2011 - 2012 LEGISLATURE
March 22, 2011 - Introduced by Representatives Barca, Grigsby, Mason, Clark,
Roys, Seidel, Shilling, Vruwink, Sinicki, Danou, Ringhand, Jorgensen,
Pope-Roberts, Bewley, Zepnick, Berceau, Staskunas, Fields, D. Cullen,
Steinbrink, Hulsey, Molepske Jr, Young, Hintz, Zamarripa, Bernard
Schaber, E. Coggs, Kessler, Toles, Hebl, Parisi, Richards and Milroy,
cosponsored by Senators Miller, Hansen, Taylor and
Jauch. Referred to
Committee on Labor and Workforce Development.
1An Act to repeal
40.05 (2m), 40.05 (2n), 40.05 (4) (ar), 111.91 (2) (g) and 111.998 2
(2) (d); to amend
20.515 (1) (ut), 20.866 (2) (xf), 40.02 (25) (b) 2., 40.03 (6) (c), 3
40.03 (6) (j), 40.04 (2) (a), 40.04 (2) (e), 40.05 (1) (a) (intro.), 40.05 (1) (a) 1., 40.05 4
(1) (a) 2., 40.05 (1) (a) 3., 40.05 (1) (a) 4., 40.05 (4) (c), 40.23 (2m) (e) 2., 40.32 (1), 5
40.51 (7), 40.52 (3), 49.175 (1) (zh), 71.05 (6) (b) 47., 111.91 (1) (cm) and 111.998 6
(1) (d); to repeal and recreate
40.05 (4) (ag) 1. and 2.; to create
59.875, 62.623 7
and 66.0518 of the statutes; and to affect 2009 Wisconsin Act 28
, section 9222
; relating to: state finances, compensation and fringe benefits of public
9employees, the Medical Assistance program, granting bonding authority, and
10making an appropriation.
Analysis by the Legislative Reference Bureau
Public Sector Retirement systems
Currently, employer and employee required contributions, and the earnings on
these contributions, fund the cost of providing retirement annuities to all public
employees who are covered under the Wisconsin Retirement System (WRS).
Employer required and employee required contribution rates are set on an annual
basis. This bill provides that the employee required contribution rate for general
participating employees and for elected and executive participating employees must
equal one-half of all actuarially required contributions, as determined by the
Employee Trust Funds Board. For protective occupation employees, the bill provides
that the employee required contribution rate must equal the percentage of earnings
paid by general participating employees.
Current law also requires the employer to pay all of the employer required
contributions, but permits the employer to also pay all or part of the employee
required contributions. This bill provides that an employer may not pay any of the
employee required contributions under the WRS or under an employee retirement
system of a first class city or a county having a population of 500,000 or more.
Currently, when a WRS participant terminates employment and becomes
eligible for a retirement annuity, assuming the participant does not receive a money
purchase annuity, the amount of the annuity is determined by multiplying the
participant's final average earnings by the participant's years of creditable service
and by a percentage multiplier. For a protective occupation participant, the
multiplier is either 2 percent or 2.5 percent, depending on whether the person is
covered by social security. For elected officials and executive participating
employees, the multiplier is 2 percent. For all other participants in the WRS, the
multiplier is 1.6 percent. This bill decreases the multiplier for elected officials and
executive participating employees from 2 percent to 1.6 percent for creditable service
that is performed on or after the bill's effective date.
Public sector group insurance
Currently, state employees, as well as employees of public authorities created
by the state, receive health care coverage under plans offered by the Group Insurance
Board (GIB), which plans are assigned to one of three tiers depending on the
employee's premium costs. The employer share of premium costs for employees who
work more than 1,565 hours a year is an amount not less than 80 percent of the
average premium costs under the various health care coverage plans. The amount
for represented employees is subject to collective bargaining and the amount for
nonrepresented employees is established in various compensation plans.
This bill provides that the employer may not pay more than 88 percent of the
average premium cost of plans offered in the tier with the lowest employee premium
cost. For employees who work less than 1,566 hours a year, with exceptions, the
employer must pay an amount determined by the director of the Office of State
Employment Relations (OSER). Under the bill, the actual employer and employee
share of premium costs is established on an annual basis by the director of OSER.
For the remainder of 2011, however, beginning in April 2011, the bill provides
that state employees, as well as employees of public authorities created by the state,
who work more than 1,565 hours a year shall pay $84 a month for individual coverage
and $208 a month for family coverage for health care coverage under any plan offered
in the tier with the lowest employee premium cost; $122 a month for individual
coverage and $307 a month for family coverage for health care coverage under any
plan offered in the tier with the next lowest employee premium cost; and $226 a
month for individual coverage and $567 a month for family coverage for health care
coverage under any plan offered in the tier with the highest employee premium cost.
University of Wisconsin (UW) System graduate assistants and teaching assistants
must pay half of these amounts. Employees who work less than 1,566 hours a year
are required to pay the same amount for health care coverage during 2011 that they
were required to pay before the bill's effective date.
The bill further provides that a local government employer who participates in
the local government health insurance plan offered by GIB may not participate in the
plan if it intends to pay more than 88 percent of the average premium cost of plans
offered in any tier with the lowest employee premium cost.
Current law provides that GIB may not enter into agreements to modify or
expand group insurance coverage in a manner that conflicts with applicable statutes,
or the Department of Employee Trust Funds (DETF) rules, or that materially affects
the level of premiums required to be paid by the state or its employees or the level
of benefits provided under any group insurance coverage. This bill provides that this
restriction does not prevent GIB from encouraging participation in wellness or
disease management programs under any of its group insurance coverage plans. In
addition, the bill provides that this prohibition does not apply to GIB agreements
relating to group insurance coverage for the 2012 and 2013 calendar years.
This bill requires GIB to design health care coverage plans for the 2012
calendar year that, after adjusting for any inflationary increase in health benefit
costs, reduces the average premium cost of plans offered in the tier with the lowest
employee premium cost by at least 5 percent from the cost of such plans offered
during the 2011 calendar year. GIB must include copayments in the health care
coverage plans for the 2012 calendar year and may require health risk assessments
for state employees and participation in wellness or disease management programs.
This bill requires the secretary of employee trust funds to allocate $28,000,000,
from reserve accounts established in the public employee trust fund for group health
and pharmacy benefits for state employees, to reduce employer costs for providing
group health insurance for state employees for the period beginning on July 1, 2011,
and ending on December 31, 2011.
Current law permits GIB to contract with the Department of Health Services
(DHS) and other public or private entities for data collection and analysis services
related to health maintenance organizations and insurance companies that provide
health insurance to state employees. This bill permits GIB to contract for any other
consulting services related to plans it offers.
This bill provides that if DETF determines that an audit of its employee benefit
programs is necessary during the 2011-12 fiscal year, for the purpose of verifying the
eligibility of dependents covered under the programs, DETF must submit a written
request to the secretary of administration to expend an amount not exceeding
$700,000 to conduct the audit.
This bill increases the amount of state public debt that may be contracted to
refund any unpaid indebtedness used to finance tax-supported or self-amortizing
facilities from $309,000,000 to $474,000,000. Such refunded debt must be contracted
before July 1, 2011.
This bill requires the secretary of administration, before July 1, 2011, to lapse
to the general fund, from executive branch appropriations, an amount equal to
$27,891,400; requires the cochairpersons of the Joint Committee on Legislative
Organization to lapse to the general fund, from appropriations to the legislature, an
amount equal to $717,700; requires the governor to lapse to the general fund, from
appropriations to the office of the governor, an amount equal to $37,500; and requires
the chief justice of the supreme court to lapse to the general fund, from
appropriations to the judicial branch, an amount equal to $1,153,400. The lapses
seek to capture employer savings resulting from increases in state employee
payments for health insurance and retirement contributions.
health and human services
Under current law, DHS administers the Medical Assistance (MA) program,
which is a joint federal and state program that provides health services to
individuals who have limited resources. Also under current law, DHS makes
payments from a long-term care general purpose revenue (GPR) appropriation
account, including community aids to counties, payments for certain MA programs,
and social service payments. DHS also currently makes payments for
administration of income maintenance activities among other payments. This bill
decreases the amount that DHS is authorized to spend from the long-term care GPR
appropriation account in fiscal year 2010-11. The bill also increases the amount that
DHS is authorized to spend from the MA program benefits and administration GPR
appropriation accounts, the income maintenance GPR appropriation account, and
the MA trust fund, in fiscal year 2010-11.
In addition, the bill increases the amount that DHS may spend from the GPR
account for fiscal year 2010-11 for the MA program for the purposes of funding the
contribution for indigent health care for Milwaukee County and making capitation
payments to care management organizations and other entities that provide services
to MA recipients under a managed care system for services provided in June 2011
to individuals enrolled in care management organizations and managed care
Reflecting the receipt of emergency contingency funds under the Temporary
Assistance for Needy Families (TANF) block grant program, this bill increases by
$37,000,000 the amount of TANF moneys allocated for the earned income tax credit.
This bill will be referred to the Joint Survey Committee on Retirement Systems
for a detailed analysis, which will be printed as an appendix to this bill.
For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB58, s. 1
20.515 (1) (ut) of the statutes is amended to read:
(ut) Health insurance data collection and analysis and other
3consulting services contracts.
From the public employee trust fund, the amounts in 4
the schedule for the costs of contracting for insurance data collection and analysis 5
services under ss. 40.03 (6) (j) and 153.05 (2r) and other consulting services contracts
6under s. 40.03 (6) (j)
AB58, s. 2
20.866 (2) (xf) of the statutes is amended to read:
(xf) Building commission; refunding tax-supported and
9self-amortizing general obligation debt incurred before July 1, 2011.
From the 10
capital improvement fund, a sum sufficient to refund the whole or any part of any 11
unpaid indebtedness used to finance tax-supported or self-amortizing facilities. 12
The state may contract public debt in an amount not to exceed $309,000,000 13$474,000,000
for this purpose. Such indebtedness shall be construed to include any 14
premium and interest payable with respect thereto. Debt incurred by this paragraph 15
shall be incurred before July 1, 2011, and shall be repaid under the appropriations 16
providing for the retirement of public debt incurred for tax-supported and 17
self-amortizing facilities in proportional amounts to the purposes for which the debt 18
AB58, s. 3
40.02 (25) (b) 2. of the statutes is amended to read:
(b) 2. Any person employed as a
teaching assistant or
assistant and other employees-in-training as are designated by the board of regents 3
of the university, who are employed on at least a one-third full-time basis.
AB58, s. 4
40.03 (6) (c) of the statutes is amended to read:
(c) Shall not enter into any agreements to modify or expand group 6
insurance coverage in a manner which conflicts with this chapter or rules of the 7
department or materially affects the level of premiums required to be paid by the 8
state or its employees, or the level of benefits to be provided, under any group 9
insurance coverage. This restriction shall not be construed to prevent modifications 10
required by law, prohibit the group insurance board from modifying the standard 11
plan to establish a more cost effective benefit plan design or providing optional 12
insurance coverages as alternatives to the standard insurance coverage when any 13
excess of required premium over the premium for the standard coverage is paid by 14
the employee, prohibit the group insurance board from encouraging participation in
15wellness or disease management programs,
or prohibit the group insurance board 16
from providing other plans as authorized under par. (b).
AB58, s. 5
40.03 (6) (j) of the statutes is amended to read:
(j) May contract with the department of health services and may 19
contract with other public or private entities for data collection and analysis services 20
related to health maintenance organizations and insurance companies that provide 21
health insurance to state employees, as well as for any other consulting services
22related to plans offered by the group insurance board
AB58, s. 6
40.04 (2) (a) of the statutes is amended to read:
(a) An administrative account shall be maintained within the fund 25
from which administrative costs of the department shall be paid, except charges for
services performed by the investment board, costs of medical and vocational 2
evaluations used in determinations of eligibility for benefits under ss. 40.61, 40.63 3
and 40.65 and costs of contracting for insurance data collection and analysis services 4and other consulting services
under s. 40.03 (6) (j).
AB58, s. 7
40.04 (2) (e) of the statutes is amended to read:
(e) The costs of contracting for insurance data collection and analysis 7
services and other consulting services
under s. 40.03 (6) (j) shall be paid from the 8
appropriation under s. 20.515 (1) (ut).