Topics Map > Human Resource System (HRS) > Benefits Administration

Layoff Processing and Sick Leave Conversion

Overview:

This document outlines the process for employees being laid off that have State Group Health insurance coverage. It also outlines how to use sick leave credits to pay for State Group Health insurance premiums if the employee elects to continue their health insurance coverage past the additional one month of coverage.

Process Considerations:

  • Health insurance coverage will end at the end of the month following layoff date, provided the premium is paid. 
  • The employee is eligible for an additional three months of employer contribution towards their health insurance premiums if they were not previously on an unpaid LOA immediately prior to layoff.
    1. Payment may be paid by payroll deduction, personal check/cash, credit card, or converted sick leave credits.
  • If the employee was on an unpaid LOA immediately prior to being laid off, the employee may receive up to an additional 3 months of employer contribution based on if the employee received employer contribution premiums while on unpaid LOA. 
    1. Payment may be paid by payroll deduction, personal check/cash, credit card, or converted sick leave credits.
    2. If employee already received the additional 3 months of employer contribution on unpaid LOA, then they are not eligible for employer contributions upon layoff immediately following unpaid LOA.
  • An employee can convert their sick leave balance to credits. Sick leave credits can then be used to pay for health insurance premiums until the earliest of the following events:
    1. Credits are exhausted.
    2. First of the month following the begin date of other employment offering comparable health insurance coverage.
    3. Five years have elapsed from the date of layoff.
      • There is no time restriction if you have 20 years of WRS creditable service.
    4. Death of employee.
      • The insured surviving spouse and dependents can continue to use the remaining sick leave credits to pay for health insurance through Employee Trust Funds.
  • To determine if the employee is eligible for Sick Leave Credit Conversion, refer to Ch.12 of the ETF SGH Manual section 1205 Permanent Layoff.
  • To determine if the employee is eligible for Supplemental Health Insurance Conversion Credit (SHICC), refer to CH.758 section 758.070 of the Wisconsin Human Resource Handbook.
    1. Employee must be in a position eligible for SHICC.
    2. Employee must have 15 or more FULL years of adjusted continuous service (seniority).
    3. Employee must leave WRS retirement account funds in the retirement system.
      • Employees who take a separation benefit from WRS are not eligible for SHICC.
  • The Sick Leave Credit Estimator spreadsheet only needs to be completed if the employee is going to continue their health insurance post layoff and past the additional month and using sick leave credits to pay for premiums.
    1. The spreadsheet may need manual updates if the employee was on an unpaid LOA immediately prior to layoff.
  • Accumulated Sick Leave Conversion Credits (ASLCC) hours/credits are always used first to pay the health insurance premiums. Once ASLCC is exhausted, then Supplemental Health Insurance Conversion Credit (SHICC) hours/credits are used.
    1. It is possible when an employee is rehired to have used most, if not all, of their ASLCC but not SHICC. However, only ASLCC hours/credits will be restored in HRS if applicable.

Campus Responsibilities

1. Identify employees being laid off and make sure Job Data is updated appropriately using the Action Reason code of Termination / Layoff or Retirement in Lieu of Layoff. See Action/Action Reason Codes Used in HRS for all Termination Layoff codes.

Note: If the wrong reason code is entered, the health insurance will not be extended the additional month. 

2. Provide counseling and collect layoff forms from the employee per the layoff checklist.

  • Layoff Checklist
  • Health Insurance Premium Payment at Layoff form UWS40

Note: Notify the employee if they are continuing coverage past the additional month that they will receive a COBRA Notice from UW Shared Services and to ignore the section only on health insurance. The initial COBRA notice will state, “If you extended your State Group Health Insurance through additional payroll deductions or converting your sick leave, you will receive a new COBRA letter when those have been exhausted.

3. Employees can cancel their SGH coverage at the end of the month in which they are laid off permitted they have other health coverage. 

  • Collect a SGH application with proof of other coverage and enter into HRS using enrollment codes of Cancel Coverage / Eligible for Other Coverage.
  • If unable to process event, submit a ticket to the AGs to have UWSS Benefits Team process.

Note: If the employee is retiring or eligible for SLC Certification, the employee must have health coverage the last month of employment in order to be eligible for SLC Certification or continuation of coverage as an annuitant.

4. Employee elects to not continue health insurance coverage past the end of the month following layoff.

  • Submit the SLC Certification to ETF, if eligible.
  • Submit a ticket to the AGs to have UWSS Benefits Team create a COBRA for State Group Health.

Note: If employee is retiring and enrolling in annuitant health coverage, it is usually in the employee’s best interest to continue their health coverage the additional months at the employer share rate.

5. Employee elects to not continue health insurance coverage past the additional months of employer share.

  • Employee checks “No” under Section B: Election to Use Converted Sick Leave Credits of form UWS40.
    1. A State Group Health application is not needed as the UWS40 form acts as the application to cancel coverage.
  • Submit a ticket to the AGs to have the UWSS Benefits Team process the additional months of health coverage.
    1. Use the following when submitting a ticket:
      • Name
      • EMPLID
      • Classification
      • Date of Layoff
      • Health Insurance Intention: (Continue only additional months of ER share)
      • Additional ER share premiums paid via: (SLC, Payroll, Benefits Billing)
    2. Attach the following in the ticket:
      • UWS40
      • UWS48 spreadsheet
  • Submit the SLC Certification to ETF, if eligible.

6. Employee elects to continue health coverage beyond the additional months of employer share using Sick Leave Credits.

  • Submit a ticket to the AGs to have the UWSS Benefits Team process the additional months of health coverage and beyond.
    1. Use the following when submitting a ticket:
      • Name
      • EMPLID
      • Classification
      • Date of Layoff
      • Health Insurance Intention: (Continue past additional months of ER share)
      • Additional ER share premiums paid via: (SLC, Payroll, Benefits Billing)
    2. Attach the following in the ticket
      • UWS40
      • UWS48 spreadsheet
  • A State Group Health application will be needed if the employee wants to cancel coverage past the additional ER share months due to paying after-tax premiums in Benefits Billing using sick leave credits.

7. If the laid off employee is rehired into a benefit eligible position with the UW or another State Agency, please let UWSS know immediately.


UWSS Benefits Responsibilities

1. Wait until Job Data and insurances are cancelled.

2. Reinstate health insurance in HRS using correction and reinstate myETF.

3. Verify accuracy of the Sick Leave Credit Estimator spreadsheet and send a request to the UWSS Service Delivery Benefits Team to verify sick leave balance and then reduce sick leave balance in HRS.

4. Update the ticket with the correct treatment for employee based on Ch.12.06 of the ETF SGH Manual – Permanent Layoff SL Conversion Reference chart.

5. For the additional months of employer share, and the employee is paying by either cash/check, credit card, or sick leave credit, enroll the employee in Benefits Billing.

Note: Benefits Billing is used to pay for health insurance premiums when using sick leave credits. Credits are calculated into dollars and entered into Benefits Billing as an open credit balance. The Benefits Billing enrollment will show a reason of “Sick Leave”.

6. For the additional months of employer share, and the employee is paying by additional deductions taken from final payroll, ensure premiums were taken completely. Then enroll the employee in Benefits Billing for conversion of sick leave credit past the additional months, if applicable.

7. Mail the Certification of Continued Eligibility notification to the employee on a monthly basis.

Note: During this process, verify health insurance was not accidentally cancelled in HRS or myETF and reinstate if necessary. This process is completed with the same timeline as the normal monthly Benefits Billing processing.

8. When Sick Leave Credit is exhausted, provide the Sick Leave Depletion Notification letter to the employee.

Note: This process is completed with the same timeline as the normal monthly Benefits Billing process.

9. When health insurance is cancelled, update HRS and myETF.

Note: A COBRA Notice will be sent to the employee. The employee is eligible for an additional 36 month through COBRA continuation, unless the employee voluntarily cancels coverage.

10. When health insurance is cancelled, review sick leave balance and follow the guidelines from Ch.12.06 of the ETF SGH Manual – Permanent Layoff SL Conversion Reference chart.

Note: If a Sick Leave Certification needs to be submitted to ETF, contact the campus with the necessary information to complete the Sick Leave Certification entry.

Note: Update HRS if sick leave hours need to be restored.

11. If the employee is rehired into a benefit eligible position with the UW or another State Agency, review the sick leave credit balance and update the sick leave balance in HRS as appropriate.

Note: Only ASLCC credits are restored. If the employee has exhausted their ASLCC credits, they will not have a sick leave balance upon rehire. This is tracked on the SLC Estimator spreadsheet and is available upon campus request.
Example: Employee’s ASLCC balance = 1,000, SHICC balance = 750. Employee uses 900 hours. The employee will have 100 hours of sick leave will be restored.
Example: Employee’s ASLCC balance = 1,000, SHICC balance = 750. Employee uses 1,200 hours. The employee will not have restored sick leave due to exhausting ASLCC balance.

12. After Benefits Billing processes for the month, work the active SLC tracking worksheet and tickets for layoff.

13. During ABE, provide a list of laid off employees to UWSHR. UWSHR will send letters with ABE information to those employees. Any ABE SGH changes will be sent to UWSS for processing.

Note: Changes for ABE should only be health insurance, which can include HDHP/HSA.

Completing the SLC Estimator Spreadsheet

1. Navigate to UWSS Benefits Landing page. https://uwservice.wisconsin.edu/administration/benefits/

2. Under the Sick Leave Certification tile, click on the Layoff SLC Estimator link in which year the employee is being laid off to open the spreadsheet.

3. All fields highlighted in yellow will need to be updated.

Note: In column L, cells 10-13, this is where you adjust the payment method for which the employee elects on form UWS40. Cell L10 will most likely always be Payroll due to the paid in advance month when the health insurance is extended.

4. On the Accounting-UWSC tab, if you know the employee’s ETF Member ID, enter in the ETF Member ID in cell B8.

Note: Please do not update anything else on this tab.

Note: If the employee was on an unpaid LOA immediately prior to being laid off and already received employer contribution towards their health insurance premiums prior to layoff, the spreadsheet will not accurately display the correct premiums. Premiums will need to be manually adjusted to appropriately show the correct amount. UWSS will verify the premium amount once layoff ticket has been received. 

Additional Resources

Related KBs:

Related Links:

Get Help

  • Click HERE to contact UW Shared Services or HERE for the UWSS IT HelpDesk if you have any issues with these instructions.




Keywords:layoff, sick leave credits, laid off   Doc ID:105385
Owner:Christina S.Group:UW–Shared Services
Created:2020-08-28 08:32 CSTUpdated:2020-11-17 14:54 CST
Sites:UW-La Crosse, UW–Shared Services
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