Administration and Oversight of Group Insurance …

Report 19-2

February 2019

Administration and Oversight

of Group Insurance Programs

Department of Employee Trust Funds

Legislative Audit Bureau n

Report 19-2

February 2019

Administration and Oversight

of Group Insurance Programs

Department of Employee Trust Funds

Joint Legislative Audit Committee Members

Senate Members:

Assembly Members:

Robert Cowles, Co-chairperson

Chris Kapenga

Alberta Darling

Janet Bewley

Tim Carpenter

Samantha Kerkman, Co-chairperson

John Macco

John Nygren

Melissa Sargent

Katrina Shankland

Report 19-2

February 2019

LEGISLATIVE AUDIT BUREAU

State Auditor

Joe Chrisman

The Legislative Audit Bureau supports the Legislature in its oversight

of Wisconsin government and its promotion of efficient and effective

state operations by providing nonpartisan, independent, accurate, and

timely audits and evaluations of public finances and the management

of public programs. Bureau reports typically contain reviews of

financial transactions, analyses of agency performance or public policy

issues, conclusions regarding the causes of problems found, and

recommendations for improvement.

Special Assistant to

the State Auditor

Anne Sappenfield

Performance

Evaluation Director

Dean Swenson

Team Leaders

Noah Natzke

Maria Toniolo

Evaluators

Nehemiah Chinavare

Nick Lardinois

Sara Sanders

Nathaniel Staley

Kyle Swalls

Publications Designer

and Editor

Susan Skowronski

Reports are submitted to the Joint Legislative Audit Committee

and made available to other committees of the Legislature and to

the public. The Audit Committee may arrange public hearings on

the issues identified in a report and may introduce legislation in

response to the audit recommendations. However, the findings,

conclusions, and recommendations in the report are those of the

Legislative Audit Bureau.

The Bureau accepts confidential tips about fraud, waste, and

mismanagement in any Wisconsin state agency or program

through its hotline at 1-877-FRAUD-17.

For more information, visit legis.lab.

Contact the Bureau at 22 East Mifflin Street, Suite 500, Madison, Wisconsin 53703;

AskLAB@legis.; or (608) 266-2818.

CONTENTS

Letter of Transmittal

1

Report Highlights

3

Introduction

9

Expenditures and Staffing

15

Expenditures

Staffing Levels

15

17

Group Health Insurance Program

21

Expenditures and Revenues

Participants

Program Administration

Consultant Recommendations

Programmatic Changes

Contract Administration

21

24

27

28

29

31

Group Health Insurance Program Reserves

35

Program Reserve Amounts

Administration of Program Reserves

Target Ranges for Program Reserves

Information Provided by the Program Actuary

Actuarial Audit

Issue for Legislative Consideration

Employer Opinions about the Group Health Insurance Program

Satisfaction with the Program

Satisfaction with Information and Assistance that ETF Provided

Satisfaction with GIB

Non-Participating Local Governments

Disability Insurance Programs

Expenditures and Revenues

Participants

Program Administration

Administrative Policies and Procedures

Contract Administration

Program Reserves

Program Redesign

35

42

42

44

46

47

49

49

52

55

55

57

57

62

63

64

64

67

71

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