Overview
A temporary work reduction (TWR) is a type of furlough where an employee’s work hours are reduced. Employees retain their position during the temporary work reduction as well as benefits. A temporary work reduction is not a layoff, non-renewal, or termination.
Refer to UW System Administrative Policy 1200-Interim: Furlough Policy for additional information.
How Benefits are Affected During a Temporary Work Reduction
Below is information on how each benefit plan is affected by a temporary work reduction.
You are eligible for the employer contribution towards your health insurance for the first three months of your temporary work reduction. See the Premium Payment section below for additional information.
Example: You go on a temporary work reduction beginning on June 20th. Health insurance premium has already been deducted for June coverage. The Universities of Wisconsin will pay the employer contribution for your coverage for July, August, and September.
If your temporary work reduction extends beyond three months and your FTE remains at 50% or above, the employer contribution towards your health insurance does not change.
Note: If you do not pay your premiums while on a temporary work reduction, your coverage will end. Furthermore, if you were enrolled in family coverage and you pass away after your coverage ended, your surviving family members will not have access to your sick leave credits to pay health insurance premiums.
Being placed on a temporary work reduction is not a leave of absence therefore you may not lapse coverage. If premiums are not paid, coverage terminates and you will not have the opportunity to re-enroll upon your return to a full work schedule. Your next opportunity to enroll would be during the Annual Benefits Enrollment period absent another qualifying life event (for example, marriage, birth of a child).
If you are receiving the Opt-Out Incentive, payments will continue during a temporary work reduction.
Your coverage will continue if you continue to pay the premium.
Your coverage will continue if you continue to pay the premium.
Your coverage will continue if you continue to pay the premium.
Your coverage will continue if you continue to pay the premium.
Your coverage will continue if you continue to pay the premium.
Note: The UW Employees, Inc. Board has decided to terminate the UW Employees, Inc. Life Insurance Plan effective January 1, 2025. Employees enrolled in the plan as of December 31, 2023 will be provided coverage through December 31, 2024. Group coverage in the UW Employees, Inc. Life Insurance plan will end January 1, 2025.
If you are eligible and have paid the annual premium for the plan year, coverage continues until December 31st.
If you are eligible and do not have a payroll deduction you will receive a bill for the annual premium. You have 60 days from December 31st to pay your premium. If the premium is not paid by the due date, your coverage will end as of the prior December 31st with no option of conversion.
Your coverage will continue if you continue to pay the premium.
Your coverage will continue if you continue to pay the premium.
Income Continuation Insurance (ICI) premiums are paid for the current month of coverage. For example, the premium deduction from June earnings is for June coverage.
If you are not receiving ICI benefits while on temporary work reduction, your coverage will continue if you continue to pay the premium. You are eligible for the employer contribution towards your income continuation insurance for the first three months while you are on a temporary work reduction.
If you are approved for ICI benefits while on temporary work reduction, your ICI premium is waived (you pay no premium).
ICI Premium Calculation
Annually ICI premiums are reviewed and adjusted the following February. Premiums for faculty, academic staff and limited appointees are determined by the employee’s prior year’s eligible WRS earnings and elimination period elected. University staff premiums are determined by the employee’s prior year’s eligible WRS earnings and their Premium Category. The Premium Category is based on the total accumulated unused sick leave balance at the end of the year or the amount of additional sick leave accumulated in the prior year (Premium Category 3).
If you were placed on an temporary work reduction during 2022, you may experience a change to your ICI premium because of reduced earnings and a change in sick leave balance (for university staff only). Additionally, if you become disabled in 2023, the ICI benefit will be based on your 2022 WRS eligible earnings.
Pre-tax contributions will continue to be deducted from your paycheck for any pay period that you have pay. You may continue to incur and submit qualifying eligible expenses for reimbursement from your FSA.
- If you do not have enough pay and your FSA deduction is reduced, on your next paycheck your annual election amount will be recalculated for the remaining payrolls in the calendar year and your pre-tax payroll contributions will resume.
- Incurring Eligible Expenses:
- Health Care FSA: You may continue to incur eligible expenses to submit for reimbursement while you are on temporary work reduction .
- Dependent Day Care: You may continue to incur eligible expenses until December 31st.
You may continue to request Health Savings Account (HSA) distributions for qualified medical, dental and/or vision expenses if sufficient funds are available in your account.
Pre-tax contributions will be deducted from your paycheck for any pay period you have pay. The employer contributions to your HSA will continue (if eligible).
Contributions will be deducted from your paycheck for any pay period that you have eligible pay.
Wisconsin Retirement System (WRS) Creditable Service: For hours you do not work due to a temporary work reduction you do not earn WRS creditable service. Depending on the percent of time your schedule is reduced and the employee class you are in you may receive a partial year of creditable service. A partial year is a percentage of the year that is equivalent to the hours spent in paid status (i.e. actual hours worked, vacation, sick leave or other paid leave status) divided by the number of hours required to qualify for a creditable year of service:
- For faculty, academic staff, or limited appointees 1,320 hours are needed from 7/1 – 6/30 to receive a full year of creditable service.
- For university staff employees, 1,904 hours are needed from 1/1 – 12/31 to receive a full year of creditable service.
- For executives, 1,904 hours are needed from 7/1 – 6/30. Executives are employees that hold the highest level positions (for example: president, vice president, chancellor).
- Note: An individual can earn up to 1.0 year of creditable service in a 12-month period.
Note that for employees who first became eligible for the WRS after July 1, 2011, five years of creditable service are needed to be vested in the WRS.
WRS retirement benefit: Your WRS retirement benefit is calculated using two methods; the formula method and the money purchase method. At retirement the benefit is calculated under both methods and you receive the higher amount. Under the formula benefit method, your WRS retirement benefit is based on your three highest calendar (for university staff) or fiscal (for faculty, academic staff, limited appointees) years’ eligible earnings. The years do not need to be consecutive or the last years reported. Under the money purchase method, your WRS retirement benefit is based on your total employee and employer contributions made to the plan.
While on a temporary work reduction, if your eligible earnings are reduced, it may not be one of your three highest calendar or fiscal years’ earnings used under the formula method. Under the money purchase benefit method, if your eligible earnings are reduced, your employee and employer contributions will be less. Legislative action is required to change how WRS eligible earnings are determined while on a temporary work reduction.
For additional information on calculating your WRS retirement benefit review the ETF Calculating Your Retirement Benefits (ET-4107) brochure.
To increase or decrease your contribution election, log into MyUW Portal or complete a Salary Reduction Agreement (SRA) and submit it to your institution human resources office.
To stop your contribution election or change your recordkeeper(s), complete a Salary Reduction Agreement (SRA) and submit it to your human resources office.
Contributions will be deducted from your paycheck for any pay period that you have eligible pay unless you make a change to your payroll deferral amount.
To change your contribution amount contact WDC directly at wdcquestions@empower-retirement.com or (877) 457-9327.
Contributions will be deducted from your paycheck for any pay period that you have eligible pay unless you make a change to your payroll deferral amount.
During a temporary work reduction, you will continue to earn vacation and sick leave at your scheduled FTE percent in effect prior to your temporary work reduction.
You may not use vacation, personal holiday, floating legal holiday or sick leave in lieu of days you are on a temporary work reduction.
You will receive holiday pay at your scheduled FTE percent in effect prior to your temporary work reduction. During the week of the holiday you may have to reduce the number of hours worked in order to not exceed your scheduled hours during your temporary work reduction.
Employee Assistance Program (EAP) benefits are available to employees on furlough. Review the EAP web page for information on contacting the EAP provider.
Premium Payment
During a temporary work reduction, benefits may be continued as long as premiums are paid.
- For State Group Health Insurance, you have the option of having payroll deduction, being direct billed or using accrued sick leave.
- For Dental Insurance, Vision Insurance, State Group Life Insurance, Individual & Family Life Insurance, UW Employees, Inc. Life Insurance, Accidental Death & Dismemberment Insurance, Accident Insurance and Income Continuation Insurance, you have the option of having deductions from your paychecks or being direct billed.
If you elect to have your premium continue via payroll deduction and you do not have enough pay to cover the premium your premium will go into arrears and may be collected on your next paycheck or you may be billed directly (benefits billing).
Direct billing includes paying via check, money order or credit card. If you choose direct billing, you will receive a monthly invoice. Invoices are sent around the 20th of each month and payment is due on the 10th of the month. For example, for July coverage, you will be billed on June 20th. Payment is due by July 10th. If payment is not received by the 10th of the month your coverage may be canceled.
If you are placed on a temporary work reduction complete the Temporary Work Reduction / Consecutive Day Furlough for a Partial Month Insurance Selections Form before you go on a temporary work reduction so you know what will happen to your benefits during your temporary work reduction. Your Temporary Work Reduction / Consecutive Day Furlough for a Partial Month Insurance Selections Form can be completed one of two ways:
- Online: 1) Log into the MyUW Portal, 2) Find the ‘Benefit information’ tile and click ‘Launch full app’, 3) On the ‘Summary’ tab scroll to the bottom and click ‘View Benefits Summary’ 4) In the left hand navigation click on ‘Temporary Work Reduction Insurance Selections’, 5) To start filling out the form click ‘Add a New Value’ button or to see a form previously submitted click ‘Search’.
- Fillable PDF/Paper: 1) Open the 2) Complete the form and submit it following the directions on the form. The form is a fillable document that can be completed and submitted via email or printed off and mailed.
Being placed on a temporary work reduction is not a leave of absence therefore you may not lapse coverage. If premiums are not paid and coverage terminates you will not have the opportunity to re-enroll upon return to a full work schedule. Your next opportunity to enroll for coverage would be during the Annual Benefits Enrollment period absent another qualifying reason (for example, a change in family status).
Insurance premiums are deducted the same month as the month of coverage. Deductions are from the first two biweekly paychecks of the month (24 paychecks a calendar year). If you let your coverage lapse by not paying the premium, coverage will end at the end of the month that your temporary work reduction started. For example, if your temporary work reduction starts on June 5th and you had deductions from your paychecks with a June pay date your insurance premiums will be paid through the end of June.
Using Sick Leave to Pay For Premiums While on a Temporary Work Reduction
During a temporary work reduction, State Group Health Insurance coverage may be maintained using your accrued sick leave (only available to employees who are eligible to earn sick leave, see UW System Administrative Policy 1212 (formerly BN 3) Sick Leave, section 4.A. for information on eligibility to earn sick leave).
Available sick leave is determined by multiplying your accrued sick leave balance by your current hourly rate of pay. If you elect to use sick leave to maintain your State Group Health Insurance coverage you will receive a summary of sick leave hours used and remaining balance after your temporary work reduction is complete. Use of sick leave to pay for State Group Health Insurance premiums will result in a tax liability and withholding to the employee.
University Staff employees – If you elect to use your sick leave to pay your State Group Health Insurance premium while on a temporary work reduction and you are enrolled in Income Continuation Insurance, your Income Continuation Insurance premium category could be affected during the next annual evaluation period.
Faculty, Academic Staff, Limited Appointees and University Staff employees – If you elect to use your sick leave to pay your State Group Health Insurance premium while on a temporary work reduction, your Income Continuation Insurance elimination period could be affected if you file a claim for benefits.
Ending Employment During a Temporary Work Reduction
If you end employment during a temporary work reduction, refer to the appropriate Employment Changes area for information about continuing your coverage.
Resources
Beneficiary Designations
Remember to review and update your beneficiary designations when you have a life event to make sure that your benefits are paid according to your wishes. Benefit plans that have beneficiary designations include life insurance plans, retirement plans and the health savings account.
For more information review the Beneficiary Information web page.
Every effort has been made to ensure this information is current and correct. Information on this page does not guarantee enrollment, benefits and/or the ability to make changes to your benefits.
Updated: 04/11/2024