2013 Wisconsin Act 20

20,700 Section 700. 40.02 (18g) of the statutes is amended to read:

40.02 (18g) "Deferred compensation plan" means a plan which is in accordance with section 457 of the internal revenue code Internal Revenue Code, under which an employer executes an agreement by which an employee voluntarily agrees to defer a part of gross compensation for payment at a later date. Deferred compensation plan does not include annuity plans specified under section 403 (b) of the internal revenue code Internal Revenue Code.

20,701 Section 701. 40.02 (31) of the statutes is created to read:

40.02 (31) "Federal annual compensation limits" means any annual compensation limit under section 401 (a) (17) of the Internal Revenue Code, as adjusted for any cost of living increases under section 401 (a) (17) (B) of the Internal Revenue Code, but only with respect to plan years beginning after December 31, 1995, and only with respect to individuals who first became participating employees in plan years beginning after December 31, 1995. This subsection shall be applied in compliance with section 401 (a) (31) of the Internal Revenue Code pursuant to any applicable federal regulations or guidance adopted under the Internal Revenue Code.

20,702 Section 702. 40.02 (33) (a) 1. of the statutes is amended to read:

40.02 (33) (a) 1. The participant's total earnings received or considered to be received under sub. (22) (e), (ef), or (em) and for which contributions are made under s. 40.05 (1) and (2) during the 3 annual earnings periods (excluding any period more than 3 years prior to the effective date for any participating employer) in which the earnings were the highest, subject to the federal annual compensation limits under 26 USC 401 (a) (17) for a participating employee who first becomes a participating employee on or after January 1, 1996; by

20,703 Section 703. 40.02 (33) (b) 1. of the statutes is amended to read:

40.02 (33) (b) 1. For a state elected official who is prohibited by law from receiving an increase in compensation during the official's term of office and who so elects, one-twelfth of the annual salary, subject to the federal annual compensation limits under 26 USC 401 (a) (17) for a participating employee who first becomes a participating employee on or after January 1, 1996, which would have been payable to the participant during the last completed month in which the participant was a participating employee in such a position if the participant had not been prohibited by law from receiving an increase in salary during his or her term of office, but only with respect to service as a state elected official.

20,704 Section 704. 40.02 (33) (c) of the statutes is amended to read:

40.02 (33) (c) For a participant who makes an election under s. 40.30 (2), the monthly rate of earnings applicable under par. (a) or (b), increased as provided under s. 40.30 (4) (b) but subject to the federal annual compensation limits under 26 USC 401 (a) (17) for a participating employee who first becomes a participating employee on or after January 1, 1996.

20,705 Section 705. 40.02 (37m) of the statutes is created to read:

40.02 (37m) "Health savings account" means a health savings account described in 26 USC 223.

20,706 Section 706. 40.02 (37r) of the statutes is created to read:

40.02 (37r) "High-deductible health plan" has the meaning given in 26 USC 223 (c) (2).

20,707 Section 707. 40.02 (39m) of the statutes is amended to read:

40.02 (39m) "Internal revenue code Revenue Code" means the federal internal revenue code Internal Revenue Code of 1986, under Title 26, USC, as amended, and applicable federal regulations adopted by the federal department of the treasury, including temporary regulations.

20,708 Section 708. 40.02 (48g) of the statutes is renumbered 40.02 (25g) and amended to read:

40.02 (25g) "Public Eligible retired public safety officer" has the meaning given in 26 USC section 402 (I) (l) (4) (C) (B) of the Internal Revenue Code.

20,709 Section 709. 40.02 (48m) (e) of the statutes is amended to read:

40.02 (48m) (e) The determination of the alternate payee share does not require that benefits be paid to the alternate payee if those benefits are also required to be paid to another alternate payee or to the internal revenue service under a lien placed on the participant's account under 26 USC section 64 of the Internal Revenue Code.

20,709c Section 709c. 40.02 (54) (L) of the statutes is repealed.

20,710 Section 710. 40.03 (1) (am) of the statutes is amended to read:

40.03 (1) (am) Shall ensure that the Wisconsin retirement system complies with the internal revenue code Internal Revenue Code as a qualified plan for income tax purposes and shall ensure that each benefit plan is administered in a manner consistent with all internal revenue code Internal Revenue Code provisions that authorize and regulate the benefit plan.

20,711 Section 711. 40.03 (2) (ig) of the statutes is amended to read:

40.03 (2) (ig) Shall promulgate, with the approval of the group insurance board, all rules required for the administration of the group health, long-term care, income continuation or life insurance plans established under subchs. IV to VI and health savings accounts under subch. IV.

20,712 Section 712. 40.03 (2) (t) of the statutes is amended to read:

40.03 (2) (t) Shall ensure that the Wisconsin retirement system complies with the internal revenue code Internal Revenue Code as a qualified plan for income tax purposes and shall ensure that each benefit plan is administered in a manner consistent with all internal revenue code Internal Revenue Code provisions that authorize and regulate the benefit plan.

20,713 Section 713. 40.03 (2) (vm) of the statutes is created to read:

40.03 (2) (vm) Annually, before July 1, shall submit a report to the secretary of administration and the joint committee on finance on the department's progress in modernizing its business processes and integrating its information technology systems.

20,714 Section 714. 40.03 (6) (c) of the statutes is repealed and recreated to read:

40.03 (6) (c) Shall not enter into any agreement to modify or expand benefits under any group insurance plan, unless the modification or expansion is required by law or would maintain or reduce premium costs for the state or its employees in the current or any future year. A reduction in premium costs in future years includes a reduction in any increase in premium costs that would have otherwise occurred without the modification or expansion. This paragraph shall not be construed to prohibit the group insurance board from encouraging participation in wellness or disease management programs or providing optional coverages if the premium costs for those coverages are paid by the employees.

20,715 Section 715. 40.03 (6) (cm) of the statutes is created to read:

40.03 (6) (cm) 1. Notwithstanding ss. 111.321, 111.322, and 111.35, beginning in 2014, the group insurance board shall impose a premium surcharge for health care coverage under ss. 40.51 (6) and 40.515 for eligible employees who use tobacco products and may require the retroactive payment of any premium surcharges by an eligible employee who falsely claims that he or she does not use tobacco products, to the extent permitted under federal law.

2. The premium surcharges paid by annuitants who use tobacco products shall be used to reduce future health care coverage premiums for annuitants and to reimburse the department for costs incurred by the department in providing health care coverage to annuitants. Annually, the secretary of administration shall determine the surcharge amounts that are to be used to reimburse the department for costs incurred by the department in providing health care coverage to annuitants and shall transfer that amount to the appropriation account under s. 20.515 (1) (w).

20,716 Section 716. 40.03 (6) (k) of the statutes is created to read:

40.03 (6) (k) Shall establish health savings accounts for state employees who select a high-deductible health plan under s. 40.515 for their health care coverage plan.

20,716b Section 716b. 40.04 (4) (a) 1. of the statutes is amended to read:

40.04 (4) (a) 1. Credited with all employee contributions made under s. 40.05 (1), all employer additional contributions made under s. 40.05 (2) (g) 1., all additional contributions under s. 40.05 (2) (g) 2. and all contribution accumulations reestablished under s. 40.26 or 40.63 (10).

20,716d Section 716d. 40.04 (4) (a) 3. of the statutes is amended to read:

40.04 (4) (a) 3. Debited by the amount available in any participant's account for funding a benefit elected by the participant or the participant's beneficiary. When the amount available has been applied to funding the benefit, no further right to the amounts, or to corresponding creditable service and employer contribution accumulations, shall exist other than the right to the annuity or benefit so granted except as provided in s. 40.26 or 40.63 (10).

20,716f Section 716f. 40.04 (4) (c) of the statutes is amended to read:

40.04 (4) (c) Whenever a participant's account is reestablished under s. 40.26 (2) or 40.63 (10), in lieu of interest credits as provided in par. (a), any balances remaining in the account at the end of the calendar year in which reestablished shall be credited with interest at one-twelfth the assumed benefit rate for the year for each full month between the date the account was reestablished and the end of the calendar year.

20,716h Section 716h. 40.04 (5) (d) of the statutes is amended to read:

40.04 (5) (d) Credited as of the date of termination of any annuity under s. 40.26 or 40.63 (9) (c) with the excess of the then present value of the terminated annuity over the aggregate amount of credits reestablished in the accounts of the participant.

20,716j Section 716j. 40.04 (6) of the statutes is amended to read:

40.04 (6) An annuity reserve shall be maintained within the fund to which shall be transferred amounts equal to the present value as of the date of commencement of annuities granted under this chapter. The reserve shall be increased by investment earnings at the effective rate and shall be reduced by the aggregate amount of annuity payments and death benefits paid with respect to the annuities and by the present value at the date of termination of annuities terminated in accordance with s. 40.08 (3), 40.26 or 40.63 (9) (c).

20,717 Section 717. 40.04 (10) of the statutes is amended to read:

40.04 (10) An accumulated sick leave conversion account shall be maintained within the fund, to which shall be credited all money received under s. 40.05 (4) (b), (bc), (bf), (bm), (br), and (bw) for health insurance premiums, as dividends or premium credits arising from the operation of health insurance plans and from investment income on any reserves established in the fund for health insurance purposes for retired employees and their surviving dependents, and for the payment of any employer share of OASDHI contributions for sick leave credits used to pay health insurance premiums for dependents who are not tax dependents under the Internal Revenue Code. Premium payments to health insurers authorized in s. 40.05 (4) (b), (bc), (bf), (bm), and (bw) shall be charged to this account. This subsection does not prohibit the direct payment of premiums to insurers when appropriate administrative procedures have been established for direct payments.

20,718 Section 718. 40.04 (11) of the statutes is amended to read:

40.04 (11) A health insurance premium credit account shall be maintained within the fund, to which shall be credited all moneys received under s. 40.05 (4) (by) for the payment of health insurance premiums, as dividends or premium credits arising from the operation of health insurance plans and from investment income on any reserves established in the fund for health insurance purposes for retired employees and their surviving dependents, and for the payment of any employer share of OASDHI contributions for health insurance premium credits used to pay health insurance premiums for dependents who are not tax dependents under the Internal Revenue Code. Premium payments to health insurers authorized in subch. IX may only be charged to this account after all other health insurance premium credits under s. 40.05 (4) (b), (bc), (bf), (bm) and (bw) are exhausted. This subsection does not prohibit the direct payment of premiums to insurers when appropriate administrative procedures have been established for direct payments.

20,719 Section 719. 40.04 (12) of the statutes is created to read:

40.04 (12) The department shall establish and maintain a separate account in the fund to which shall be credited all moneys received from employees and employers in connection with health savings accounts established under s. 40.515.

20,720 Section 720. 40.05 (1) (intro.) of the statutes is amended to read:

40.05 (1) Employee retirement contributions. (intro.) For Wisconsin retirement system purposes employee contributions on earnings for service credited as creditable service shall be subject to the federal annual compensation limits under 26 USC 401 (a) (17) for a participating employee who first becomes a participating employee on or after January 1, 1996, and shall be made as follows:

20,721 Section 721. 40.05 (1) (a) 5. of the statutes is amended to read:

40.05 (1) (a) 5. Additional contributions may be made by any participant by deduction from earnings or otherwise or may be provided on behalf of any participant in any calendar year in which the participant has earnings, subject to any limitations imposed on contributions by the internal revenue code Internal Revenue Code, applicable regulations adopted under the internal revenue code Internal Revenue Code and rules of the department.

20,722 Section 722. 40.05 (1) (a) 6. of the statutes is amended to read:

40.05 (1) (a) 6. Under the rules promulgated under s. 40.03 (2) (r), additional contributions, other than the first $5,000 of contributions, or a beneficiary's prorated share thereof, that are attributable to a death benefit paid under s. 40.73, may be made to the core annuity division by any participant by rollover contribution of a payment or distribution from a pension or annuity qualified under section 401 of the Internal Revenue Code, subject to any limitations imposed on contributions by the Internal Revenue Code, applicable regulations adopted under the Internal Revenue Code, and rules of the department.

20,723 Section 723. 40.05 (2) (intro.) of the statutes is amended to read:

40.05 (2) Employer retirement contributions. (intro.) For Wisconsin retirement system purposes and subject to the federal annual compensation limits under 26 USC 401 (a) (17) for a participating employee who first becomes a participating employee on or after January 1, 1996:

20,724 Section 724. 40.05 (2r) (a) of the statutes is amended to read:

40.05 (2r) (a) Contributions made under this section are subject to the limitations under s. 40.32 and the internal revenue code Internal Revenue Code.

20,725 Section 725. 40.05 (2r) (b) (intro.) of the statutes is amended to read:

40.05 (2r) (b) (intro.) If a participant in the Wisconsin retirement system also participates in a different retirement plan offered by an employer that is subject to section 401 of the internal revenue code Internal Revenue Code and the internal revenue service seeks to disqualify one or more of the plans because the aggregate contributions to the plans exceed the contribution limits under section 415 of the internal revenue code Internal Revenue Code, the internal revenue service, if it permits state law to determine the order of disqualification of such retirement plans, shall disqualify the retirement plans in the following order:

20,726 Section 726. 40.05 (4) (ag) 2. of the statutes is amended to read:

40.05 (4) (ag) 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 each tier with the lowest employee premium cost under s. 40.51 (6), as determined annually by the director of the office of state employment relations under par. (ah).

20,727 Section 727. 40.05 (4) (ah) of the statutes is renumbered 40.05 (4) (ah) 1.

20,728 Section 728. 40.05 (4) (ah) 2. of the statutes is created to read:

40.05 (4) (ah) 2. For purposes of establishing the amount that employees are required to pay for health insurance premiums, if a tier under s. 40.51 (6) contains no health insurance plans, but that tier is used to establish the premium amounts for employees who work and reside outside of the state, the amount these employees are required to pay shall be based on the premium contribution amount for that tier in the prior year, adjusted by the average percentage change of the premium contribution amount of the other tiers from the prior year.

20,729 Section 729. 40.05 (4) (ah) 3. of the statutes is created to read:

40.05 (4) (ah) 3. A craft employee shall pay 100 percent of health insurance premiums, unless otherwise determined by the director.

20,730 Section 730. 40.05 (4) (ah) 4. of the statutes is created to read:

40.05 (4) (ah) 4. Annually, the director shall determine the amount of contributions, if any, that the state must contribute into an employee's health savings account under s. 40.515 and the amount that employees are required to pay for health insurance premiums for a high-deductible health plan under s. 40.515.

20,731 Section 731. 40.05 (4) (ah) 5. of the statutes is created to read:

40.05 (4) (ah) 5. For purposes of establishing the amount that employees are required to pay for health insurance premiums, the director shall consider the amount of premium surcharges that employees are required to pay under s. 40.03 (6) (cm) 1.

20,732 Section 732. 40.05 (4r) of the statutes is amended to read:

40.05 (4r) Payment of certain insurance premiums. If an annuitant is a an eligible retired public safety officer and receives health care coverage or long-term care coverage under a plan other than one offered under subch. IV, and if the annuitant so elects by providing written notice to the department, the premium shall be paid as a deduction under s. 40.06 (1) (a) from the annuitant's annuity. If the annuitant receives an annuity that is not sufficient to cover premium payments, the annuitant shall make premium payments directly to the insurer. The department shall establish procedures to permit an annuitant who is a an eligible retired public safety officer to elect to have his or her premium paid as a deduction under s. 40.06 (1) (a) from his or her annuity. The annuitant shall provide the department with all necessary information to permit the department to make the payment in a timely manner.

20,733 Section 733. 40.07 (1r) of the statutes is created to read:

40.07 (1r) Upon request of the department of revenue, the department may disclose information, including social security numbers, to the department of revenue concerning an annuity only for the following purposes:

(a) To administer the payment of state taxes.

(am) To aid in collecting debts owed to the department of revenue.

(b) To locate participants, or the assets of participants, who have failed to file tax returns, underreported their taxable income, or who are delinquent debtors.

(c) To identify fraudulent tax returns and credit claims.

(d) To provide information for tax-related prosecutions.

20,733m Section 733m. 40.08 (1m) (f) 2. of the statutes is amended to read:

40.08 (1m) (f) 2. Subject to subd. 3., if the participant is an annuitant on the decree date, the annuity shall be recomputed using the total value of the participant's account determined under par. (b) reduced by the total of the alternate payee share transferred under par. (e) 1., in accordance with the actuarial tables in effect and using the participant's age on the decree date. The decree date shall be the effective date of recomputation. If the optional annuity form before division of the participant's account under par. (b) was not a joint and survivor annuity with the alternate payee as the named survivor, the same annuity option with no change in the remaining guarantee period, if any, shall be continued upon recomputation to the participant. The present value of the alternate payee's share of the annuity after division shall be paid to the alternate payee as a straight life annuity based on the age of the alternate payee on the decree date. The alternate payee's annuity shall have the same remaining guarantee period, if any, as the participant's annuity. If the optional annuity form before division of the participant's account under par. (b) was a joint and survivor annuity with the alternate payee as the named survivor, the present value of the annuity after division shall be paid to both the participant and the alternate payee as a straight life annuity based upon their respective ages on the decree date. If the participant's account is reestablished under s. 40.26 (2) after the decree date, the memorandum account created under s. 40.26 (2) (b) shall be adjusted by the total of the alternate payee share computed under this subdivision. If the participant's account is reestablished under s. 40.63 (10) after the decree date, the amounts and creditable service reestablished shall be reduced by an amount equal to the percentage of the alternate payee share computed under this subdivision.

20,734 Section 734. 40.08 (2) (b) of the statutes is amended to read:

40.08 (2) (b) If permitted under a deferred compensation plan established under subch. VII, insurance premiums for health or long-term care insurance coverage for a an eligible retired public safety officer may be deducted from an amount distributed under a deferred compensation plan and paid directly to an insurer.

20,735 Section 735. 40.08 (14) of the statutes is amended to read: