Summer Prepay Deductions and Summer Session Benefits Eligibility

Original Issuance Date:         July 1, 2015

Last Revision Date:                August 5, 2021

1.     Policy Purpose

The purpose of this policy is to set forth the guidelines for the following:

• Maintaining employee benefit coverage over the summer months for faculty, academic staff, limited appointees, student assistants and employees-in-training that are on an academic year contract or on an annual contract that does not include work during one or more summer months.
• Benefit eligibility for employees whose first appointment is a summer service or summer session appointment.
• Administration of benefit changes that occur during a short work break.

2.     Responsible UW System Officer

Associate Vice President and Chief Human Resources Officer

3.     Scope and Institutional Responsibilities

This policy provides the framework for summer prepay deductions and summer sessions benefits eligibility for the university workforce except for employees of UW-Madison.

4.     Policy Background

Faculty, academic staff, limited appointees, student assistants and employees-in-training on an academic year contract or on an annual contract that does not include work during one or more summer months who are expected to return to employment on or before the start of the fall semester are eligible to maintain insurance coverage through the summer months by prepaying the benefit deductions. Employees are ineligible for Summer Prepay Deductions when employment is terminated at the end of the spring semester when there is not an expectation to return to an appointment (at any UW institution) for the fall semester and/or the employee does not have a summer appointment.

Prior to 2012, this annual process was referred to as “May Multiples” and all additional benefit deductions were taken from May earnings. Due to an increase in the employee health insurance premium, a decision was made to spread these multiple insurance deductions over the last three pay periods of the spring semester. Beginning in 2012, the reference to this annual process was changed to “Summer Prepay Deductions”. With the 2021 transition to bi-weekly pay for all employees, this practice has been updated to spread the insurance deductions over the last six bi-weekly pay periods of the spring semester.

This policy does not apply to university staff on a summer leave as they are either laid off between work periods or placed on a leave of absence.

Effective July 1, 2015, the Summer Prepay Deductions and Summer Session Benefits Eligibility transitioned from an administrative policy to a UPS Operational Policy. The UPS Operational Policies were integrated into the UW System Administrative Policy series as of July 15, 2019.

5.     Policy Definitions

Academic or C-Basis Appointments: Appointments directly tied to the academic year calendar

Annual or A-Basis Appointments: Appointments for the fiscal year

Short Work Break (SWB): An action in the Human Resource System (HRS) to denote a period of time when an employee is not working in his/her primary job but is still considered an active employee for benefits purposes. The short work break, for purposes of summer prepay deduction eligibility, is attached to the spring appointment

Summer Basis Appointments: Employment periods between the end of one academic year and the beginning of the next, paid as determined by the institution. This includes both Summer Service “V-Basis” and Summer Session “S-Basis” appointments.

Summer Prepay Deductions: Multiple insurance deductions from the spring semester payroll (deductions taken from the first six bi-weekly pay periods in March, April and May) to maintain insurance coverage during one or more summer months.

6.     Policy

A. Eligibility Criteria for Summer Prepay Deductions

Faculty, academic staff, limited appointees, student assistants and employees-in-training on an academic year contract or on an annual contract that does not include work during one or more summer months who are expected to return to benefits eligible employment on or before the start of the fall semester are eligible to maintain insurance coverage through the summer months and will prepay for summer coverage through benefit deductions on the last six payrolls of the spring semester.

The following employees also qualify for summer prepay deductions:

• Academic ”C” basis employees who are terminating UW employment after working a summer service or summer session appointment. These employees are eligible for summer prepay deductions that pay for coverage through the end of their employment.
• Employees who move from an Academic “C” basis to an Annual “A” basis appointment (or vice versa) are eligible to continue benefits between appointments even if the employee does not work during one or more of the summer months.
• Employees in the OT1 employee category may also be eligible for summer prepay deductions if they meet one of the criteria outlined above.

Each institution is responsible for identifying who is eligible for summer prepay deductions based on the criteria set forth in this policy.

If benefit premiums are unable to be collected through payroll via the summer prepay deduction process (i.e., insufficient earnings in the final six payrolls of the spring semester), and the employee has a summer appointment, employee paid deductions will be taken from the summer appointment earnings. If the employee does not have a summer appointment or does not have sufficient earnings from the summer appointment, the benefits billing process must be used to collect premiums from eligible employees. Once placed on benefits billing, the employee must remit direct payment in a timely manner to continue coverage.

The expectation to return in the fall for insurance benefit purposes does not constitute a contractual agreement or immediately imply eligibility for the Wisconsin Retirement System (WRS). WRS eligibility needs to be evaluated once the details of the contract are known and mutually agreed upon.

Employment is terminated at the end of the spring semester when there is not an expectation to return to an appointment (at any UW institution) for the fall semester and/or the employee does not have a summer appointment. These employees are ineligible for Summer Prepay Deductions. See section 6.D of this policy for information regarding late termination notices.

B. Determining Summer Prepay Deductions with HRS

The institutions will use the report from HRS along with evaluating employees who would not appear on the HRS annual report to determine employees who will receive summer prepay deductions from the first two paychecks of the month for the biweekly paycheck dates in March, April and/or May each year. A website outlining processing resources for HRS is available in section 7 of this policy.

(1) If an employee’s academic year appointment is benefits-eligible and the benefits primary flag is attached to that appointment:

HRS will automatically set up the employee to receive summer prepay deductions. UW-Shared Services will provide a list of these employees to the employing institution for review following the load. The institution must take action to stop or change the summer prepay deductions, if appropriate.

(2) If an employee’s annual basis appointment is benefits-eligible but the employee will not be working during one or more summer months, and the benefits primary flag is attached to that appointment:

HRS will not automatically set up the employee to receive summer prepay deductions. The institution must identify these employees, place them on a short work break in HRS for the duration of the summer break and manually set up the summer prepay deductions.

C. Benefit Plans Subject to Summer Prepay Deductions

(1) Summer Prepay Deductions will be taken for the following plans:

• State Group Health Insurance
• Supplemental Dental Insurance
• Vision Insurance
• State Group Life Insurance
• Individual & Family Life Insurance
• UW Employees, Inc. Life Insurance
• Accidental Death & Dismemberment Insurance
• Income Continuation Insurance (only taken on April and May payrolls)
• Accident Insurance

If paid through payroll deduction, prepaid summer deductions mirror the pre/post-tax deduction tax status of deductions during the employment contract period. Premiums paid through the benefits billing process are processed as post-tax.

Employees subject to taxable income under State Group Life Insurance will have taxable income applied to each bi-weekly summer prepay deduction.

(2) Summer Prepay Deductions will not be taken for the following plans:

• Flexible Spending Account (FSA) Program
• Health Savings Account (HSA) Program
• Tax Sheltered-Annuity (TSA) Program
• Wisconsin Deferred Compensation (WDC) Program

Employees on an academic year contract will have 18 deductions per year for FSA and HSA plans. Employees who do not work in the summer will also have 18-19 deductions per year for TSA WDC, WRS, and WRS Additional Contributions. If an employee does work in the summer, TSA, WDC, WRS, and WRS Additional Contributions will be automatically deducted from summer earnings, as per section 6.C.3, below.

(3)Plans Subject to Deductions from Summer Earnings

• Tax Sheltered-Annuity (TSA) 403(b)Program
• Wisconsin Deferred Compensation (WDC) 457 Program
• Wisconsin Retirement System (WRS) (including WRS Additional Contributions)

D. Late Termination Notice After Summer Prepay Deductions Taken

If summer prepay deductions are taken but it is later determined that the employee will not return in the fall or will terminate employment during the summer, a termination date must be entered in HRS and any summer prepay deductions taken for prospective coverage must be refunded.

Benefits should terminate per the plan contract. Continuation information will be provided to the terminating employee through the COBRA process.

Institutions shall not enter a retroactive termination date. The termination date entered must be the date the institution is informed of the employment termination, or the date the employee finishes working in a summer appointment, whichever is later.

E. Late Notification of Summer or Fall Appointment – Summer Prepay Deductions Not Taken or Refunded Due to Termination Date

If an employee does not have summer prepay deductions because the employee did not initially meet the eligibility criteria as outlined in section 6.A of this policy, but later meets the eligibility criteria AFTER the summer prepay deductions should have taken, the employee’s eligibility for insurance coverage during the summer months is outlined in sections 6.E.1 and 2 below.

(1) Notification of Summer or Fall Appointment Received Within 30 Days of Termination Date or COBRA Notice

If notice of the summer or fall appointment is received within 30 days of the termination date or 30 days after the date the COBRA notice is sent, whichever is later, the employee is eligible for continuous insurance coverage over the summer months.

The institution must rehire the employee to rescind the termination and place the employee on a short work break. Benefits must be reinstated to reflect continuous coverage. If the employee has a summer appointment, employee paid deductions will be taken from the summer appointment earnings. If the employee does not have a summer appointment, the employee must be placed on benefits billing to collect premiums for insurance coverage until premium deductions can be resumed through payroll deductions.

(2) Notification of Summer or Fall Appointment Received More Than 30 Days After Termination Date or COBRA Notice

If notice of the summer or fall appointment is received more than 30 days AFTER the termination date or more than 30 days after the date the COBRA notice is sent, whichever is later, the employee is not eligible for continuous insurance coverage over the summer months. This is considered a valid break in employment. The employment termination date will remain as entered in HRS.

Insurance coverage will end per the plan contracts based on the termination of employment. Benefit eligibility will be re-evaluated upon the start of the future appointment. If eligible for benefits upon rehire, the employee must submit new benefit applications within of the applicable deadlines based on the appointment start date.

F. Benefit Eligibility for New Employees Hired or Summer Contract who also have a Fall Appointment

(1) WRS Eligible Fall Appointments – If a new employee works on a summer contract prior to a WRS-eligible fall appointment, the following applies:

• Benefits Eligibility: WRS and benefit eligibility begin the first day of the summer appointment.
• Benefits Enrollment Period: All benefit enrollment periods are based on the start date of WRS employment which would be the summer appointment start date. In situations where there is greater than a 30 day break in employment between the summer and the fall appointments, the employee is still eligible for benefits as of the first day of the summer appointment since that is the WRS hire/enrollment date.
• Expectation Change: If an employee secures a WRS eligible fall contract while working in a non-WRS eligible summer appointment, the employee is eligible for benefits when the expectation changes (i.e., upon securing the fall contract). If the employee does not have a secured fall employment contract either at the beginning of or during the summer contract, the employee will be evaluated for benefits eligibility at the start of the fall semester.
• Premium deductions during Summer Appointment or Employment Breaks: Employees pay benefit premiums through benefits billing for insurance coverage until premium deductions can be taken through payroll deduction from an Annual “A” basis or Academic “C” basis appointment. Benefit premium deductions will be set up to be taken from Summer Service “V-Basis” and/or Summer Session “S-Basis” appointments. If the summer employment benefits coverage period is contained solely within the month of September, the institution may set up a benefit deduction from the September payroll periods, to collect missed insurance deductions in lieu of using benefits billing.

(2) Non-WRS Eligible Fall Appointments – if a new employee works on a summer contract prior to a non-WRS-eligible fall appointment, the following applies:

If there is a break of fewer than 30 days between summer and fall appointments:

• Benefits Eligibility: If there is less than a 30-day break between the summer and fall appointments, the attributes of the two appointments can be combined to determine benefits eligibility under the Grad Assist/Short-Term Academic benefits package.
• Benefits Enrollment Period: If benefit eligibility requirements are met, benefit eligibility begins as of the first day of the summer appointment and all benefit enrollment periods are based on the start date of the summer appointment.
• Expectation Change: If an employee secures a benefits-eligible non-WRS fall contract while working in a summer appointment, the employee is eligible for Grad Assist/ShortTerm Academic benefits package benefits when the expectation changes, (upon securing the fall contract) provided there is a less than 30 day break between appointments.
• Premium deductions during Summer “S” Appointment or Employment Breaks: Employees pay benefit premiums through benefits billing to collect premiums for insurance coverage until premium deductions can be taken through payroll deduction from an Annual “A” basis or Academic “C” basis appointment. Benefit premium deductions are not set up from Summer Service “V-Basis” and/or Summer Session “S-Basis” appointments. If the summer employment benefits coverage period is contained solely within the month of September, the institution may set up a pay line from the September payroll periods, to collect missed insurance deductions in lieu of using benefits billing.

If there is a break equal to or greater than 30 days between summer and fall appointments:

• Benefits Eligibility: If there is at least a 30-day break between the summer and fall appointments, each appointment must individually meet the requirements under the Grad Assist/Short-Term Academic benefits package.
• Benefits Enrollment Period: If eligibility requirements are not met by the summer appointment, benefits eligibility should be reevaluated at the start of the fall appointment.
• Expectation Change: Not applicable if there is more than a 30 day break between non-WRS eligible appointments.

G. Employee Benefit Election Changes due to Life Events while on Short Work Break

When an employee on a summer appointment has a qualifying life event (marriage, birth, adoption, etc.) which results in a change in insurance coverage level while on a short work break, any additional premiums owed will be collected from the summer appointment earnings. If the additional premiums cannot be taken from the summer appointment earnings, the additional premiums owed will be collected through the benefits billing process or through a payroll deduction on the employee’s first paycheck when they return in the fall.

More information on qualifying life events is available on the UW System Human Resources Family Changes webpage. Administrator resources are available on the benefits administration Family Changes webpage.

H. Employer Responsibility for Payment of Fringe Benefits for Summer Coverage when Employee Transfers between UW System Institutions

For an employee who is eligible for summer prepay deductions, and whose spring and subsequent summer or fall appointments are with two different UW System institutions, the employing institution of the employee for the spring semester will be responsible for paying the fringe benefits for the summer coverage.

The spring appointment should continue and be placed on a SWB. The spring appointment termination date must align with the end of the summer appointment; or the date the employee is returned from SWB, whichever is later.

I. Policy Administration

This policy is administered and monitored by UW System Human Resources. Policy questions should be directed to UW System Benefits Policy Administration. There may be rare exceptions to the criteria outlined in this policy. The UW System Human Resources Benefits Director or his/her designee will determine if the exceptions are allowable.

7.     Related Documents

UW System Human Resources Policy Website: Summer PrePay Deductions and Summer Session Benefits Eligibility

8.     Policy History

Revision 4: August 5, 2021

Revision 3: May 6, 2021

Revision 2: July 9, 2020

Revision 1: April 22, 2019

First approved: July 1, 2015

9.     Scheduled Review

August 2026