1. How are my health benefits affected by changes in employment status?

Permanent Layoff
State contributions toward premiums will be three months of state contribution in addition to any premium prepaid prior to the time of layoff. Arrangements for employee share of premium payment must be made with your benefits/payroll/personnel office prior to the date of layoff. You can elect coverage for up to 36 months under Wis. Stat. 40.02(40). If you have enough sick leave that time period is extended.

Accumulated sick leave credits may be used to pay premiums for up to five years. A written request to use sick leave credit must be submitted to your benefits/payroll/personnel office before the date of layoff.

After 36 months or sick leave credits are exhausted, or if you have no sick leave credits available, COBRA continuation will be offered, which will allow you to purchase, at your own expense, an additional 36 months of coverage.

If you have 20 years of Wisconsin Retirement System (WRS) service at the time of the layoff but were not eligible for an immediate annuity at the time of layoff, any sick leave remaining after paying your premium during layoff is available upon retirement. After five years from the layoff date you cannot use your sick leave until you retire. If you had 20 years of WRS service and were eligible for an immediate annuity at the time of layoff you may continue to use sick leave after five years or begin using it at any time.

Retirement
If you are covered under the State of Wisconsin Group Health Insurance Program when you terminate employment to retire, the health benefit plan will automatically continue if your retirement annuity from the WRS begins within 30 days after employment ends. If you are eligible for Medicare, effective dates must be provided before coverage continues. If you are or become covered under a comparable nonstate health plan at the time of retirement, you may escrow your sick leave credits to pay health premiums for use later. For more information, see Question: Can I initiate or delay use of sick leave credits after I retire? later in this FAQ or contact ETF.

You may be eligible for supplemental sick leave credits if you have at least 15 full years of adjusted continuous service with the State of Wisconsin at the time of retirement (Continuous service means the number of full years the employee has worked for the state without a break in service. Local service does not apply.). Your employer will determine whether you are eligible for supplemental sick leave credits and submit the certification to ETF. If you have questions regarding your eligibility for supplemental sick leave credits contact your payroll office.

If you are an employee who has not been covered in the State of Wisconsin Group Health Insurance Program and want to save your sick leave credits for later use, you may enroll for coverage in the Access Plan 30 days prior to retirement. You must be insured in the Access Plan for one month before terminating employment. More information about these topics can be found in the Sick Leave Credit Conversion Program (ET-4132) brochure.

High Deductible Health Plans (HDHP) and Retirement
Annuitants (retirees) using sick leave credits to pay for the HDHP premium are required to enroll in the state sponsored Health Savings Account (HSA) each year during open enrollment. This also includes subscribers and dependents who maintain HDHP coverage through COBRA continuation.

Medicare Part D

If/when any sick leave credits your employer certified are exhausted, the premium for your combined health and pharmacy benefit will be deducted from your monthly annuity. If the annuity is not sufficient to allow a premium deduction you will be billed directly.

Rehired Retirees

2. How are my health benefits and premiums affected if I return to work for an employer who is under the WRS?

As a state retiree, if you were paying for your health insurance from your converted sick leave credit account, your account will be inactivated if you return to work for a state government employer as a participating employee. Your sick leave credit account will be activated when you retire again. Any sick leave credit you accumulate during re-employment as a participating employee with a state government employer will be added to the balance in your account when you re-retire.

If your re-employment is with a local government employer and you have comparable health insurance coverage you may escrow your sick leave account balance. If the local government employer offers coverage under the Wisconsin Public Employers Group Health Insurance Program administered by ETF, that coverage is comparable to state coverage. Contact ETF or see the Sick Leave Credit Escrow Application (ET-4305). Your sick leave credit account balance will be available to you when you re-retire.

3. How do I pay my portion of the premium?

Premium rates for retired employees are the same as for active employees (except that your premium will decrease when you or a dependent becomes covered by Medicare). However, you employer does not pay any portion. Your premiums are post-tax.

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

  • From your Accumulated Sick Leave Conversion Credits until those credits are exhausted. For more information see How Credits Work. If you choose to escrow (preserve) your sick leave, this can be done at the time of retirement or at a later date. For more information see How to Save Your Sick Leave Credits or contact ETF for the escrow form. Note: If you qualify for a WRS disability benefit, you have the option of being paid your sick leave hours or having them converted to pay your health premiums while you are receiving your disability annuity.
  • If you have no sick leave credits available or your credits are exhausted, then monthly premiums will be paid from deductions from your monthly retirement, disability, or beneficiary annuity payment. Premiums will be automatically deducted in the same month of coverage. If there is no annuity or your annuity is not large enough to deduct premiums, then they will be paid:
  • From direct billings to you. Your health plan will bill you directly for premiums on a monthly basis. Warning: Your coverage will be canceled if you fail to pay your premium in a timely manner. If you are eligible and choose to reenroll, coverage will be effective January 1 following enrollment during the annual open enrollment period. If you are a surviving dependent you are not eligible for reenrollment.
  • From your converted life insurance. If you are retired and have life insurance coverage through the state of Wisconsin, are at least age 66, 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 amount, depending on your age. The life insurance company, Securian Financial Group, will pay health insurance premiums on your behalf from your conversion account until the account is exhausted. You will not receive any direct cash payment. You may file the election at any time, and it will be effective no earlier than 61 days after ETF receives it. For more information and an election form contact ETF. For more information see the brochure Converting Your Group Life Insurance to Pay Health or Long-Term Care Insurance Premiums (ET-2325).

4. Do I have to use my sick leave credits to pay my health premiums?

For more information see How to Save Your Sick Leave Credits. You do not have to use your sick leave credits to pay your health premiums if one of the following is true:

  • You escrow your sick leave, provided you are insured in the state program on your termination date. You may also elect to escrow later if you become covered by comparable health coverage while you are insured in the state program. You may escrow indefinitely as long as you have comparable health coverage continuously during the escrow period. You may elect coverage under any health plan in the state program without waiting periods or exclusions for preexisting conditions when timely reenrolled.
  • You are covered under your spouse's Group Health Insurance Program plan.

Note: You can initiate use of your sick leave credits once a year during the annual open enrollment period. For more information see the Sick Leave Conversion Credit Program (ET-4132) brochure.

5. Can I use my sick leave credits to pay for health insurance premiums outside of the Group Health Insurance Program, like for Medicare Part B?

No. For more information see How Credits Work.

6. What are my coverage options if my spouse is also a state or participating Wisconsin Public Employer (local) employee or retiree?

If you are covered by a spouse’s local employer health insurance you can choose to escrow your sick leave credits. For more information see How to Save Your Sick Leave Credits. If you and your spouse each have individual coverage, no dependents are covered, and if one of you should die, that individual's state sick leave credits will not be available for use by the surviving dependents. Under a family plan, sick leave credits are preserved for the surviving dependents regardless of who should die first.

Death (Surviving Dependents):

If family coverage was in force at the time of death any unused sick leave credits in the deceased employee's account are available to the surviving dependents for premium payments. If sick leave credits are escrowed the surviving dependents may continue to escrow the credits or may apply to convert the credits to pay health insurance premiums.

Note: If individual coverage was in force at the time of death the monthly premiums collected for coverage months following the date of death will be refunded. No partial month's premium is refunded for the month of coverage in which the death occurred.

If you have individual coverage and you should die your sick leave credits will not be available for use by your surviving dependents. Any unused sick leave credits are forfeited. Surviving dependents are not eligible for coverage. For more information see the Sick Leave Conversion Credit Program (ET-4132) brochure.

7. Are there other enrollment opportunities available to me after my initial one expires?

You may be able to get health insurance coverage if you are otherwise eligible under specific circumstances as described below:

  • If you are a retiree, you may take advantage of a special 30-day enrollment period to become insured under the Group Health Insurance Program if the following are true:
    • Your annuity began (or you received a lump-sum retirement benefit) within 30 days after your employment termination date.
    • You have escrowed your sick leave account.
    • You and/or your dependents are not insured under the Group Health Insurance Program because of being insured under another group health insurance plan.
  • Prospective Retirees Only: If you are an employee who is not enrolled under the Group Health Insurance Program as you near retirement, and you wish to enroll in order to escrow or use your sick leave credits to pay for premiums in retirement you must enroll in the Access Plan effective the first of the month prior to retirement. You must have 30 days of employee coverage prior to retirement. You may enroll for individual coverage even though you later intend to initiate the use of sick leave credits and enroll with family coverage. However, if you die while your sick leave credits are escrowed your dependents will not be able to reenroll if they were never previously covered under your contract, and those credits will be forfeited.
  • Former Employees (with 20 years of creditable WRS service who terminated employment prior to becoming eligible for an immediate annuity): You may enroll/reenroll in the Wisconsin Group Health Insurance Program within 30 days after the date ETF receives your application for your annuity regardless of whether or not you had insurance at the time of termination. If you have preserved sick leave credits you may enroll/reenroll and initiate the use of these credits to pay for your coverage even if you have not yet begun your annuity.

For more information see the Life Events Guide and the Sick Leave Conversion Credit Program (ET-4132) brochure.

8. Can I enroll in health insurance coverage during open enrollment since my coverage lapsed after retirement?

You would not be eligible to use any sick leave credits to pay premiums if you enroll under this provision. There are separate enrollment opportunities for members who have escrowed their sick leave. For more information see Other Enrollment Opportunities above or contact ETF for details.

9. Can I initiate or delay use of sick leave credits after I retire? 

For WRS retirees, 40.65 disability or long-term disability insurance recipients, or their surviving insured dependents: Yes, you are eligible to use your sick leave credits, elect to delay use (escrow), or initiate use of sick leave credits annually. For more information see the How to Save Your Sick Leave Credits and/or the How to Reenroll in Health Insurance webpages.

10. What is the health insurance Marketplace and is it an option for me?

The Marketplace, established under the Affordable Care Act, allows individuals to shop for health insurance outside of our program. This may be of interest to retirees who are paying premiums out-of-pocket. Note: Premiums for Marketplace insurance cannot be paid out of sick leave credits or with any employer contribution. For more information see How Credits Work.  After evaluating the benefit levels of the Marketplace, it has been found that gold and platinum level plans are considered comparable coverage for the purposes of escrowing accumulated sick leave conversion credits. Visit healthcare.gov for more information.

11. Does the opt-out incentive affect sick leave conversion rules?

The eligibility criteria for sick leave conversion for state employees remains the same. You must be enrolled in the Group Health Insurance Program to be able to convert unused sick leave time to credits that can be used to purchase health insurance at retirement. Keep in mind, if you opt out of the health insurance program and unfortunately pass away, your unused sick leave time will not be eligible to be converted to sick leave credits by your dependent like it would if you passed away and had family health insurance coverage. Please see the Sick Leave Credit Conversion Program Brochure (ET-4132) for more information on eligibility requirements related to retirement and death benefits for spouses and dependents.