Legal Updates


2017-2019 BUDGET SERIES: CHANGES AFFECTING HEALTH INSURANCE FOR SCHOOL DISTRICTS

October 3, 2017

The 2017-2019 Biennial Budget (Budget) made two significant changes to the law that may affect employee health insurance plans offered by Wisconsin school districts. First, for school districts that offer employee health insurance through a group health plan sponsored by the Wisconsin Department of Employee Trust Funds (ETF), the Budget eliminates coverage for employees’ domestic partners and the dependents of domestic partners. Second, the Budget requires every Wisconsin public school district to submit an annual report to the Wisconsin Department of Administration (DOA) describing the details of the school district’s group health plan design and cost.

Domestic Partnership Changes to ETF Health Insurance Plans (Wis. Stat. § 40.01, et seq.)

In addition to administering the Wisconsin Retirement System (WRS) benefits for state and local government employees, the ETF also offers group health insurance coverage to state employees and local government employees whose employer chooses to participate in an ETF-sponsored group health insurance plan.

The Budget changed the coverage rules for employees’ domestic partners and the dependents of domestic partners under ETF-sponsored group health insurance plans. Specifically, most domestic partners of covered employees and the dependents of domestic partners will now be excluded by statute from coverage under such health insurance plans.

The domestic partners of local government employees, who submitted an affidavit of domestic partnership to the ETF before September 23, 2017, will remain eligible for group health insurance plan coverage under an ETF-sponsored group health insurance plan until January 1, 2018. The same is true for the dependents of such domestic partners. However, any domestic partners of local government employees submitting an affidavit of domestic partnership after September 22, 2017, will not be eligible for coverage under such health insurance plans, and all domestic partnership coverage in ETF-sponsored group health insurance plans will end as of January 1, 2018. Those domestic partners and dependents, who are no longer eligible for coverage, may be eligible for a temporary continuation of health insurance coverage after January 1, 2018, through COBRA.

School districts that offer group health insurance through a plan that is not sponsored by ETF, regardless of whether the health insurance plan is fully funded or self-insured, may, if they choose to do so, continue to offer coverage to local government employees’ domestic partners and the dependents of domestic partners, provided that the plan documents continue to provide for such coverage.

It is important to remember that for purposes of all health insurance plans, including an ETF-sponsored group health insurance plan, if spousal coverage is offered, the health insurance must provide coverage for all legally married spouses, regardless of the couple’s sexual orientation.

Annual School District Health Insurance Report (Wis. Stat. § 120.12(24)(b))

Throughout much of the budget debate, the Legislature considered a proposal that would have required school districts that do not offer an ETF-sponsored group health insurance plan to require local government employees to contribute 12 percent of the premiums for such coverage or forego the per pupil state aid increase. This proposal was intended to create a strong incentive for school districts that offer health insurance through other plans to adopt a premium share practice that is consistent with ETF-sponsored plans.

The premium share proposal was not enacted as part of the final budget; however, the Legislature did create a new health insurance report mandate. Section 120.12(24) of the Wisconsin Statutes requires the school board of a common or union high school district to:

Annually submit to the department of administration a report containing all of the following information regarding health care for school district employees:

1. Health care plan design.

2. Premium contributions.

3. Self-insurance contributions.

4. Deductibles, copayments, coinsurance, and other methods by which employees contribute to health care costs.

The DOA intends to provide further compliance information to school districts in the near future. However, no such regulatory or other guidance regarding this new requirement has been issued as of the date of this article.

The new requirement means that this data will be available in one place for every Wisconsin school district every year. School district employees and others will be able to easily compare benefits offered by each district when considering job opportunities.

We will continue to provide updates on this topic as the reporting process and other DOA regulations are released.

For questions regarding this article, please contact the author, Attorney Julie A. Lewis (email: jlewis@strangpatteson.com; telephone: 844.626.0909), or your Strang, Patteson, Renning, Lewis, & Lacy, s.c., attorney.

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