Ins 8.01 Note
8.Purchase from or sale to a fund by a participating employer of its capital stock if in accord with conditions described in examples 6. and 7. above.
Ins 8.01 History
History: Cr.
Register, August, 1960, No. 56, eff. 9-1-60; am. (1) and (2),
Register, November, 1978, No. 275, eff. 12-1-78; corrections made under s. 13.93 (2m) (b) 5., Stats.,
Register, April, 1992, No. 436.
Ins 8.02
Ins 8.02
"Trust fund or other fund", definition. Ins 8.02(1)
(1) A "trust fund or other fund" constituting an employee welfare fund subject to
ch. 641, Stats., exists where a trustee or trustees, a committee, or other party is designated jointly by one or more employers together with one or more labor organizations, solely by any employer or labor organization, or jointly by employers, or jointly by labor organizations to provide employee benefits a) under an agreement describing their responsibilities and duties, and b) from monies or other property under their control specifically segregated to provide such employee benefits.
Ins 8.02(2)
(2) A fund, program or plan of employee benefits under which benefits are paid to participants directly out of the general funds of an employer or labor union without the actual segregation of monies or other assets to meet liabilities for benefits does not operate through means of a "trust fund or other fund". This is true although a balance sheet reserve account may be maintained for such estimated liabilities. A common plan of such type is a plan of continuation of wages in the event of sickness or accident.
Ins 8.02(3)
(3) A fund, program or plan of employee benefits in which all benefits are provided through insurance contracts issued to an employer or labor union under which premiums are paid out of the general funds of such employer or union directly to the insurance carrier without the interposition of trustees or a fund, although employees may contribute through payroll deductions or otherwise, does not operate through means of a "trust fund or other fund".
Ins 8.02(4)
(4) Under certain forms of insurance or annuity contracts available to pension plans, insurers guarantee that benefits will be paid to participants only to the extent that a fund or account held by them will be sufficient to provide them. Under such contracts, amounts are paid to the insurer for credit to a deposit or accumulation account. The balance in this account is held as a deposit subject to future determinations by the policyholder as to its disposition. Deposit administration contracts with variations thereof, such as immediate participation guarantees, are a common form of contract under which such unallocated funds or accounts are held. Also unallocated funds may be held to supplement or convert, at retirement, reserves under other forms of insurance or annuity contracts. This is common under forms of life or group permanent contracts. Funds, programs or plans of employee benefits which provide benefits through such unallocated funds or accounts held by insurers operate through a"trust fund or other fund". Such funds, programs or plans constitute employee welfare funds under the law irrespective of the parties and methods through which premiums are paid under
sub. (3).
Ins 8.02(5)
(5) A fund, program, or plan of employee benefits operating under a custodian or trust agreement under which a custodian receives employer contributions and purchases shares in an investment trust or other similar arrangement of pooling moneys for investment purposes constitutes an employee welfare fund if:
Ins 8.02(5)(a)
(a) The custodian holds such shares for the fund, program, or plan pending receipt of distribution instructions to be received when a participant in the plan qualifies for a benefit distribution, and
Ins 8.02(5)(b)
(b) The employer contributing to the plan determines when an employee is to be enrolled under the plan and qualifies for a benefit distribution.
Ins 8.02(6)
(6) Where a trust or fund receives contributions from more than one employer and these contributions are commingled for investment purposes, a separate employee welfare fund exists for each employer segment of the trust if separate computations or allocations are made to each employer segment of the trust for the benefit cost, insurance experience, or gains from forfeited benefits arising from participants.
Ins 8.02(7)
(7) Where a trust or fund is established by one employer to hold moneys for 2 or more employee benefit plans for different groups of employees of that employer, one fund exists if all the assets of the trust or fund are available for benefit payments under any of the plans. Where separate accounting is required to be maintained by the trustee, so that only a designated portion of the total trust is available for benefit payments under each plan, an employee welfare fund exists for each plan portion of the trust or fund.
Ins 8.02 History
History: Cr.
Register, July, 1962, No. 79, eff 8-1-62; cr. (4), (5), (6),
Register, October, 1968, No. 154, eff. 11-1-68; am. title, (1) (a), (b), (c) and (d); r. (2) intro. and (a); renum. (2) (b) to be (2), (2) (c) to be (3); r. (2) (d); renum. (3) to be (4) and am.; renum. (4), (5), and (6) to be (5), (6) and (7),
Register, December, 1970, No. 180, eff. 1-1-71; am. (1),
Register, November, 1978, No. 275, eff. 12-1-78; correction made under s. 13.93 (2m) (b) 5., Stats.,
Register, April, 1992, No. 436.
Ins 8.03
Ins 8.03
"Employee benefits", definition. Ins 8.03(1)
(1) The term "employee benefits" under s.
641.07 (2), Stats., must be broadly construed. The definition covers both benefits and services. Section
641.07 (2), Stats., declares that the type of benefits covered by the law are not limited to those specifically enumerated therein.
Ins 8.03 Note
Note: Section 641.07, Stats., was repealed by
2003 WisAct 261.
Ins 8.03(2)
(2) Section
641.07 (2), Stats., enumerates 4 classes of benefits as being among the forms of benefits covered by the law. These are:
Ins 8.03 Note
Note: Section 641.07, Stats., was repealed by
2003 WisAct 261.
Ins 8.03(2)(b)
(b) Benefits in the event of sickness, accident, disability or death.
Ins 8.03(3)
(3) Other types of benefits commonly offered to employees which are covered by the law include:
Ins 8.03(3)(a)
(a) Deferred benefits from profit-sharing savings or stock bonus plans.
Ins 8.03 History
History: Cr.
Register, July, 1962, No. 79, eff. 8-1-62; am. (1) and (2),
Register, November, 1978, No. 275, eff. 12-1-78.
Ins 8.04
Ins 8.04
Registration requirements. Ins 8.04(1)
(1) Every employee welfare fund within the meaning of s.
641.07 (1), Stats., must be registered with the commissioner of insurance within 3 months after the first day on which coverage is provided for any person employed in Wisconsin. For purposes of computing the time in which to register a fund in which the plan is back-dated or provides coverage to participants retroactively, the plan should be construed to provide coverage as of the date of its formal establishment.
Ins 8.04 Note
Note: Section 641.07, Stats., was repealed by
2003 WisAct 261.
Ins 8.04(2)
(2) Registration shall be made on form No. 71-3. A fund which covers more than 25 persons employed in Wisconsin at the time of registration must file a copy of the following documents, if applicable, as a part of such registration:
Ins 8.04(2)(c)
(c) Any separate contract or other instrument under which the fund is administered
Ins 8.04(2)(d)
(d) Collective bargaining agreement(s), or provisions thereof relating to the fund, as currently in force
Ins 8.04(2)(e)
(e) Any booklet or other written material descriptive of the fund which is given or made available to employees
Ins 8.04(3)
(3) An employee welfare fund which does not cover more than 25 persons employed in Wisconsin at the time of registration is not required to submit copies of fund documents when registered; however, if subsequently it provides coverage to more than 25 persons employed in Wisconsin, the fund documents must be submitted with the annual statement for the first year in which more than 25 persons employed in Wisconsin are covered.
Ins 8.04 History
History: Cr.
Register, July, 1962, No. 79, eff. 8-1-62; am. (1),
Register, November, 1978, No. 275, eff. 12-1-78.
Ins 8.05
Ins 8.05
Registration cancellation. When a registered employee welfare fund is merged or consolidated with another fund, or is terminated, or ceases to cover any person employed in Wisconsin, the trustee of such fund must file written notice of such action with the commissioner of insurance within 30 days after its occurrence. Such notice shall be verified by the oath of the trustee of the fund, or if there is more than one trustee, then by the oaths of at least 2 trustees. If more than 25 persons employed in Wisconsin were covered by such fund, the notice shall include a certified true copy of the resolution of the trustees or of the board of directors of the employer or similar authority under which such action was taken.
Ins 8.05 History
History: Cr.
Register, July, 1962, No. 79, eff. 8-1-62.
Ins 8.06
Ins 8.06
Annual statement and notice of number of fund participants in Wisconsin, when required. Ins 8.06(1)
(1) An annual statement on form No. 71-9 must be filed under s.
641.13, Stats., by the trustee of every employee welfare fund subject to
ch. 641, Stats., for each fiscal year of the fund during which coverage is provided to more than 25 persons employed in Wisconsin. The annual statement must be filed within 5 months after the close of the fiscal year of the fund.
Ins 8.06(2)
(2) The trustee of every employee welfare fund subject to
ch. 641, Stats., within 5 months after the close of its first fiscal year during which less than 26 persons employed in Wisconsin were covered, must file a written notice with the commissioner of insurance that less than 26 persons employed in Wisconsin participated in the fund during such year. Such notice will remain in effect for all subsequent years until the first year thereafter during which more than 25 persons employed in Wisconsin participate at any time. The filing of a notice under this rule does not relieve the trustee of a fund from the responsibility to file an annual statement for any year during which more than 25 persons employed in Wisconsin participate in the fund. If an annual statement must be filed for any year after a notice has been filed, the procedure of filing a notice will again apply for the first year thereafter during which coverage is provided to less than 26 persons employed in Wisconsin. Such renewed notices shall have the same force and effect as an initial notice.
Ins 8.06(3)
(3) When an employee welfare plan which covers more than 25 persons employed in Wisconsin is terminated and fund assets are completely distributed or paid over to another fund, an annual statement must be filed under s.
641.13, Stats., within 5 months after the date of final distribution of the fund. Such annual statement must report the affairs of the fund from the date of the last previous annual statement and must reflect the final accounting of the fund for the transfer or distribution of all its assets.
Ins 8.06(4)
(4) When an employee welfare plan is terminated but assets are held for distribution at a later date, the fund remains subject to
ch. 641, Stats., as long as at least one Wisconsin employee participates. Annual statements must be filed by the trustee of any such fund for every year in which more than 25 persons employed in Wisconsin participate at any time. Notice under
sub. (2) must be given for the first fiscal year in which less than 26 persons employed in Wisconsin participate. Notice of termination of the fund must be given in accordance with
s. Ins 8.05.
Ins 8.06 History
History: Cr.
Register, July, 1962, No. 79, eff. 8-1-62; am.
Register, November, 1978, No. 275, eff. 12-1-78.
Ins 8.07
Ins 8.07
"Persons employed in this state". The term "persons employed in this state" as used in
ch. 641, Stats., includes both active employees in Wisconsin and retired or terminated persons participating in the fund who were employed in Wisconsin at the time of retirement or other separation. The term includes anyone whether or not a resident of Wisconsin, who is employed at a place of business maintained by an employer in the state of Wisconsin; however, an employee who is not regularly employed at a place of business maintained by an employer shall be deemed to be employed in Wisconsin if service is performed solely within Wisconsin, or if service is performed partly within Wisconsin and partly outside of Wisconsin and
Ins 8.07(1)
(1) The service outside of Wisconsin is incidental to service within Wisconsin (for example, is occasional, temporary or transitory in nature) or
Ins 8.07(2)
(2) The base of operations is in Wisconsin, or
Ins 8.07(3)
(3) If there is no base of operations, then the place from which the service is directed or controlled is in Wisconsin.
Ins 8.07 Note
Note: Example: A seller who spends 20% of the hours of employment in Wisconsin and who works from a base of operations in Wisconsin would be "employed in this state". A seller who spends 50% of the hours of employment in Wisconsin but who works from a base of operations outside of Wisconsin would not be "employed in this state". A seller whose service is performed primarily in Wisconsin (service outside of the state is only occasional) is"employed in this state" even though the base of operations is in another state or is directed or controlled from another state.
Ins 8.07 History
History: Cr.
Register, July, 1962, No. 79, eff. 8-1-62; am. (intro.),
Register, November, 1978, No. 275, eff. 12-1-78; correction made under s. 13.93 (2m) (b) 5., Stats.,
Register, April, 1992, No. 436.
Ins 8.08
Ins 8.08
Availability of information to fund participants. The following information shall be available to all fund participants, including covered employees and their beneficiaries, contributing employers and participating labor organizations, in the office of the fund at all reasonable hours: (In the case of a fund which is administered solely by an employer or union, a separate fund office may not be maintained. In such case the following information must be available at the principal office of the employer or union in this state.)
Ins 8.08(1)
(1) Copy of registration statement under s.
641.08, Stats., including all current fund documents specified by such statement. A fund which covers less than 26 persons employed in Wisconsin must maintain such documents although it is not required to file them with the commissioner of insurance under
s. Ins 8.04.
Ins 8.08 Note
Note: Section 641.08, Stats., was repealed by
2003 WisAct 261.
Ins 8.08(2)
(2) Copies of annual statements under s.
641.13, Stats., for the 3 latest fiscal years.
Ins 8.08 Note
Note: Section 641.13, Stats., was repealed by
2003 WisAct 261.
Ins 8.08(3)
(3) Copy of latest report of examination of the fund by the commissioner of insurance.
Ins 8.08 History
History: Cr.
Register, July, 1962, No. 79, eff. 8-1-62; am. (1) and (2),
Register, November, 1978, No. 275, eff. 12-1-78.
Ins 8.09
Ins 8.09
Preservation of records. The trustee of every employee welfare fund subject to
ch. 641, Stats., shall maintain the books and records of such fund in sufficient detail to permit a thorough examination of the operations of such fund by the commissioner of insurance for a period of 5 years after the close of the fiscal year of such fund in which the entries in such books or records are made. Such books and records shall include all journals, ledgers, checks, vouchers, invoices, receipts, bank statements, minutes, resolutions, agreements, contracts and other records of original or final entry. The preservation of photographic reproductions of such records shall constitute compliance with the requirements of this rule.
Ins 8.09 History
History: Cr.
Register, July, 1962, No. 79, eff. 8-1-62; am.
Register, November, 1978, No. 275, eff. 12-1-78.
Ins 8.11
Ins 8.11
County and school district self-insured employee health care benefits: excess or stop-loss insurance requirements. Ins 8.11(1)
(1)
Purpose. This section interprets ss.
59.52 (11) (c) and
120.13 (2) (c), Stats., for the purpose of prescribing detailed requirements for excess or stop-loss insurance for self-insured employee health care benefit plans provided by counties or school districts.
Ins 8.11(2)
(2) Scope. This section applies to any county or school district that alone or together with one or more counties or one or more school districts provides employee health care benefits on a self-insured basis to less than 1,000 covered employees.
Ins 8.11(3)(a)
(a) "Aggregate claims" means total actual claim amounts incurred under the employee health care benefit plan during a benefit period.
Ins 8.11(3)(b)
(b) "Aggregate deductible" means the aggregate amount of liability specified in the excess or stop-loss insurance contract at or below which the county or school district remains liable for payments for eligible claims.
Ins 8.11(3)(c)
(c) "Benefit period" means a twelve-month accounting or reporting period of the employee health care benefit plan.
Ins 8.11(3)(d)
(d) "Coinsurance" means a fixed percentage of each claim established in the employee health care benefit plan which the county or school district is obligated to pay for each person covered in the plan.
Ins 8.11(3)(e)
(e) "Covered employees" means employees participating in an employee health care benefit plan.
Ins 8.11(3)(f)
(f) "Employees eligible to participate" means employees who are eligible to be covered employees under the terms of the employee health care benefit plan.
Ins 8.11(3)(g)
(g) "Employee health care benefit plan" means a self-insured plan established by one county or school district or jointly by 2 or more counties or 2 or more school districts to provide health care benefits to employees eligible to participate in the plan.
Ins 8.11(3)(h)
(h) "Expected claims" means the most accurate actuarial estimate of aggregate claims during a benefit period.
Ins 8.11(3)(i)
(i) "Incurred" means to have provided or furnished a service or item to an employee or dependent covered under an employee health care benefit plan for which a charge for a covered expense is made.
Ins 8.11(3)(j)
(j) "Maximums" means the largest total amount of claims per person established by the employee health care benefit plan which the county or school district is obligated to pay.
Ins 8.11(3)(k)
(k) "Paid basis" means the application of a claim payment to the aggregate deductible for the benefit period in which the payment is actually made, regardless of when the claim is incurred.
Ins 8.11(3)(L)
(L) "Quota share reinsurance" means insurance purchased for the employee health care benefit plan which pays the plan a predetermined fixed percentage of each claim.
Ins 8.11(4)
(4) Excess or stop-loss insurance requirements. Ins 8.11(4)(a)(a) Excess or stop-loss insurance required by s.
120.13 (2) (c), Stats., shall provide coverage for all claims incurred during the term of the policy or contract at a level at which an actuary has certified that the probability that aggregate claims will exceed 125% of expected claims is less than 5%.
Ins 8.11(4)(b)
(b) Each employee health care benefit plan shall be covered by one excess or stop-loss insurance policy that satisfies
par. (a), regardless of the number of counties or school districts participating in the plan.
Ins 8.11(4)(c)
(c) Notwithstanding
par. (a), a county or school district that self-insures employee health benefits under a plan in which an actuary has certified that the probability that aggregate claims will exceed 125% of expected claims is less than one-half percent need not purchase excess or stop-loss insurance.
Ins 8.11(5)
(5) Excess or stop-loss insurance provided on a paid basis.
