AB58: Bill Text

LRB-1618/1

RAC&TJD:cjs&kjf:md

2011 - 2012 LEGISLATURE

2011 Assembly BILL 58

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.

AB58,1,10 An Act to repeal 40.05 (2m), 40.05 (2n), 40.05 (4) (ar), 111.91 (2) (g) and 111.998 (2) (d); to amend 20.515 (1) (ut), 20.866 (2) (xf), 40.02 (25) (b) 2., 40.03 (6) (c), 40.03 (6) (j), 40.04 (2) (a), 40.04 (2) (e), 40.05 (1) (a) (intro.), 40.05 (1) (a) 1., 40.05 (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), 40.51 (7), 40.52 (3), 49.175 (1) (zh), 71.05 (6) (b) 47., 111.91 (1) (cm) and 111.998 (1) (d); to repeal and recreate 40.05 (4) (ag) 1. and 2.; to create 59.875, 62.623 and 66.0518 of the statutes; and to affect 2009 Wisconsin Act 28, section 9222 (1d); relating to: state finances, compensation and fringe benefits of public employees, the Medical Assistance program, granting bonding authority, and making 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.

State Government

State finance

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

Medical Assistance

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 systems.

Public assistance

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 Section 1. 20.515 (1) (ut) of the statutes is amended to read:

AB58,5,6 20.515 (1) (ut) Health insurance data collection and analysis and other consulting services contracts. From the public employee trust fund, the amounts in the schedule for the costs of contracting for insurance data collection and analysis services under ss. 40.03 (6) (j) and 153.05 (2r) and other consulting services contracts under s. 40.03 (6) (j).

AB58, s. 2 Section 2. 20.866 (2) (xf) of the statutes is amended to read:

AB58,5,18 20.866 (2) (xf) Building commission; refunding tax-supported and self-amortizing general obligation debt incurred before July 1, 2011. From the capital improvement fund, a sum sufficient to refund the whole or any part of any unpaid indebtedness used to finance tax-supported or self-amortizing facilities. The state may contract public debt in an amount not to exceed $309,000,000 $474,000,000 for this purpose. Such indebtedness shall be construed to include any premium and interest payable with respect thereto. Debt incurred by this paragraph shall be incurred before July 1, 2011, and shall be repaid under the appropriations providing for the retirement of public debt incurred for tax-supported and self-amortizing facilities in proportional amounts to the purposes for which the debt was refinanced.

AB58, s. 3 Section 3. 40.02 (25) (b) 2. of the statutes is amended to read:

AB58,6,3 40.02 (25) (b) 2. Any person employed as a teaching assistant or graduate assistant and other employees-in-training as are designated by the board of regents of the university, who are employed on at least a one-third full-time basis.

AB58, s. 4 Section 4. 40.03 (6) (c) of the statutes is amended to read:

AB58,6,16 40.03 (6) (c) Shall not enter into any agreements to modify or expand group insurance coverage in a manner which conflicts with this chapter or rules of the department or materially affects the level of premiums required to be paid by the state or its employees, or the level of benefits to be provided, under any group insurance coverage. This restriction shall not be construed to prevent modifications required by law, prohibit the group insurance board from modifying the standard plan to establish a more cost effective benefit plan design or providing optional insurance coverages as alternatives to the standard insurance coverage when any excess of required premium over the premium for the standard coverage is paid by the employee, prohibit the group insurance board from encouraging participation in wellness or disease management programs, or prohibit the group insurance board from providing other plans as authorized under par. (b).

AB58, s. 5 Section 5. 40.03 (6) (j) of the statutes is amended to read:

AB58,6,22 40.03 (6) (j) May contract with the department of health services and may contract with 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, as well as for any other consulting services related to plans offered by the group insurance board.

AB58, s. 6 Section 6. 40.04 (2) (a) of the statutes is amended to read:

AB58,7,4 40.04 (2) (a) An administrative account shall be maintained within the fund from which administrative costs of the department shall be paid, except charges for services performed by the investment board, costs of medical and vocational evaluations used in determinations of eligibility for benefits under ss. 40.61, 40.63 and 40.65 and costs of contracting for insurance data collection and analysis services and other consulting services under s. 40.03 (6) (j).

AB58, s. 7 Section 7. 40.04 (2) (e) of the statutes is amended to read:

AB58,7,8 40.04 (2) (e) The costs of contracting for insurance data collection and analysis services and other consulting services under s. 40.03 (6) (j) shall be paid from the appropriation under s. 20.515 (1) (ut).

AB58, s. 8 Section 8. 40.05 (1) (a) (intro.) of the statutes is amended to read:

AB58,7,10 40.05 (1) (a) (intro.) Except as provided in Subject to par. (b) and sub. (2n):

AB58, s. 9 Section 9. 40.05 (1) (a) 1. of the statutes is amended to read:

AB58,7,14 40.05 (1) (a) 1. For each participating employee not otherwise specified, 5% of each payment of earnings an amount equal to one-half of all actuarially required contributions, as approved by the board under s. 40.03 (1) (e).

AB58, s. 10 Section 10. 40.05 (1) (a) 2. of the statutes is amended to read:

AB58,7,19 40.05 (1) (a) 2. For each participating employee whose formula rate is determined under s. 40.23 (2m) (e) 2., 5.5% of each payment of earnings an amount equal to one-half of all actuarially required contributions, as approved by the board under s. 40.03 (1) (e).

AB58, s. 11 Section 11. 40.05 (1) (a) 3. of the statutes is amended to read:

AB58,7,23 40.05 (1) (a) 3. For each participating employee whose formula rate is determined under s. 40.23 (2m) (e) 3., 6% of each payment of earnings the percentage of earnings paid by a participating employee under subd. 1.

AB58, s. 12 Section 12. 40.05 (1) (a) 4. of the statutes is amended to read:

AB58,8,3 40.05 (1) (a) 4. For each participating employee whose formula rate is determined under s. 40.23 (2m) (e) 4., 8% of each payment of earnings the percentage of earnings paid by a participating employee under subd. 1.

AB58, s. 13 Section 13. 40.05 (2m) of the statutes is repealed.

AB58, s. 14 Section 14. 40.05 (2n) of the statutes is repealed.

AB58, s. 15 Section 15. 40.05 (4) (ag) 1. and 2. of the statutes are repealed and recreated to read:

AB58,8,11 40.05 (4) (ag) 1. For insured part-time employees other than employees specified in s. 40.02 (25) (b) 2., including those in project positions as defined in s. 230.27 (1), who are appointed to work less than 1,566 hours per year, an amount determined annually by the director of the office of state employment relations.

AB58,8,16 2. For eligible employees not specified in subd. 1. and s. 40.02 (25) (b) 2., an amount not more than 88 percent of the average premium cost of plans offered in the tier with the lowest employee premium cost under s. 40.51 (6). Annually, the director of the office of state employment relations shall establish the amount that the employer is required to pay under this subdivision.

AB58, s. 16 Section 16. 40.05 (4) (ar) of the statutes is repealed.

AB58, s. 17 Section 17. 40.05 (4) (c) of the statutes is amended to read:

AB58,8,22 40.05 (4) (c) The employer shall contribute toward the payment of premiums for the plan established under s. 40.52 (3) not more than the percentage of premium paid by the employer for health insurance coverage under par. (ag) 2 the amount established under s. 40.52 (3).