Publications

Group Health Insurance for Retirees

ET-4112, Rev. 6/2005

Obtaining Coverage When Not Currently Covered

Local Public Employees Only

If you are not currently covered under the Wisconsin Public Employers Group Health Insurance program, but are interested in annuitant health insurance coverage when you retire, please contact this Department for brochure ET-2156, entitled Local Annuitant Health Program.

Requirements to Continue Insurance

If you are insured under our group health insurance program, you are entitled to continue the insurance for life when you receive a Wisconsin Retirement System (WRS) retirement or disability annuity. Your surviving insured spouse and/or dependents are also entitled to continue group coverage upon your death if family coverage is in force when you die.

Regular Retirement

To continue coverage you must retire on an “immediate annuity,” which is defined as an annuity that begins within 30 days after you terminate employment. If you are on an unpaid leave of absence immediately prior to termination, and your coverage has lapsed due to non-payment of premiums, your coverage will be reinstated if you take an immediate annuity and file a health insurance application with this Department by the date of your first annuity payment.

Your coverage is continued if you terminate employment after age 55 (50 for protective category employees) and have at least 20 years of creditable WRS service, even if you do not take an immediate retirement annuity.

If you are a state employee who can continue coverage and have accumulated sick leave credits, your coverage will be continued automatically and your premiums will be deducted from your sick leave credits. You may also be eligible to escrow your sick leave credits for use at a later date (see sick leave escrow). If you do not have sick leave credits, deductions for premiums will be automatically taken from your monthly annuity. If your monthly annuity is insufficient to cover the entire premium cost, you will be billed for the premium from your health insurance carrier.

If you are a local government employee, you may continue coverage after you retire. Your employer must complete and submit an Employer Verification of Health Insurance form (ET-4814) to this Department when you retire.

Terminating Before Minimum Retirement Age With 20 Years of Service

If you are an insured state employee who leaves state service before your minimum retirement age, you are not eligible for an immediate annuity. If you have at least 20 years of creditable WRS service and you do not close your WRS account, you may continue coverage under the state group plan indefinitely. You are required to pay the full premiums; you cannot use sick leave credits to pay your premiums or escrow your sick leave credits until you begin an annuity (lump sum or monthly). However, your sick leave will be preserved until you take a retirement benefit.

If you wish to continue coverage until you begin an annuity, you must complete a Continuation-Conversion Notice form (ET-2311), available through your employer.

If you had a sick leave balance when you terminated employment, you can use the sick leave to pay for coverage after you begin an annuity. You must apply for health insurance by submitting a form ET-2301 to the Department of Employee Trust Funds within 30 days of your application for an annuity in order to convert the sick leave balance to credits to be used for paying premiums. You may also escrow your sick leave credits at this time by submitting an escrow form ET-4305 (Sick Leave Escrow Application).

Disability or Long-Term Disability Insurance (LTDI)

If you are applying for a WRS disability annuity or LTDI benefits you must pre-pay health insurance premiums through your employer until your WRS disability or LTDI benefit is approved by this Department or your coverage will lapse. If you are on an unpaid leave of absence immediately prior to termination and your coverage has lapsed due to non-payment of premiums, your coverage will be reinstated if you take an immediate WRS annuity or LTDI benefit and file a health insurance application with this Department by the date of your first annuity payment. See page 7 for more information about WRS disability and Medicare requirements.

Unused Sick Leave and Disability Benefits

If your compensation plan or contract provides for converting unused sick leave to pay group health insurance premiums, and you qualify for a disability benefit, you can either:

Convert your accumulated sick leave credits to pay health insurance premiums,

Use your accumulated sick leave credits until exhausted. This will extend your last day paid, creditable service, and covered WRS earnings.

Spouse or Dependents

If you have family coverage in force, your insured spouse and/or any dependent children are eligible to apply for continuation if they lose coverage due to any of these events:

Your death.
You terminate employment (for any reason other than gross misconduct) or your hours of employment reduce to less than the number required for WRS participation.
Divorce.
Your dependent child loses dependent status.

You or a family member must notify your employer (if you are actively employed by a WRS employer) or this Department (if you are not actively employed by a WRS employer) of any of the events listed above. You (or your dependents) will then be notified of your rights to elect continuation coverage and will have 60 days after the date coverage would cease to apply for the continuation coverage.

Upon your death as an active state employee, your spouse or dependents covered under your family coverage may obtain comparable health insurance coverage and escrow your sick leave credits. If, upon your death as a former state employee, you have escrowed sick leave credits and have comparable health insurance, your spouse or dependents may be eligible to continue to escrow your sick leave credits. To do so, your spouse and dependents had to be insured at the time of your death under the state group health insurance or, if your sick leave is escrowed, had comparable health insurance coverage. Sick leave credits may be escrowed indefinitely. To be eligible to escrow your sick leave credits, the Department must receive your spouse’s or dependent’s application to escrow no later than 90 days after your date of death or 30 days after the Department supplies the survivor with the health insurance information.

Types of Coverage

There are two types of coverage available: "family" and "single." Family coverage means more than one person is insured. The family coverage premium is the same whether there are two or more persons covered. Single coverage is for one person only.

The insurance plan you have in force prior to applying for a retirement or disability benefit will continue. If you have family coverage in force, upon your death your surviving insured dependents may apply for family or single coverage, whichever is appropriate.

Changing Coverage

You may change from single to family coverage (or vice versa) by filing an application with this Department. Be sure to read the It's Your Choice brochure carefully as there are some restrictions when adding spouse and children to your contract, especially if applications are not filed promptly upon marriage, birth, etc. Health insurance application forms can be obtained from the Department of Employee Trust Funds.

Changing Health Insurance Plans

Each fall there is a Dual-Choice Enrollment period during which you may change your health insurance plan to any other plan available. Any change in plans becomes effective on the following January 1. Under most circumstances, Dual-Choice is the only time you can change from one plan to another.

You may also change plans if you move out of your current plan's service area for a period of at least three months. An application must be received within 30 days after the move to ensure continuous coverage. You may change to the Standard plan at any time, but a 180-day waiting period for pre-existing conditions will apply unless you apply for the change during the Dual-Choice Enrollment period or because of moving from your current plan's service area.

Premiums

Amount

The total premiums for active and retired employees are exactly the same. However, the employer normally pays part or all of the premiums for active employees. The amount paid by retired employees and surviving spouses and dependents is higher because the employer does not pay a portion of the premiums. A Health Insurance Rate Sheet (ET-4701 for state retirees or ET-1730 for local retirees) is available through this Department. Rates are subject to change each January 1. Retired employees who are enrolled in Parts A and B of Medicare will have lower premium rates.

Method of Payment for State Employees

Your coverage will automatically be continued after retirement and premiums paid as described below.

From Accumulated Sick Leave. If you have accumulated sick leave credits:

when you retire, or
terminate employment after you have 20 years of WRS creditable service and are eligible for an immediate annuity but defer application, or
after your disability annuity or LTDI benefit approval date, or
after your death,
your premiums (or your family’s premiums if you are deceased) will be deducted from these sick leave credits if you meet the eligibility requirements.

Sick leave credits can only be used to pay group health insurance premiums for coverage under the State of Wisconsin Group Health Insurance Program. There is no cash value for this benefit. You cannot withdraw money from this account.

If you retire and are also a dependent on your spouse’s state group health insurance contract, your sick leave credits will be placed in an inactive account until your spouse retires and depletes his or her own sick leave credits; then your sick leave credits will be used. Both you and your spouse must meet the eligibility requirements for an immediate annuity.

Sick Leave Escrow

As described above, under many circumstances your health coverage will continue automatically, using sick leave, if available. If you do not want to use your sick leave because you have comparable coverage elsewhere, you may escrow (delay using) your sick leave credits for an indefinite time if you:

have accumulated sick leave credits, and
are covered by the State of Wisconsin Employees Group Health Insurance Program on your retirement date, and
are covered by comparable health insurance thereafter, and
take an immediate annuity or are eligible to take an immediate annuity and have 20 years of creditable WRS service.

If you die while your sick leave is escrowed, your eligible survivor may continue the escrow you had in place. They will also have the same annual re-enrollment opportunity as well as the requirement to re-enroll when they lose other comparable coverage.

Contact this Department at retirement if you may be eligible to escrow so that you can file the necessary forms within the time limit. When you re-enroll for coverage in the state’s program, you will need to do so during the annual dual choice period. Submit an application to the Department at that time. Coverage will be effective January 1 of the following year, or any other date you specify during that year. You may also re-enroll at any time to coincide with the loss of comparable coverage if all eligibility for comparable coverage is lost. You must apply within 30 days of the loss.

The amount of sick leave credit is determined by multiplying your highest hourly wage earned while employed with the state by your total number of hours of accumulated sick leave. Your employer certifies your hours of accumulated sick leave to this Department.

NOTE: If you have at least 15 years of continuous state service at the time of retirement, you may be eligible to participate in the Supplemental Health Insurance Conversion Credit (SHICC) program for sick leave credits. Please contact your employer regarding your eligibility to participate in the program.

When your sick leave credits are depleted, premiums will be paid by:

Deductions from an Annuity. Premiums will be deducted each month from your retirement, disability or beneficiary annuity. If the annuity is not large enough to cover the premiums, then:
Direct Billing. The health plan will bill you directly.

Method of Payment for Local Employees

Your premiums will be paid in one of the following ways:

Through your employer, if your accumulated sick leave credits can be converted to credits to pay health insurance premiums and/or if your employer pays part or all of the premiums; or
Deductions from an Annuity. Premiums will be deducted each month from your retirement, disability or beneficiary annuity. If the annuity is not large enough to cover the premiums, then:
Direct Billing. The insurance carrier will bill you for premiums, and you will pay the carrier directly.

Converted Life Insurance

If you are retired and have life insurance coverage through the State of Wisconsin, are at least 66 (67 for Local Government Employees), and have used up all your sick leave credits, you may elect to convert your life insurance to pay health insurance premiums. If you make this election, your life insurance coverage will cease and you will receive credits in a conversion account equal to the present value of your life insurance. The present value ranges from about 44% to 80% of the face amount , depending on your age. The life insurance company, Minnesota Life, will pay health insurance premiums on your behalf from your conversion account until your account is exhausted. You will NOT receive any direct cash payment. You may file the election at any time, and it will be effective at the beginning of the third full month after the Department receives it, if you are eligible on that date. When the life insurance account is exhausted you must resume health insurance premium payments through your WRS annuity or by direct payment to the carrier. Contact this Department for more information or an election form (ET-2324).

Sick Leave Conversion Credit Account

Former State Employees Only

If you are a state retiree and have sick leave credits, a statement is provided each year giving the beginning balance of your sick leave credit account and the current balance.

Termination of Coverage

Your coverage can only be terminated because:

Premiums are not paid.
Coverage is voluntarily cancelled.
Failure to apply for both Medicare Part A and Part B when first eligible. The Medicare enrollment requirement is deferred while you or your spouse are employed and covered under a group health insurance plan from that employment.
Ineligible for coverage as an annuitant because of becoming an active WRS employee.
Fraud is committed in obtaining benefits or inability to establish a physician/patient relationship. Termination of coverage for this reason requires Group Insurance Board approval.
Death of subscriber.

To voluntarily terminate your health insurance coverage, you must notify this Department in writing. Coverage will terminate the first of the month after the Department receives your written request.

If you have single coverage in force on the date of your death, coverage terminates on that date. Your surviving dependents are not eligible for group insurance coverage and, for state employees, any unused sick leave credits are lost. Premiums are collected through the end of the month of death.

Former State Employees

Re-Enrollment in State Group Coverage for Those Who Do Not Have Perserved or Escrowed Sick Leave

If you terminate state employment and either do not have group coverage through the state or do not continue your group coverage for any reason, you may subsequently enroll for single or family coverage in the state group plan if you meet one of the following conditions:

You are receiving a monthly annuity or received a lump sum under Wis. Stat. § ETF 40.25(1) from the Wisconsin Retirement System;

OR
You terminated state employment before reaching your minimum retirement age (55 for most employees, 50 for protective category employees) with at least 20 years of creditable service.

You must submit an application to re-enroll. Coverage will be effective on the first day of the seventh month following the Department's receipt of the application. You cannot use any accumulated sick leave credits to pay premiums.

However, as explained in the section below, recent changes in the law provide additional enrollment opportunities that are associated with escrow or preserved sick leave.

RE-ENROLLMENT IN STATE GROUP COVERAGE FOR THOSE WHO HAVE PRESERVED OR ESCROWED SICK LEAVE

“Escrowed” is the term used to describe sick leave credits for a former employee who is eligible to use the credits but does not wish to because they have comparable coverage elsewhere.

“Preserved” sick leave is the term for sick leave that may not be used at the current time but is held for a former employee of the state who has 20 years of creditable WRS service but is not eligible for retirement. The sick leave will become available when the former employee takes a retirement benefit. There is no requirement to have comparable coverage in order to preserve the sick leave.

If you had 20 years of WRS creditable service but were not eligible for an immediate annuity at the time of your termination of employment and had sick leave credits at the time of your termination after July 26, 2003, your sick leave credits are preserved. You may begin using your sick leave credits to pay for health insurance premiums at the time of your retirement. You must submit an application for health insurance (ET-2301) within 30 days from the date the Department receives your application for retirement. The effective date of coverage will be the first of the month following the Department’s receipt of the health insurance application, unless otherwise specified.

Address Changes

Be sure to keep this Department and your insurance carrier advised of your current address to facilitate processing claims.

You may also want to evaluate your health plan choice if you move. While alternate plans (HMOs) provide reimbursement for emergency care outside of their service areas, routine care must be received from the HMOs own physicians. Some HMOs also require that follow-up care after an emergency be received from a plan provider. Only the Standard Plan and Medicare Plus $1,000,000 allow you the flexibility to seek routine care outside of a particular service area. If you move from the service area, either permanently or temporarily (for 3 months or more), you will be permitted to enroll in the Standard Plan, Medicare Plus $1,000,000 or an available HMO, provided an application is submitted within 30 days after your move. The change in plans will be effective on the first day of the month on or after your application is received.

Medicare Requirements

It is mandatory that any insured person enroll in Medicare when first eligible because of age or disability. This provision is deferred until the first Medicare enrollment period after the subscriber’s termination of employment. The subscriber should pursue enrollment information prior to terminating employment. The eligible person(s) must enroll for both portions of Medicare (hospital and medical). If not enrolled as required, the subscriber will be responsible for the portion of claims that Medicare would have covered. Failure to enroll at the next opportunity may result in termination of coverage in the group health insurance program.

This provision is also deferred for anyone who is covered under a Medicare defined Employer Group Health Plan by virtue of the employment of the participant or the participant’s spouse.

Individuals who have contributed to Social Security for only a very short time may be required to pay a premium in order to enroll for Medicare Hospital coverage (Part A). The requirement to enroll for Medicare Hospital coverage is deferred for as long as the individual is subject to the premium payment. Persons so affected should contact the Department of Employee Trust Funds. However, enrollment in Medicare Medical coverage (Part B) is required of everyone, and everyone must pay a premium. The health insurance premium is reduced only if you have both parts of Medicare.

It is your responsibility to notify us when you and other family members enroll in Medicare. We adjust your group health insurance premium to the appropriate Medicare premium after we know the effective date(s) of Medicare coverage. Use a Medicare Eligibility Statement form (ET-4307) to inform us of your Medicare effective date (the form is available from the Department) or send a photocopy of your Medicare card.

Medicare Benefits

With Medicare integration, your health insurance premiums are substantially lowered to reflect the portion of claims paid for by Medicare.

For former state employees covered under the Standard Plan or State Maintenance Plan, your coverage will be changed to the Medicare Plus $1,000,000 plan when you become eligible for Medicare. If you have a family plan and only one insured person becomes Medicare eligible, only that person will be changed to the Medicare Plus $1,000,000 plan.
For former state employees covered under state health insurance plans other than those listed above and for former local employees, the health insurance plan and benefits remain the same when any insured person under the plan becomes eligible for Medicare.