Benefits: Summary of Revised Recommendations

Work team goal statement

The University of Wisconsin‐Madison will continue to participate in state administered health, life, and disability insurance programs and the Wisconsin Retirement System. Beyond this, the HR Design Project presents an opportunity to review benefit levels and configurations and design alternative options as appropriate.

The HR Design Benefits team worked to review, assess, and develop benefit options for paid leave, supplemental insurances, and entitlements beyond pay. Our charge included reviewing benefit differences among current employment groups and determining what benefits should be consistent, what leave benefits should be available to employees, how leave benefits should accrue, and what new benefits should be considered.

What are concerns about the current system?

External perceptions about public sector and university benefits

We believe criticisms leveled at the university’s benefits, which some people consider “overly generous” by comparison with the private sector, are misdirected. The University of Wisconsin‐Madison competes for labor in many markets (global, national, regional, local) and must attract and retain the best employees in all types of positions to remain an “outstanding public research university [applauded] for its range of significant accomplishments and progress and its continuing commitment to world‐class education, research and public engagement.”(1) Benefits remain a critically important part of the total compensation package.

Metrics

Without reliable longitudinal metrics, it is difficult to assess whether benefits are meeting employee needs, whether they are being administered as efficiently and effectively as possible, and whether our benefits offer a competitive lead.

Benefits Education

Employees cannot take full advantage of benefits they do not fully understand. A more user‐friendly system would help employees learn about and select benefits, find answers to their questions, and be aware of effects of their benefits choices. Additional resources will be required to provide both timely education for new employees and benefits counseling desired by ongoing employees.

Consistency and Equity

The proliferation of differences in benefits—in part an outcome of disconnects between bodies charged to develop benefits for classified and unclassified employees, and in part an unintended consequence of the collective bargaining process—make our benefits system unnecessarily difficult to administer, confusing, and inequitable. HR practice varies across divisions and departments. To some extent, an employee’s benefits experience depends on where he or she works. An employing unit’s resources, business constraints, and supervisor’s
philosophy affect how benefits can be used (e.g., leave) and what benefits are available (e.g., tuition
reimbursement). These differences contribute to problematic class/caste distinctions and fuel hard feelings.

Gaps and Redundancies

In some cases, there are mismatches between available benefits and employee needs. For example, while the university offers a generous unpaid leave for childbirth and adoption, most employees cannot afford a lengthy absence. Premiums for a 30‐day waiting period for Income Continuation Insurance (ICI), the only option currently available to new classified employees, are more expensive and consequently out of reach for many. Multiple supplemental insurances create redundancies and confusion (four supplemental life insurance plans, three options for dental insurance, and two options for vision insurance).

State‐administered Benefits

Requiring higher premium contributions and co‐insurance out‐of‐pocket payments for State Group Health Insurance and the new employee contribution to WRS retirement have disproportionately affected lower paid employees. The Wisconsin Retirement System (WRS) is highly valued and many employees are concerned about its future. Both the system and the defined benefit annuity it offers should be protected. Changes in the university’s relation to the state and in employment categories may require changes to state administered Income Continuation Insurance (ICI).

How do the recommendations address these concerns?

The HR Design Benefits team believes a benefits package that demonstrates care and commitment to employees throughout their careers, and that compares favorably with academic peers and private competitors, will attract, support, develop, and retain the talented community of employees the University of Wisconsin‐Madison needs to maintain—and continually grow in stature as—a world‐class university.

We strongly recommend making employment benefits consistent across employee categories. We propose providing uniform leave benefits (except as noted in the full recommendations); streamlining supplemental insurances; preserving key benefits, such as the Supplemental Health Insurance Conversion Credits (SHICC) program; introducing new benefits, including paid parental leave and Leave Share; developing a centrally funded and administered Tuition Assistance program to support employees’ continuing education and career advancement; and expanding “life enhancers” that support wellness and work‐life balance, benefit employees, and provide opportunities to contribute on and beyond our campus.

In addition to simplifying our benefits system, we recommend strengthening its foundation by developing reliable HR metrics, enhancing benefits education and consultation, and providing frequent, sustained opportunities for employee engagement. Consistent, streamlined benefits will be easier to measure and to adjust when data and voices from campus suggest changes are needed. Participatory decision‐making through shared governance and other opportunities for collaboration and engagement will foster transparency and the continuing vitality of our benefits system.

Benefits education is integral to an effective benefits system. Multiple options for benefits education and consultation will help employees understand the pros and cons of benefits choices, select benefits in a timely way, and use benefits when they are needed. Good information, clearly communicated in a timely way, can prevent problems that would otherwise consume many times the amount of resources proactively invested. Uniform leave benefits will be more equitable, transparent, adaptable, and efficient.

  • While our team acknowledges differences in Fair Labor Standards Act (FLSA) non‐exempt and exempt jobs,reflected in how employees report leave use, we believe that our leave system should reflect individual and social needs related to leave that employees have in common, rather than differences among employment categories.
  • Minimizing differences in policy will yield greater consistency and fairness in HR practice. Equal treatment will foster trust. Greater transparency and shared expectations will make leave decisions easier and less contentious for employees and supervisors. When less time and energy are needed to navigate the intricacies of policy and contract differences, more can be devoted to meeting individual employees’ needs and supporting their development.
  • Minimizing differences in how employees are treated will support a positive campus climate. When employees perceive differences in treatment as a proxy for how their work is valued, these differences contribute to class/caste distinctions and morale suffers. Eliminating unnecessary distinctions will mitigate these effects.
  • Well‐aligned leave benefits will offer employees the flexibility they need to manage personal and professional responsibilities throughout their careers. New employees would have “day one” access to 40 hours of sick leave and 4 weeks of vacation, and also to a new paid parental leave benefit following birth or adoption. Increasing vacation allocations early and often, in combination with options for vacation carry over and leave banking, would support work‐life balance for early to mid‐career employees. The ability to bank up to 1040 hours (6 months’ worth) of vacation, unlimited sick leave accrual, and sick leave conversion programs (ASLCC and SHICC) would continue to support long‐term planning for retirement.

Our recommendations seek to balance the needs and wishes of employees with the needs and resources of our university. We have tried hard to limit the impact of changes on individual employees.

These recommendations also seek to balance and recalibrate how we think about leave. Our current benefits system freights leave with multiple, competing values. Leave is for rest and rejuvenation, a form of compensation, an insurance against change and job loss, a ticket to health insurance after retirement, and perhaps more. The long‐term practice of increasing benefits in lieu of raising salaries over‐emphasizes the value of leave as compensation and consequently distorts our leave system. We need to create a system that encourages employees to use leave as well as saving it responsibly for the future.

All aspects of leave interrelate: altering one recommendation will change the effects of others and may affect eligibility for leave‐dependent benefits. Our team’s advice about various kinds and aspects of leave should be read as part of a single, multifaceted recommendation.

A unified leave system cannot last if future decision‐makers yield to requests for changes that reintroduce fragmentation. This initiative will succeed to the extent that future adaptations are collectively identified and discussed, are supported by accepted HR metrics, and benefit all employees.

Streamlined supplemental insurances will meet employee needs more effectively and efficiently. An e‐Benefits “shopping cart” would help illustrate options and costs, making it easier for employees to select coverage they need. Offering comparable, or better, options within a single plan, at a comparable, or reduced, cost would cut the time and effort employees currently spend evaluating the applicability and value of plans offered in our current system – and could eliminate the need for employees to purchase multiple plans. Open enrollment opportunities will support employees’ changing needs as their lives and careers evolve. Thoughtful design will make it possible to add and subtract features as professional best practices change.

List of Recommendations

  • Develop reliable HR metrics to assess how well the university’s benefits system is working and maintain a competitive edge in recruiting and retaining excellent employees.
  • Improve benefits education and communication to reduce confusion and enable employees to maximize their benefits.
  • Increase long‐term opportunities for employee engagement, including regular assessment and participatory decision‐making to keep the university’s benefits system strong and vibrant into the future.
  • Create a single, unified system of paid leave for WRS‐eligible employees.

These recommendations do not alter or provide new benefits for student hourly employees, graduate assistants (TA’s, PA’s, RA’s), employees‐in‐training, limited term employees, or short‐term academic staff, except as noted in the full recommendations.

  • Conduct a focused analysis to identify a fair and competitive benefits and compensation structure for University of Wisconsin‐Madison Trades employees.
  • Provide a period of paid parental leave following birth or adoption.
  • Continue to permit employees to use accrued paid leave, including sick leave, for bereavement leave, under a single policy.
  • Replace classified and unclassified Catastrophic Leave programs with a new, centrally administered Leave Share program.
  • Create a single unpaid leave policy that can be used for an employee’s own serious health condition, to care for a family member with a serious health condition, to augment a period of paid parental leave and use of accrued paid leave following a birth or adoption, or to seek political office, accept a political appointment, or provide professional service.
  • Streamline supplemental insurances, eliminating duplication and offering better options within plans to meet varying employee needs.
  • Provide “Day One” coverage for health insurance: eliminate the requirement for classified staff to wait until the 1st day of the 3rd month of employment to receive the employer contribution toward the State Group Health Insurance premium.
  • Advocate at the federal level to end “Imputed Income” for domestic partner health insurance. Respect differences in family structure and provide health insurance at an equal cost to all employees. Make an equity related payment, providing reimbursement for imputed income tax and tax on the payment, to employees with family health insurance covering a domestic partner and dependents (“grossing up”).
  • Conduct a formal study of health care options for University of Wisconsin‐Madison employees, with a focus on  the needs of low‐income employees. In the interim, provide some type of health care premium relief for low income employees.
  • Preserve benefits that employees value, including the Supplemental Health Insurance Conversion Credits (SHICC) program.
  • Recommend improvements to the state‐administered Income Continuation Insurance program and offer the same ICI benefit to all university employees. If recommendations are not accepted by ETF, provide a supplemental wage insurance option.
  • Advocate to protect WRS Retirement and the defined benefit annuity it affords. Investigate mechanisms for reducing financial hardship resulting from higher premium contributions required by Act 10.
  • Expand “Life Enhancers,” including community service; a wellness program; childcare, dependent care, and elder care referrals; parking and transportation; and discounted services.

Citation

1. “The Wisconsin Retirement System is One of the Healthiest in the Country.” Center on Wisconsin Strategy (March 2011).
www.cows.org/pdf/bp‐wrs.pdf