Chapter ETF 50

Register July 2012 No. 679

Chapter ETF 50

DISABILITY BENEFITS

Subchapter I — Income Continuation Insurance

ETF 50.10   Public employer income continuation insurance.

Subchapter II — Disability Annuity

ETF 50.30   Eligibility for a disability annuity.

ETF 50.31   Cancellation of a disability annuity application.

ETF 50.315   Termination for fraud, misrepresentation, error, or mistake.

ETF 50.32   Definitions.

Subchapter III — Long-Term Disability Insurance

ETF 50.40   Purpose.

ETF 50.42   Definitions.

ETF 50.44   Scope and application.

ETF 50.52   LTDI benefits.

ETF 50.54   Administration.

ETF 50.56   Termination or suspension of benefits.

ETF 50.58   Special provisions applicable to protective occupation participants.

ETF 50.60   Plan funding.

ETF 50.62   Proration of adjustment percentages and monthly benefits.

subch. I of ch. ETF 50 Subchapter I — Income Continuation Insurance

ETF 50.10 ETF 50.10 Public employer income continuation insurance.

ETF 50.10(1) (1) An employee of an employer, other than the state, shall be eligible for income continuation insurance under s. 40.61 (3), Stats., if the requirements of ss. 40.02 (46) and 40.22, Stats., are satisfied.

ETF 50.10(3) (3) The employer shall pay an employer contribution toward the income continuation insurance premium which is not less than the corresponding gross premium for the 180-day waiting period plan.

ETF 50.10 History History: Cr. Register, December, 1987, No. 384, eff. 1-1-88; CR. 16-034: am. (1) (intro.), r. (1) (a), (b), (c), (2) Register April 2017 No. 736, eff. 5-1-17.

subch. II of ch. ETF 50 Subchapter II — Disability Annuity

ETF 50.30 ETF 50.30 Eligibility for a disability annuity.

ETF 50.30(1) (1) A person may be eligible for a disability annuity under s. 40.63, Stats., provided the person is not receiving benefits under subch. III.

ETF 50.30(1g) (1g) For purposes of eligibility under s. 40.63 (1), Stats., an election of coverage to receive benefits under subch. III previously filed with the department will not cause a person to be ineligible for a disability annuity if a claim is filed on or after January 1, 2018 and the person is not receiving benefits under subch. III.

ETF 50.30(1m) (1m) For purposes of eligibility under s. 40.63 (2), Stats., employment which is substantial gainful activity has intervened if, during any 12 consecutive calendar months beginning with the first of the month following the date service for the participating employer terminated, the participant received aggregate earnings, wages, salary and other earned income exceeding the annual dollar amount determined under s. 40.63 (11), Stats., that is in effect at the end of the 12 consecutive calendar month period.

ETF 50.30(2) (2) If the department determines that an applicant does not meet the requirements of s. 40.63 (1) (a), Stats., or this subchapter, the department shall deny the application. The applicant may file a written request for an appeal to the appropriate board under ch. ETF 11 no later than 90 days after the date the department’s determination was mailed to the applicant.

ETF 50.30(3) (3) In measuring creditable service earned in a calendar year for purposes of s. 40.63 (1) (a), Stats., and in totaling accumulated creditable service for purposes of s. 40.63 (4), Stats., the creditable service shall be determined based upon the service that would have been credited if the participant’s account had not been divided by a qualified domestic relations order to which s. 40.08 (1m) (b) 1., Stats., applied.

ETF 50.30(3m) (3m) For purposes of s. 40.63 (1) (a), Stats., only, if a participant was previously receiving a long-term disability insurance benefit under subch. III, which was terminated for reasons other than fraud, misrepresentation, error, mistake or failure to provide required information, the participant is deemed to have received full creditable service for any month for which the previous long-term disability insurance benefit was paid.

ETF 50.30(4) (4) For purposes of benefits administered under ch. 40, Stats., the participant shall be treated as terminated for all ch. 40, Stats., purposes effective on the date before the s. 40.63, Stats., annuity is effective or on the termination date reported to the department by the employer, whichever is earlier. The benefits include, but are not limited to, health insurance coverage, sick leave credit usage, life insurance coverage, income continuation insurance coverage, Wisconsin retirement system coverage and death benefits under s. 40.73 (1) (am) and (c), Stats., and deferred compensation contributions and benefits under s. 40.80, Stats. This rule does not preclude a participating employer from placing the participant on an administrative leave of absence for purposes of benefits not administered under ch. 40, Stats.

ETF 50.30 History History: Cr. Register, September, 1983, No. 333, eff. 10-1-83; emerg. renum. to be (2) and am., cr. (1), eff. 10-15-92; renum. to be (2) and am., cr. (1) and (1m), Register, May, 1993, No. 449, eff. 6-1-93; cr. (3), Register, July, 1999, No. 523, eff. 8-1-99; am. (1m), Register, September, 2000, No. 537, eff. 10-1-00; CR 08-026: cr. (4) Register September 2009 No. 645, eff. 10-1-09; CR 17-031: renum. (1) (intro.) to (1) and am., r. (1) (a) to (c), cr. (1g), (3m) Register December 2017 No. 744, eff. 1-1-18; CR 19-097: am. (1g) Register May 2021 No. 785, eff. 6-1-21.

ETF 50.31 ETF 50.31 Cancellation of a disability annuity application. An application for a disability annuity under s. 40.63, Stats., shall be canceled upon request of the applicant if the applicant’s written request for cancellation is received by the department no later than the close of the department’s regular office hours on the day before the participant’s account in the employee accumulation reserve is debited for funding the benefit as provided by s. ETF 10.633 (1) (b). If the day before the debiting date falls on a Saturday, Sunday or holiday under s. 230.35 (4) (a), Stats., the request to cancel shall be considered timely only if received in the department by the close of regular office hours on the last working day preceding the Saturday, Sunday or holiday. Repayment in full of any sum paid under the application for which cancellation is sought shall be required. The employer may not make this payment on behalf of the recipient of the benefit.

ETF 50.31 History History: Cr. Register, September, 1983, No. 333, eff. 10-1-83; am. Register, January, 1996, No. 481, eff. 2-1-96.

ETF 50.315 ETF 50.315 Termination for fraud, misrepresentation, error, or mistake.

ETF 50.315(1) (1) Payment of disability annuity benefits under s. 40.63, Stats., may be terminated immediately and overpayment recovered upon a department determination of either of the following:

ETF 50.315(1)(a) (a) Disability annuity benefits were granted as the result of fraud or misrepresentation in the application or in required evidence of eligibility.

ETF 50.315(1)(b) (b) Disability annuity benefits were granted due to an error or mistake by the department or due to an error or mistake in the information supplied by the employer used for determining eligibility, effective date, or amount of disability annuity benefits.

ETF 50.315(2) (2) The amount of monthly disability annuity benefits may be altered upon a determination that the amount of disability annuity benefits was computed in error.

ETF 50.315(3) (3) Disability annuity benefits may be terminated effective upon a determination by the department that the recipient has made misrepresentations or submitted false or fraudulent information regarding continued disability, earnings, wages, salary, or other earned income.

ETF 50.315(4) (4) If the department alters the amount of monthly disability annuity benefits under sub. (2) or terminates payment of disability annuity benefits under sub. (3), the department shall send notice of the action to the recipient. The notice shall be in the form of a written determination stating the reasons for the alternation or termination. The recipient may file a timely appeal of the alteration or termination with the appropriate board as provided in ch. ETF 11. If no timely appeal is filed, the alteration or termination of disability annuity benefits is final.

ETF 50.315 History History: CR 23-023: cr. Register May 2024 No. 821, eff. 6-1-24.

ETF 50.32 ETF 50.32 Definitions. In this subchapter and s. 40.63, Stats.:

ETF 50.32(1) (1) “Last day paid” means the most recent date for which the employee was paid earnings, including accumulated sick leave, other paid leave, vacation, compensatory time or worker’s compensation temporary disability benefits which may result in the last day paid being subsequent to the date the employee last rendered services.

ETF 50.32(2) (2) “Last rendered services” means most recently performed actual work for which entitled to earnings, excluding any subsequent period on sick leave, other paid leave, vacation, compensatory time and worker’s compensation temporary disability benefits.

ETF 50.32(3) (3) “Substantial gainful activity” means any work of a nature generally performed for remuneration or profit, involving the performance of significant physical or mental duties, or a combination of both, for which annual compensation exceeds an amount equal to $6,573 for determinations made in the calendar year commencing on January 1, 1992. For determinations made in subsequent calendar years, this dollar amount shall be increased by the salary index for each subsequent year, ignoring fractions of the dollar. Work is considered substantial even if performed part-time and even if it is less demanding or less responsible than the individual’s previous employment. Work is considered gainful even if it pays less than the individual’s previous employment.

ETF 50.32(4) (4) The date on which service for the participating employer terminated, for purposes of s. 40.63 (2), Stats., is the date on which the person last rendered services as defined under sub. (2).

ETF 50.32 History History: Emerg. cr. eff. 10-15-92; cr. Register, May, 1993, No. 449, eff. 6-1-93; cr. (4), Register, September, 2000, No. 537, eff. 10-1-00.

subch. III of ch. ETF 50 Subchapter III — Long-Term Disability Insurance

ETF 50.40 ETF 50.40 Purpose. The purpose of this subchapter is to administer the long-term disability insurance program for participating employees who are receiving benefits under this subchapter. For a claim to be approved under this subchapter, it must have been filed with the department before January 1, 2018.

ETF 50.40 History History: Emerg. cr. eff. 10-15-92; cr. Register, May, 1993, No. 449, eff. 6-1-93; CR 17-031: renum. (1) to ETF 50.40 and am., r. (2) Register December 2017 No. 744, eff. 1-1-18; CR 19-097: am. Register May 2021 No. 785, eff. 6-1-21.

ETF 50.42 ETF 50.42 Definitions. Words, phrases and terms used in this subchapter have the same meaning as set forth in s. 40.02, Stats., and s. ETF 10.01, except as defined in this subchapter or where the context clearly indicates a different meaning. In this subchapter:

ETF 50.42(1) (1) “Claimant” means a person who made a claim for long-term disability benefits under this subchapter before January 1, 2018.

ETF 50.42(2) (2) “Earnings limit” means an amount equal to $6,573 for determinations made in the calendar year commencing on January 1, 1992, and for determinations made in subsequent calendar years, this amount shall be increased by the salary index for each subsequent year, ignoring fractions of the dollar.

ETF 50.42(3) (3) “Final average salary” or “FAS” means:

ETF 50.42(3)(a) (a) Except as provided in par. (b), a monthly rate of earnings, ignoring any fractions of a dollar, obtained by dividing 36 into the participant’s total earnings received and for which contributions are made under s. 40.05 (1) and (2), Stats., 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.

ETF 50.42(3)(b) (b) If the claimant does not meet the minimum service requirements of s. ETF 50.50 (2) (b), as it existed prior to June 1, 2021, and the claimant’s medically determinable impairment is a result of employment as a participating employee for an employer, then the FAS is calculated as follows:

ETF 50.42 Note Note: See https://docs.legis.wisconsin.gov/code/register/2021/785b/remove/etf50.pdf for the text of 50.50 (2) (b) prior to June 1, 2021.

ETF 50.42(3)(b)1. 1. Divide the total earnings received by the employee in the portion of the annual earnings period in which the last day paid occurs and the 2 immediately preceding annual earnings periods by,

ETF 50.42(3)(b)2. 2. The number of months, with all fractions of a month rounded to the next higher whole number, between the last day paid and the commencement date of the earliest annual earnings period in subd. 1. or, if later, the date the claimant commenced participating employment.

ETF 50.42(5) (5) “Long-term disability insurance” or “LTDI” means long-term disability insurance as provided under this subchapter.

ETF 50.42(6) (6) “Medically determinable impairment” means an impairment which has medically demonstrable anatomical, physiological or psychological abnormalities. The described abnormalities are medically determinable if they manifest themselves as signs or laboratory findings apart from symptoms which are not medically determinable.

ETF 50.42(7) (7) “Recipient” means a person receiving LTDI benefits under this subchapter.

ETF 50.42(8) (8) “Substantial gainful activity” has the same meaning as stated in s. ETF 50.32 (3).

ETF 50.42(9) (9) “Totally and permanently disabled” means the inability to engage in any substantial gainful activity by reason of a medically determinable impairment, whether physical or mental, which can reasonably be expected to result in death or to be permanent, or of indefinite and long-continued duration.

ETF 50.42 History History: Emerg. cr. eff. 10-15-92; cr. Register, May, 1993, No. 449, eff. 6-1-93; CR 19-097: am. (1), r. (3m), (4) Register May 2021 No. 785, eff. 6-1-21; correction in (3) (b) (intro.) made under s. 35.17, Stats., Register May 2021 No. 785.

ETF 50.44 ETF 50.44 Scope and application. This subchapter applies to any person who is receiving benefits under this subchapter or has filed a claim for benefits with the department before January 1, 2018.

ETF 50.44 History History: Emerg. cr. eff. 10-15-92; cr. Register, May, 1993, No. 449, eff. 6-1-93; CR 17-031: am. (1), (2) (a) Register December 2017 No. 744, eff. 1-1-18; CR 19-097: renum. (1) to ETF 50.44 and am., r. (2) Register May 2021 No. 785, eff. 6-1-21.

ETF 50.52 ETF 50.52 LTDI benefits.

ETF 50.52(1) (1) Basic benefit.

ETF 50.52(1)(a) (a) Benefit amount. The basic LTDI benefit payable to recipients shall be a monthly payment of 40% of the recipient’s final average salary or 50% of FAS for a recipient not personally covered under OASDHI. The basic benefit amount, once determined, shall subsequently be adjusted at the same time and by the same percentages as applicable to post-retirement annuity adjustments under s. 40.27, Stats.

ETF 50.52(1)(b) (b) Reductions and offsets.

ETF 50.52(1)(b)1. 1. The department shall reduce the amount of a recipient’s monthly LTDI benefits under par. (a) by the amounts in subds. 2. and 3. The amount by which any lump sum benefit or separation benefit under subd. 2. exceeds the basic monthly LTDI benefit otherwise payable shall be carried over to reduce basic LTDI benefits payable in future months until the amount of the lump sum or separation benefit has been completely offset.

ETF 50.52(1)(b)2. 2. LTDI benefits shall be offset by an amount equal to the portion of any retirement annuity or lump sum benefit or separation benefit under s. 40.23, 40.24 or 40.25, Stats., on which the recipient is subject to federal income tax. This subdivision applies to any retirement annuity or lump sum benefit or separation benefit which is paid to the recipient as a result of the recipient’s application for the annuity or benefit, excluding any benefit funded by employee additional contributions. This subdivision does not apply to an annuity or lump sum benefit for which the recipient is eligible solely as a beneficiary, alternate payee or joint survivor of another participant.

ETF 50.52(1)(b)3. 3. LTDI benefits shall be offset by the amount of any normal form retirement annuity or lump sum retirement benefit under s. 40.23 or 40.25, Stats., for which the recipient is eligible, including a separation benefit that the recipient is eligible to receive under s. 40.23 (2m) (er) or 40.23 (3) (b), Stats., excluding the portion of any annuity or lump sum benefit or separation benefit on which the recipient would not be subject to federal income tax, or a benefit funded by employee additional contributions. Except for a protective occupation recipient, this offset shall be computed as of the recipient’s normal retirement age. This subdivision applies only after a recipient’s normal retirement date as defined by s. 40.02 (42), Stats. For a protective occupation recipient, the offset shall be computed as of the recipient’s 62nd birthday. This subdivision does not apply to an annuity for which the recipient is eligible solely as a beneficiary, alternate payee or joint survivor of another participant.

ETF 50.52(1)(c) (c) Proration. Initial monthly LTDI benefits beginning on other than the first day of a month and final LTDI benefits ending on other than the last day of a month are prorated based on effective date and termination date as provided in s. ETF 50.62.

ETF 50.52(2) (2) LTDI retirement supplemental benefit.