Statutory Benefits

NJ Temporary Disability Insurance:
Premium & Contributions

How Much Does
NJ Temporary Disability Insurance Cost?

The cost of Temporary Disability Insurance (TDI) depends on each employer group’s particular claims experience and composition, since both the employee and employer taxable wage base play a key role in the premium calculation. In New Jersey, both the employer and employee contribute to the TDI premium, regardless of whether coverage is through the State Fund or an approved private plan.

The State of NJ does, however, set a maximum of how much an employer may ask employees to contribute to the premium. The taxable wage base for employer and employee, and maximum employee contribution get updated annually and are usually announced in the fall for the following calendar year.

For calendar year 2022, the maximum employee contribution rate is set at 0.14%. This comes out to a maximum of $212.66 per year that an employer may can withhold from an employee to fund the TDI premium.

The updated taxable wage base for employers is set at $39,800 for 2022.

Employee Contribution Rate	0.14%
Employee Taxable Wage Base	$151,900
Employee Maximum Contribution	$212.66 per year
Employer Taxable Wage Base	$39,800

How It Works for Fully-insured Private Plans:

As an approved private plan provider, ShelterPoint’s premium is comprised of two rates, an employee rate and an employer rate. The two rates together are often referred to as the “Combined Rate”. The employee rate is not automatically the same as the maximum employee contribution. Depending on the experience of your group, the employee rate can never be higher than the maximum employee contribution rate. If the Combined Rate comes in higher than the maximum amount you can withhold from your employees, the difference represents the employer rate. In these situations, you, as the employer, are responsible for funding the remainder of the Temporary Disability Insurance premium.

TDI Expert Tip:

With private coverage, the same maximum employee contribution as set by the State still applies.
If you are withholding employee contributions, please remember to adjust your employees’ contributions each January to the new maximum contribution percentage.
Adjust contributions in January even if your policy renews later in the calendar year, e.g. if your policy renews on April 1, your experience will be reviewed to determine your updated premium then.
You are not obligated to take any contributions at all, i.e. you may fund a higher share of the employee rate or the entire employee rate.

Why Choose a Fully-insured Private Plan?

Insurance carriers have built expertise and scalability around administering and paying claims. This focus may bring other advantages such as faster claims turnaround and dedicated claims service – potentially resulting in a better insurance experience for employees. Learn more about private plans here - including a step-by-step guide on how to apply.

Rest assured, Private Plan benefits must be equal to or more generous than the State Fund.

Real-World Scenarios for New Jersey
Temporary Disability Insurance

So, let’s take a look at two representative employers and how the contribution rates may work for
both the employer and employee in New Jersey.**

Company 1
30 covered employees**

The company is quoted a combined rate of 0.81% for New Jersey Temporary Disability Insurance (TDI) coverage (allocated 0.14% for Employee Portion; 0.67% for Employer Portion). For comparison purposes, the employee portion as set by the State for 2022 is 0.14%.

The employer can’t collect more than the employee maximum set by the State. In this example, the employer would be required to fund the portion of the rate that exceeds the employee contribution rate, or 0.67% - plus any portion of the employee contributions they wish to fund, since employer may choose to pick up all or a portion of the employee’s share of contributions.

Company 2
250 covered employees**

The company is quoted a combined rate of 0.12% for New Jersey Temporary Disability Insurance (TDI) coverage (allocated 0.12% for Employee Portion; 0.0% for Employer Portion). For comparison purposes, the employee portion as set by the State for 2022 is 0.14%.

In this case, since the quoted rate for TDI coverage is below the 2022 maximum employee contribution rate of 0.14%, the employer may choose to deduct the full 0.12% from the employee to cover the total cost of coverage. The employer may also choose to pick up all or a portion of the employee’s share, at its discretion. So, in this situation where the total rate is less than the maximum employee contribution rate, an employer cannot collect any amount in excess of the total rate which in this example is 0.12%.

Note: If the employer decides to change the plan’s contribution from its original filing with the State, then they would be required to file an updated DP-1 application and await State approval before implementing any change.

**These examples are for illustrative purposes only and are not intended to be a guarantee of coverage or rate.

Learn More About NJ Temporary Disability Insurance

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Premium & Contributions

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*The ShelterPoint family of companies operates under the “ShelterPoint” name strictly as a marketing name, and no legal significance is expressed or implied. The ShelterPoint family of companies consists of ShelterPoint Life Insurance Company, a NY-domiciled carrier, and its wholly-owned subsidiary ShelterPoint Insurance Company, a FL-domiciled carrier, depending on the state. ShelterPoint is a registered service mark.

Underwritten by: ShelterPoint Life Insurance Company (principal office in Garden City, NY) in: NJ (form# TDB-P-NJ)

This page is for informational purposes only and is not intended to provide legal counsel. Please consult with an appropriate professional for legal and compliance advice.

The information on this page is not intended as an offer of coverage (“Invitation to Contract”). It is for illustrative purposes only, providing a general overview of the services descried. It is not a contract. Available in NJ only. The Temporary Disability Benefits (TDB) Law (Temporary Disability Benefits law (P.L.1948, c.110 (C:43-21-25 et seq.) 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.

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