Scope Statements
Employee Trust Funds
Subject
Revises sections
ETF 10.08 and
20.02 for clarification and to maintain compliance with the Internal Revenue Code's (IRC) requirements for a bona fide termination of employment prior to receiving retirement benefits and a minimum break in service in the event the annuitant returns to work with an employer participating in the Wisconsin Retirement System (WRS).
Objective of the Rule
ETF intends to maintain compliance with the IRC by clarifying how the Department administers IRC conditions under section 401 (a) as codified in ss.
ETF 10.08,
20.02, and as governed by s.
40.23 (1) (a) 1., Stats.
Policy Analysis
As the administrator of the WRS, ETF is responsible for ensuring that the WRS complies with all applicable provisions of the IRC in order to maintain the pension plan's tax-qualified status. Section 401 (a) of the IRC requires that an annuitant may only receive retirement distributions following a “good faith" termination of employment. ETF must ensure that retirement distributions follow a Section 401 (a) “good faith" termination.
Termination from WRS employment is administered under Wis. Adm. Code s.
ETF 10.08, and governed by s.
40.23 (1) (a) 1., Stats. A compliant termination from employment requires that all the rule's listed conditions of valid termination be met and that the annuitant fulfill a minimum break in service under s.
ETF 10.08 (2) (c). If an annuitant returns to WRS-covered employment following a separation from service, s.
ETF 20.02 requires the annuitant to have concluded a valid termination from employment under s.
ETF 10.08, and to complete a minimum break in service.
Therefore, the requirements governing 1) separation from service in s.
ETF 10.08, and 2) annuitant rehire in s.
ETF 20.02, overlap significantly. However, the specific language in the two sections fails, in large part, to reflect their relationship. As a result, both sections should be amended to ensure clarity of meaning, compliance with the IRC, as well as to provide for a more transparent interrelationship.
In addition, ETF plans to examine possible changes to other language in ss.
ETF 10.08 and
20.02 to ensure that the provisions accurately and clearly reflect the meaning of “good faith intention to sever employment" under IRC 401 (a) and associated IRS rulings. IRS rulings indicate that a primary criterion evidencing good faith, in the context of separation from employment, is the absence of any pre-separation intent (on the part of the employee and the employer) that the person return to employment with that employer. Sections
ETF 10.08 and
20.02, Wis. Adm. Code, are written to ensure WRS compliance with the IRC in this respect, and to provide notice and guidance to employers and employees that they must truly intend to completely sever employment in order to maintain IRC compliance and therefore protect and ensure their retirement disbursements.
Statutory Authority
Comparison with Federal Regulations
Federal regulations do not contain a definitive rule on a proper “separation from service" (or termination from employment) as set forth in IRC section 401. The meaning is instead explained in revenue rulings and case law. The basic rule is that, in order to receive a distribution, the annuitant must have experienced a good-faith, or bona fide termination of employment in which the employer/employee relationship is completely severed. Wisconsin enacted s.
40.23 (1) (a) 1., Stats. to remain in compliance with federal law as set forth in these rulings and case law. The Wisconsin Statutes establish a minimum break in service, which ETF has codified in ETF 10.08, Separation from Service, and ETF 20.02, Rehired Annuitants.
Entities Affected by the Rule
The proposed amendments will affect WRS-covered employees, annuitants, and WRS employers.
Estimate of Time Needed to Develop the Rule
State employees will spend an estimated 80 hours to develop these rules.
Employee Trust Funds
Subject
Revises Chapter
ETF 11 regarding the procedures for review of appealable department determinations.
Objective of the Rule
ETF proposes to update and clarify the existing uniform system of procedures and rules in Chapter
ETF 11 governing the review of appealable department determinations by the board responsible for the subject matter. This rule will promote efficiency and streamline the existing appeal procedures.
Policy Analysis
ETF has established procedures in Chapter
ETF 11, that govern appeals of ETF determinations. Those determinations concern the various benefit programs administrated by ETF pursuant to Chapter
40, Wis. Stats. The purpose of this rule is to update those appeal procedures to improve and clarify the process for members, the administrative law judge, the boards that decide appeals, ETF, and others who are involved in the process.
Statutory Authority
Comparison with Federal Regulations
No existing or proposed federal regulation addresses the contemplated rule changes.
Entities Affected by the Rule
The Department of Employee Trust Funds and any person appealing from a determination made by the Department of Employee Trust Funds are potentially affected by this rule. Typically, appellants are participants in the Wisconsin Retirement System, a participant's beneficiary or a dependant covered under one of the other benefit plans administered by the Department of Employee Trust Funds who has been denied a benefit, or who takes issue with the computation of the amount of the benefit or with some other aspect of the Department's administration of the benefit plan.
Estimate of Time Needed to Develop the Rule
State employees will spend an estimated 40 hours to develop these rules.
Employee Trust Funds
Subject
Revises Chapter
ETF 20 regarding dividing Wisconsin Retirement System (WRS) accounts and annuities pursuant to a qualified domestic relations order (QDRO).
Objective of the Rule
ETF proposes to amend s.
ETF 20.35 to reflect statutory changes related to domestic partnerships, correct minor drafting errors, and to clarify how QDROs will be implemented in various situations that are currently not addressed in the statutes or rules.
Policy Analysis
ETF is responsible for administering the benefit programs authorized under Chapter
40 of the Wisconsin Statutes. Since s.
ETF 20.35 was promulgated, Chapter
40 was amended in
2009 Wisconsin Act 28 to permit the department to honor a QDRO awarding a portion of a participant's WRS account or annuity to an alternate payee who is a former domestic partner. The purpose of this rulemaking is to amend ETF 20.35 to reflect the provisions in Wisconsin Act 28, as well as to address various situations such as multiple QDROs for the same account or annuity received out of sequence, QDROs received after an alternate payee is deceased, overpayments resulting from amended or rescinded QDROs, grace periods for processing benefit applications when a QDRO has been rejected for technical defects, interest on underpayments for retroactive QDROs, retroactive crediting of military service to alternate payees after an account has been divided, refunds due to a participant for service purchase payments, and how service is determined for calculating the actuarial reduction for an alternate when a participant has part-time service in five of the last two years prior to the decree date.
Statutory Authority
Comparison with Federal Regulations
No existing or proposed federal regulation addresses the contemplated rule changes.
Entities Affected by the Rule
The new rules will affect Wisconsin Retirement System participants and their former spouses and domestic partners.
Estimate of Time Needed to Develop the Rule
State employees will spend an estimated 40 hours to develop these rules.
Insurance
Subject
Revises section
Ins 6.07, Wis. Adm. Code, relating to readability and electronic access to insurance policies.
Objective of the Rule
The Office of the Commissioner of Insurance (Office) proposes to repeal s.
Ins 6.07 (4) (a) 8.,
(4) (d),
(9), Wis. Adm. Code, repeal and recreate s. Ins. 6.07 (4) (a) (intro.), 1., 2. and 5., Wis. Adm. Code.
Policy Analysis
The Office recently modified this rule. The proposed rule would reinstate prior Flesch score requirements for policies and returns print type and listing of exclusions and limitations to their 2010 form. Additionally, the proposed rule would repeal modification to requirements for active voice in policy form language and the necessity to post notices on insurer's websites for accessing insureds' policies.
Statutory Authority
Comparison with Federal Regulations
There is no federal regulation of insurance standardizing readability or electronic access to insurance policies.
Entities Affected by the Rule
Licensed insurance companies and insurance intermediaries.
Estimate of Time Needed to Develop the Rule
200 hours and no other resources are necessary.
Insurance
Subject
Revises sections
Ins 17.01 (3),
17.28 (3) (c) and
(6), Wis. Adm. Code, relating to fiscal year 2012 fund fees, provider classifications, and mediation panel fees and affecting small business.
Objective of the Rule
To establish the annual fees that participating health care providers must pay to the Injured Patients and Families Compensation Fund as required by s.
655.27 (3), Wis. Stat., for the fiscal year beginning July 1, 2011. The proposed rule will update the listing of provider specialties (ISO Codes) by assessment class and will establish the mediation panel fees for fiscal year 2012 commencing on July 1, 2011.
Policy Analysis
Existing policies are set forth in the statutes cited in the next section and in the rules themselves.
Statutory Authority
Comparison with Federal Regulations
There is no existing or proposed federal regulation addressing any medical malpractice fund like the Wisconsin Injured Patients and Families Compensation Fund.
Entities Affected by the Rule
All health care provider participants in the fund as set forth in s.
655.002 (1), Wis. Stat.
Estimate of Time Needed to Develop the Rule
100 hours estimated state employee time to promulgate this rule; other resources will include the review and recommendation of the board's actuarial committee based on the actuarial analysis and recommendation of the fund's actuaries and the director of state courts.
Regulation and Licensing —
Architects, Landscape Architects, Professional Engineers, Designers and Land Surveyors Examining Board
Subject
Creates rules by the Professional Engineers Section relating to education and work experience requirements for registration as a professional engineer and examinations for professional engineering standards.
Objective of the Rule
2009 Wisconsin Act 350 has amended and created new education and work experience requirements for registration as a professional engineer and examinations for professional engineering standards. The promulgation of administrative rules pursuant to the changes that have been established in
2009 Wisconsin Act 350 will be necessary to implement standards for applications for registration as a professional engineer, engineering experience, education as an experience equivalent for registration, examinations and any additional provisions authorized under chapter 443 of the Wisconsin Statutes deemed necessary by the Professional Engineers Section.
Statutory Authority
Comparison with Federal Regulations
There is no existing or proposed federal regulation that is intended to address the activities to be regulated by this rule.
Entities Affected by the Rule
Professional Engineer applicants that apply for a professional engineering credential after May 27, 2010 (the effective date of the new law).
Estimate of Time Needed to Develop the Rule
Total hours: 120. This estimate is based on the time spent by staff and possibly an advisory committee to prepare documents, coordinate public hearings, prepare fiscal estimates and conduct other work related to the promulgation of the administrative rules for this profession.
Regulation and Licensing —
Barbering and Cosmetology Examining Board
Subject
Revises rules of the Barbering and Cosmetology Examining Board pursuant to
2009 Wisconsin Act 189, relating to amended requirements regarding supervision of barber/cosmetologist apprentices.
Objective of the Rule
2009 Wisconsin Act 189 amends and creates a provision within chapter 454, Stats., that allows for a licensed manager to delegate supervisory authority of apprentices to a licensed practitioner that has at least 2000 hours of practical experience. The promulgation of administrative rules pursuant to the changes that have been established in
2009 Wisconsin Act 189 will be necessary to implement better practice standards for the training and supervision of barbering/cosmetology apprentices.
Statutory Authority
Comparison with Federal Regulations
There is no existing or proposed federal regulation that is intended to address the activities to be regulated by this rule.
Entities Affected by the Rule
Barbering/cosmetology managers, practitioners, and apprentices.
Estimate of Time Needed to Develop the Rule
Total hours: 100. This estimate is based on the time spent by staff and possibly an advisory committee to prepare documents, coordinate public hearings, prepare fiscal estimates and conduct other work related to the promulgation of the administrative rules for this profession.
Regulation and Licensing —
Medical Examining Board
Subject
Revises section
RL 4.08 (1) and creates sub. (2) to authorize the Department of Regulation and Licensing (“DRL") to require applicants for the Medicine and Surgery license to provide fingerprints and undergo state and federal criminal background checks prior to DRL granting licenses to the applicants.
Objective of the Rule
DRL seeks the ability to utilize its authority to require applicants for the Medicine and Surgery license to provide fingerprints and undergo state and federal criminal background checks prior to DRL granting licenses to the applicants. DRL is seeking the rule change to better protect the public, to conform to the Federation of State Medical Boards' policy position that background checks should be conducted as part of the licensure process and to comply with the regional expedited endorsement requirements that are being developed through DRL's American Recovery and Reinvestment Act (“ARRA") Grant Program. The Medical Examining Board is motivated, in part, by the ARRA Grant Program and is on record as being in favor of requiring applicants to undergo criminal background checks.
Policy Analysis
The revisions will be based on s.
440.03 (13) (c), Wis. Stats., current trends in the laws and regulations in other states, and the Medical Examining Board's assessment of necessary improvements to enforce the protection of public health and safety.
Statutory Authority
Comparison with Federal Regulations
None.
Entities Affected by the Rule
The entities affected by the rule include DRL Staff, Medical Examining Board, Wisconsin Department of Justice, Federal Bureau of Investigation, Pearson VUE (DRL's designated fingerprint service vendor), applicants for the Medicine and Surgery license and health care consumers.
Estimate of Time Needed to Develop the Rule
Total: 150 Hours.
