Scope statements
Employee Trust Funds
Subject
The Department of Employee Trust Funds proposes to amend s.
ETF 40.01, relating to continued group health insurance coverage of an insured dependent after the death of the insured employee or annuitant.
Policy Analysis
Under s.
40.51, Stats., the Group Insurance Board provides group health insurance programs for eligible state employees and the eligible employees of local units of government in Wisconsin that elect to participate. Eligible Wisconsin Retirement System annuitants may also elect to be covered. The group health insurance plans are required to include provisions for continuation of coverage that, at a minimum, comply with s.
632.897, Stats.
Section
632.897 (2) (b) 3., Stats., requires that if a member dies while covered by group health insurance, then the spouse or dependent who was also covered through the member must be permitted to continue coverage under the group policy (or convert to individual coverage). Under s.
632.897 (2) (d), Stats., the plan sponsor or group policyholder must give written notice to the insured surviving dependents of their right to continuation coverage within 5 days after learning of the death of the insured employee or annuitant. The notice must include the amount of the payment required and the manner, place and time for making payments. As provided by s.
632.897 (3) (a), Stats., each surviving insured dependent, or the parent in the case of a minor, then has 30 days from the date of the notice to apply for continuation coverage and make the initial required payment. If this application is timely received, then the coverage continues without interruption. Continuation coverage may be terminated if the surviving dependent established residence outside Wisconsin, fails to make timely payment of a required premium or becomes eligible for similar coverage under another group policy. If no such events intervene, then a minimum of 18 months of continuation coverage must be allowed. After that, the insurer may compel the survivor to convert to an individual policy in order to continue coverage.
Under the current s.
ETF 40.01 (1), Wis. Adm. Code, an application for health care coverage just be received from the surviving dependent within 90 days after the death of the insured employee (or annuitant) in order for the surviving dependent to continue his or her group health insurance coverage that was in effect prior to the death. Although exceptions to this deadline are not codified, the DETF has been granting continuation coverage without interruption when the surviving dependent shows good reason for not meeting the current 90-day deadline.
Another uncodified exception to the 90-day deadline allows the surviving dependent at least 30 days to apply after the Department sends out the standard packet of materials relating to death benefits. This exception conforms to the intent of s.
632.897 (3) (a), Stats. The death benefit packet contains the “Survivor Eligibility to Continue Health Insurance" form (ET-6203) giving notice of the right, if any, to continue group coverage, the deadline for applying and premium payment options. A form ET-4701 schedule of premium rates, the Group Health Insurance brochure (ET-4112) and “Health Insurance Application," form (ET-2301) are all also included in the packet. The 30-day grace period assures that a delay in preparing and mailing out a death benefit packet will not deprive the surviving insured dependent of the opportunity to continue coverage.
The Department automatically continues covering surviving insured dependents after the death of the employee or annuitant, at least until the previously received premium payments are exhausted. Employees typically pay two months in advance for group health insurance coverage. Annuitants may pay one month in advance through a deduction from their sick leave conversion credits or (if there are no remaining credits) from their annuity. If a monthly annuity is insufficient to support premium deductions, an annuitant makes direct payments of premiums to the insurer. Direct payments schedules vary and premiums may up paid up to several months in advance.
In an effort to avoid unintended termination of health insurance coverage, Department staff will often write and telephone surviving dependents to remind them of the need to apply for the coverage within the 90-day deadline. If the 90-day deadline passes and all previously received premiums have been exhausted, the surviving dependents' health insurance coverage is terminated.
Terminated surviving dependents often call or write Department staff to explain why they failed to timely apply and to attempt to obtain coverage. Sometimes contact is initiated by health care providers, such a pharmacies, being asked to fill prescriptions after the coverage has ended. The Department generally finds reason to restore insurance coverage. The Department staff estimate (anecdotally) that roughly 98% of surviving insured dependents wish to continue the health insurance coverage. The main reason for not wishing to continue coverage is likely to be that the surviving dependent is already covered under other health coverage, which the surviving dependent has reason to prefer. This can occur, for example, when two spouses both work and each has family health insurance benefits through their separate employers.
The proposed rule-making is intended to address both customer service and Department work-load issues. The first goal is to reduce or eliminate interruptions in coverage for surviving dependents who wish to continue health coverage. Secondly, the Department would like to reduce staff time spent soliciting applications, reminding surviving dependents of the application deadline and handling telephone calls and correspondence with health care providers and surviving dependents concerning health coverage that was involuntarily terminated due to inaction by the surviving dependent.
The Department is therefore considering different options as part of this rule-making, including automatic enrollment of surviving insured dependents, extending periods for providing necessary documents and signatures, and revising Department forms to encourage and obtain necessary responses from surviving dependents. Most of the problems observed by Department staff stem from the death of an insured annuitant, so different procedures may be codified with respect to the surviving insured dependents of annuitants compared to the survivors of deceased employees.
Statutory Authority
Under s.
40.03 (2) (ig), Stats., the DETF Secretary, with the approval of the Group Insurance Board, may promulgate rules required for the administration of the group health insurance plan. As provided by s.
227.11 (2) (a), Stats., each agency may promulgate rules interpreting the provisions of any statute enforced or administered by it, if the agency considers it necessary to effectuate the purpose of the statute.
Staff Time Required To Develop The Proposed Rule
The Department estimates that state employees will spend 200 hours to develop this rule.
Entities That May Be Affected By The Proposed Rules
The proposed rule will directly affect the surviving insured dependents of insured employees and annuitants with family health insurance coverage, when the date of the employee's or annuitant's death occurs after the effective date of the rule. \
The rule-making will also affect the administration of coverage under the group health insurance programs by Department of Employee Trust Funds staff, the third-party administrative contractor and the private Health Maintenance Organizations and similar insurers who agree to participate in the group health insurance program.
Comparison With Federal Regulations
The Group Insurance Board's group health plans are required by s.
40.51 (3),
(4) and
(5), Stats., to include provisions for continuation of coverage that, at a minimum, comply with s.
632.897, Stats., a statute based on federal requirements for so-called “COBRA continuation coverage." The requirement for group health plans to offer continuation coverage to certain individuals whose coverage might otherwise end originally comes from the federal Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). COBRA amended the federal tax code, the Employee Retirement Income Security Act (ERISA) and the Public Health Service Act to require continuation coverage. COBRA expressly included the group health plans of state and local governments. However, “governmental plans" are exempt from ERISA and the regulations of the U.S. Department of Labor regulations based on that Act. See 29 U.S.C. §1003(b)(1). The U. S. Treasury regulations on COBRA continuation coverage expressly except state and local group health plans from the regulations. See
26 CFR 26 C.F.R. §
54.4980B-2 A-4(b)(3).
However, as the IRS expressly noted in
26 CFR 26 C.F.R. §
54.4980B-2 A-4(d), group health plans maintained by state or local governments are generally subject to parallel continuation coverage requirements that COBRA added to the Public Health Services Act. These COBRA continuation provisions apply to states that receive funds under the Public Health Service Act, as well as to their political subdivisions and to agencies or instrumentalities of such states and their political subdivisions. See the Notice published by the U.S. Department of Health and Human Services, 52 FR 604 (January 7, 1987).
The U.S. Department of Health and Human Services has not issued regulations concerning COBRA continuation coverage for the group health plans of state and local governments. If regulations are issued on continuation coverage requirements for state and local governments, then the H&HS regulations must conform to the similar regulations issued by the Treasury and the Department of Labor. See the final rules notice published by the Department of Labor, 69 FR 30084 (May 26, 2004), footnote 4, citing House Conference Report No. 99-453 at 563 (1985). The Department of Labor COBRA continuation regulations begin at
29 CFR §2590.606-
1 and the related Treasury regulations begin at
26 CFR § 54.4980B-1.
Meanwhile, the COBRA continuation provisions of the Public Health Services Act are codified beginning at 42 U.S.C. §300bb-1. Under 42 USC § 300bb-3(1), the death of a covered employee is a “qualifying event" giving rise to continuation rights for the surviving spouse and dependent children insured under the employee's coverage. The term “covered employee," as defined by 42 USC § 300bb-8 (2), includes retired employees. Within 30 days, the employer is required to notify the plan administrator of the employee's death and within 14 days after notification, the plan administrator must send notice of COBRA continuation rights to the affected surviving spouses or dependent children who were covered under the plan. See 42 U.S.C.A. § 300bb-6(2) and (4)(A).
During the “election period" the surviving spouse or dependent child who would otherwise lose coverage under the plan because of the employee's death, is entitled to elect continuation coverage. For this purpose, the “election period" is defined by 42 USC §300bb-5 to be a period of 60 days, beginning on the later of (a) the date of the notice provided to the surviving spouse (or dependent child), or (b) the date coverage would end as a result of the employee's death.
Health and Family Services
Subject
Foster parents.
Policy Analysis
The Department of Health and Family Services proposes to amend ch.
HFS 56, Foster Home Care for Children, rules relating to creating an exception to the maximum placement standards for sibling placements, providing a foster parent handbook to foster homes and treatment foster homes where children are placed under s.
48.833, Stats., through the child welfare system, requirements for fingerprinting prospective foster and adoptive parents and checking child abuse and neglect registries for prospective foster and adoptive parents and adults in their homes, and revising requirements regarding the use of child safety seats.
Section
48.67, Stats., requires the Department to promulgate rules establishing minimum requirements for the issuance of licenses to and the operation of foster homes and treatment foster homes among other entities. The rules must be designed to promote the health, safety and welfare of the children placed in the care of the foster home or treatment foster home. The Department intends to amend the rule to require agencies to provide specified foster parents and treatment foster parents with a handbook that contains specific identified information. The agencies will have the option of using a handbook developed for the Department or their own handbook that contains all the required information. In addition, current rules provide directives on the use of child safety seats for foster children.
2005 Wisconsin Act 106 recently changed child safety seat requirements for all children in Wisconsin. The Department intends to amend the rules to conform to the new requirements.
Section
48.62 (4), Stats., directs the Department to promulgate rules that address supplemental foster care payments for special needs, exceptional circumstances, care in a treatment foster home and initial clothing allowances. Research and experience in the area of child welfare demonstrates that generally children who are removed from their homes and placed in out of home care, will adjust more successfully if they are placed with their siblings in the same out of home placement. Current rules prevent the placement in a foster home of more than four children or more than six children in order to keep siblings together. The Department intends to establish rules that would create an exception, with specific standards, that would allow more than six children to be placed in a foster home if the children are siblings.
In addition, under the federal Adam Walsh Child Protection and Safety Act, P.L.
109-248, the state is required to have procedures in place to assure that all prospective foster and adoptive parents have their fingerprints submitted to the Federal Bureau of Investigations criminal information database. In addition, all prospective foster and adoptive parents and adults in their households who have resided outside of Wisconsin in the five years prior to their application for licensure, must be checked against the other state(s) child abuse and neglect registry if one exists, and finally all prospective foster and adoptive parents and adults in their household who have resided in Wisconsin must be checked against a Wisconsin child abuse and neglect registry if one exists. The Department is seeking legislation to mandate compliance with these new requirements and intends to establish rules that provide guidance and procedures for complying with these requirements.
Statutory Authority
Staff Time Required To Develop The Proposed Rule
It is anticipated that approximately 80 hours of staff time will be required for the development, drafting, review and editing of the proposed rule. The Department will work with the Out-of-Home Care / Adoption Committee to develop the rule. Committee participants include representatives from the Bureau of Milwaukee Child Welfare, Bureau of Regulation and Licensing, county human services and social services agencies, and private child placing agencies.
Entities That May Be Affected By The Proposed Rules
The amendments to the rule will have a direct impact on the Department, including the Bureau of Milwaukee Child Welfare (BMCW), county human and social services agencies, licensed child placing agencies, and prospective and current foster parents and treatment foster parents, including those individuals who are seeking licensure as a foster parent for the purposes of adopting a child.
Comparison With Federal Regulations
There appear to be no existing or proposed federal regulations that address the activities to be regulated by the proposed rule.
Health and Family Services
Subject
The Department of Health and Family Services is repealing ch.
HFS 119, rules relating to operation of the Health Insurance Risk Sharing Plan (HIRSP).
Policy Analysis
Pursuant to ch.
149, Stats., the department operates the Health Insurance Risk-Sharing Plan (HIRSP) which provides health insurance coverage for Wisconsin residents who: (a) have been refused coverage, or coverage at an affordable price, in the private health insurance market because of their health condition; (b) are covered under Medicare because they are disabled or have tested positive for human immunodeficiency virus; or (c) do not have health insurance but, under certain circumstances, were covered under certain types of creditable coverage in the past.
Effective July 1, 2006,
2005 Act 74 transfers the department's authority to operate HIRSP to the Health Insurance Risk-Sharing Plan Authority that was created by Act 74. This transfer of authority means that effective July 1, 2006, the department is not statutorily authorized to operate HIRSP or to promulgate or implement ch.
HFS 119 rules relating to the operation of HIRSP. Because the department will no longer be statutorily authorized to promulgate or implement ch. HFS 119, the department is hereby giving notice that ch. HFS 119 will be repealed by the department.
Statutory Authority For Proposed Rule
Staff Time Required To Develop The Proposed Rule
10 hours.
Entities That May Be Affected By The Proposed Rules
N/A
Comparison With Federal Regulations
N/A
