Employee Matters

This column is prepared by staff of the Employee Compensation and Benefits Services office. E-mail the office at employee@bussvc.wisc.edu, or call 263-7556 or 262-5650. For information visit http://www.bussvc.wisc.edu/ecbs/ecbs.html.

Disability Benefits

The previous article was an overview of the various disability benefits offered to UW employees. This article focuses on how the benefits are integrated and how part-time work impacts the benefits.

Benefits that integrate with Income Continuation Insurance

The Incoming Continuation Insurance (ICI) program has a “nonduplication provision.” This means that the benefits are reduced by other income replacement from state, federal or employer-sponsored sources.

ICI payments will be reduced by the largest payment you could receive from anther source. Other sources include Social Security (regular or disability), worker’s compensation, Wisconsin Retirement System (retirement, disability retirement, long-term disability insurance) and unemployment compensation.

Integration of benefits if you receive ICI and worker’s compensation for the same time period

Worker’s compensation benefits are primary and would be supplemented by ICI. The total of the two benefits cannot exceed 75 percent of your salary. For example, your gross salary is $600 per week. The maximum combined benefit is 75 percent of $600, or $450. Worker’s compensation would pay two-thirds of $600, or $400; therefore, ICI would pay $50.

Integration of benefits if you receive ICI, worker’s compensation and Social Security for the same time period

Worker’s compensation benefits are offset by Social Security payments. If the total paid by worker’s compensation and Social Security is less than 75 percent of your gross salary, ICI would pay the difference up to 75 percent.

Approval of other benefits

If you receive a retroactive benefit from another source (i.e., worker’s compensation) and it covers the same time period for which you’ve already received ICI benefits, you are required to pay back any over-paid ICI benefits due to the nonduplication provision. If you apply for and receive benefits in addition to ICI, it is wise not to spend them until the ICI is repaid.

Requirement to apply for other benefits

The ICI program requires that you apply for other benefits, based on your medical condition. This decision is made by the company that administers ICI. You must apply for the benefit and complete the application process. For example, applications for Social Security Disability Insurance must be pursued through the administrative law judge level of appeal.

Returning to work part time: Impact on ICI benefits

If your physician releases you to return to work and your department can accomodate your restrictions, ICI payments will continue on a reduced basis. Your earnings, including vacation and holiday pay, will be offset at 75 percent. Sick leave earned will be offset at 100 percent. If you opt not to return to part-time work when released by your physician, your benefit will be reduced by an estimated earnings offset (the number of hours you are capable of working multiplied by your hourly rate of pay at the time you first become disabled).

It is important that employees receive information immediately if there is a possibility of being off work due to a disability. Contacts can be made to Employee@bussvc.wisc.edu.