  The domestic partnership must have occurred before the protective occupation employee’s duty disability qualifying date.
    • Specifies that if a domestic partner, who was in a domestic partnership with a protective occupation employee when the employee qualified for duty disability, subsequently marries their partner, the surviving spouse will continue to be eligible for a duty disability death benefit. The date the employee qualified for duty disability must be before January 1, 2018.
    • Duty disability death benefits will not be payable to the domestic partner of an employee whose duty disability qualifying date is on or after January, 1, 2018.
    • Provides that a surviving domestic partner is not a default beneficiary for purposes of a deferred compensation plan.
    • Domestic partners will no longer be able to participate in the ETF-associated long term care product.
    • Domestic partners will no longer be able to be covered under supplemental benefit plans.
    • Per IRS regulations, if your domestic partner and/or and your partner’s dependent children are your legal tax dependents, then you can continue use your Employee Reimbursement Account and/or Health Savings Account funds to pay for eligible expenses.

The following provisions in the biennial budget were vetoed:

  • Directs GIB to find $63.9 million general purpose revenue 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. Requests that the Legislative Audit Committee direct the Legislative Audit Bureau to conduct an audit of the state’s group health insurance programs and reserves.

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