While state-mandated Temporary Disability Insurance benefits are not new to New Jersey, a new bill was signed into legislation earlier this year which impacts New Jersey Temporary Disability Benefits (TDB) Law (among others). We will have more in-depth articles regarding all those changes – what they are, when they go into effect, and what you need to know – coming soon. Subscribe now to never miss a post!
With all those soon-to-come changes at top of mind, we put together a quick crash course on the basics of Temporary Disability Insurance benefits in New Jersey with your frequently asked questions.
What is Temporary Disability Insurance in New Jersey?
Temporary Disability Insurance, or TDI for short, is insurance coverage mandated by the New Jersey Temporary Disability Benefits (TDB) Law and provides covered employees with partially-paid time off due to a non-work related illness, injury or other disability, including pregnancy/birth of a baby.
This benefit is for the employee’s own leave; New Jersey has another program, Family Leave Insurance (FLI) which provides partially paid wage replacement to care for a family member, similar to New York’s Paid Family Leave – more FLI in future posts.
By default, employers receive Temporary Disability Insurance coverage through the NJ state plan. But, they also have the option to provide coverage through a private insurance carrier in the form of an approved private plan.
Are all New Jersey employers required to provide TDI?
Covered employers, or private employers with one or more employees and a minimum payroll of $1,000, must contribute to the state fund or provide an approved private plan to their employees.
There are some limited exceptions: for example, government entities are optional.
What is an approved private plan?
An approved private plan is an alternative to the New Jersey state plan, and can be self-funded by a NJ employer, or provided through an approved insurance carrier, or a union welfare fund.
ShelterPoint has been approved to provide private plans since 2003. More on private plans coming soon!
How much do NJ Temporary Disability Insurance benefits pay?
In 2019, the weekly benefit pays 66⅔ % of the covered employee’s average weekly wage (AWW), capped at $650/week.
The maximum weekly benefit amount is determined annually by the NJ Department of Labor, and is based on the statewide average weekly wage (SAWW).
How long can an employee be out on leave?
The maximum benefit duration is 26 weeks per disability.
Do I have to cover employees who live outside New Jersey?
If you’re a New Jersey employer who has to provide TDI, then yes, under the following conditions: 1) the employee works in New Jersey, and 2) state unemployment withholdings are made to New Jersey. And finally, New Jersey doesn’t allow employers or private plans to extend coverage for out-of-state employees.
Is there a waiting period?
Yes, 7 days, i.e. benefits begin on the 8th day of consecutive illness or injury. However, after 22 consecutive days of disability, the 7-day waiting period is covered.
After the waiting period, claimants can receive partial benefits while working on a reduced work schedule.
Does TDB law provide job protection while an employee is out on disability?
Historically no. However, Bill A3975, broke new ground by prohibiting employer discrimination or retaliation against an employee following a period of TDI leave, including refusal to reinstate an employee following leave. This provision applies to employers with over 30 employees.
Who is eligible to receive Temporary Disability Insurance Benefits?
You must be an employee who works in the state of New Jersey for a covered employer, and meet minimum gross earnings requirements.
In 2019, for example, you must have earned at least $172 weekly over 20 weeks, or have earned $8,600 combined in the base year. The state and approved private plan carriers consider five completed quarters preceding the date of your disability claim, and determines the base year based on the first four quarters of that timeframe. So, for example if your claim begins between April,2019 - June 2019, your claim is based on earnings from January 1, 2018 – December 31, 2018. Your wages can of course include overtime, bonuses, and tips. Stay tuned for a more in-depth post on eligibility coming soon.
Who pays for Temporary Disability Insurance?
Typically both the employer and their employees contribute to TDI in New Jersey.
When coverage is provided through the state, employees must contribute. If TDI coverage is with a private carrier, the employer has the option to make the plan non-contributory. While the non-contributory plan design saves employees from withholdings on their paycheck, a contributory plan reduces the taxable percentage of the TDI benefit when they go out on disability.
How much do employers and employees pay for TDI?
For employers, their contribution varies based upon their experience rating, which is the result of the group’s claims history. For 2019, employers contribute up to the first $34,400 in salary for each employee. The taxable wage base changes each year, on January 1st.
The maximum employee contribution is determined annually by the New Jersey Department of Labor and Workforce Development. In 2019, for example, employees pay 0.17% of the current taxable wage, capped at $34,400. So, the maximum NJ TDI annual contribution an employee would pay in 2019 is $58.48.
Still have questions about New Jersey’s Temporary Disability Insurance?
Our Disability Experts will be happy to help! Contact us anytime at: TDIQuestions@shelterpoint.com.
The information in this post is not intended as an offer of coverage (“Invitation to Contract”). It is for illustrative purposes only, providing a general overview of the services described. It is not a contract. Available in NJ only. The Temporary Disability Benefits (TDB) Law (New Jersey Revised Statutes Title 34, Workers’ Compensation Law) governs this private plan and its interpretation and administration. All coverage extends up to TDB Law limits reflected in this policy. Please refer to the policy and TDB law for coverage details, a complete listing of covered services, provisions, conditions, exclusions, and terms under which the policy may be continued or cancelled. In the event of conflicting information with the policy and applicable TDB Law, the policy and TDB Law will take precedence over what is shown in this material. Claim payment is not guaranteed; benefit amount depends on wages. Policies have a statutory 7-day waiting period.
ShelterPoint Life Insurance Company (principal office in Garden City, NY) in: NJ (form# TDB-P-NJ