Layoff Processing and Sick Leave Conversion

Overview:

This document will outline the process for employees being laid off that have State Group Health coverage. It will also outline using 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

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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 KB 16619 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.

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. 

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.

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 3 months at the employer share rate.

5. Employee elects to not continue health insurance coverage past the additional 3 months of employer share.

6. Employee elects to continue health coverage beyond the additional 3 months of employer share 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 3 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 3 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 3 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.

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

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

Note: A COBRA Notice will be sent to the employee and 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: If sick leave hours need to be restored, request UWSS Service Delivery Benefits Team to update HRS.

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 request UWSS Service Delivery Benefits Team to 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. Around the 20th of the month, or 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.

Additional Resources

Related KBs:

Related Links: