NewJerseyTemporaryDisabilityBenefitsLaw–TDB
FrequentlyAskedQuestions
GeneralQuestions-TDB
WhatisTDB?
TDBistheNewJerseyTemporaryDisabilityBenefitsLaw.Thisstate-mandatedShort
TermDisabilityplanprovidesabenefitof662/3%ofaverageweeklysalarytoa
maximumof$633perweekfor2017toeligibleNJemployeeswhoareunabletowork
duetoanon-occupationalillnessorinjury.Evenemployerswhoarelocatedoutsideof
NJbuthaveNJemployeesmustprovideTDBinsurancetotheirNJworkers.NewJersey
allowsemployerstoprivatizetheirTDBcoverage,soemployerscanopttohave
coveragethroughtheStateplanorwithaprivateinsurancecarrier.
WhattypesofGroupsarecoveredunderTDB?
Ingeneral,allemployergroupswhoarecoveredunderUnemploymentmustalsooffer
TDBtoitsemployees.Anexceptiontothisruleiscertaingovernmententities.Inmost
cases,employerswhohaveatleastoneemployeeandpaywagesof$1,000ormoreper
calendaryeararesubjecttoTDB.
WhoiseligibleforTDBbenefits?
InordertobeeligibleforTDBbenefits,anemployeemusthavehadatleast20base
weeksofNJcoveredemployment,ORearnedatleast$8,400incoveredemployment
duringthe52weekperiodimmediatelyprecedingtheweekinwhichtheDisability
began.
Abaseweekisacalendarweekinthebaseyearduringwhichtheemployeeearned
$168ormoreincoveredearnings(thisequatesto20timestheStateminimumwage).
DoemployeeshavetoliveinNewJerseytoreceiveTDB?
No,whereemployeeslivehasnobearingonwhethertheycanreceiveTDBbenefits.
EmployeesmustworkforaNewJerseycoveredemployerinordertobeeligibleforTDB
benefits.
WhopaysforNewJerseyTDB?
Generally,theplanisfundedbybothemployerandemployeecontributions.
Employeescontributethefirst0.24%uptothetaxablewagebase.For2017,the
maximumtaxablewagebaseis$33,500,makingthemaximumemployeecontribution
forthisyear$80.40.
Employerscontributepremiuminexcessof0.24%.ForplansinsuredthroughtheState,
theemployerraterangesfrom0.10%to0.75%.
Anemployerhastheoptiontowaiveemployeecontributionswheninsuringthrougha
privateplan.
PrivatePlanQuestions
WhataretheRulesforestablishingaPrivatePlan?
EmployersautomaticallyparticipateintheStateTDBplan,unlesstheyelectcoverage
throughanapprovedprivateplan.TheStatemustapproveallsuchplans.Onlythose
carriersthatareonfilewiththeStateofNewJerseyasanapprovedinsurancecarrier
forNJTDBwillbeaccepted.
Theprivateplancannotbemorerestrictive,offerlowerbenefits,orrequiremore
employeecontributionsthantheStateplan.ATDBplancanonlymovefromtheState
oncalendarquarters:January1st,April1st,July1st,orOctober1st.
TheStatemustbenotifiedofthepotentialmovepriortotheeffectivedateofthemove.
TheemployermustcompletetheState’sformAC-174.Wewillprovideassistancewith
thecompletionofthisform.Ifemployeecontributionsaretobecontinued,anelection
mustbeheld.50%plusoneemployeemustagreetotheprivateplanonaconsent
form.WewillmailtheoriginalconsentformandAC-174totheStateofNJonthe
employer’sbehalf.Inaddition,wewillmailacopyofthepreparedTDBpolicyand
NoticeofCompliancetoboththeStateandtheemployer.Theemployermustpostthe
Noticeinaconspicuouslocationattheworksite.TheStatewillreviewalldocuments
andnotifytheemployerandusofapproval.Onceapproved,theStatewillissuea
CertificateofApprovalandassignaprivateplannumber.Intheunlikelyeventthatthe
Statedoesnotapprovetheplan,wewillworkwiththeemployertoresubmitthe
documentsforapproval.
CananemployeeinsuresomeemployeesthroughaPrivatePlanandothersthrough
theState?
Yes,providedthatthecriteriafordeterminingthesplitarenotdiscriminatory.For
example,anemployercanelecttoinsureauniongroupthroughaprivateplanandkeep
thenon-unionemployeeswiththeState.Theycannot,however,electtocover
employeeslessthan55yearsoldprivatelyand55orolderthroughtheStateplan.
WhatifaGroupisalreadyinsuredwithaPrivateCarrier?
Theprocesstomovefromoneprivatecarriertoanotherissimilar.However,no
electionisnecessaryprovidedtheplanofbenefitsisremainingthesame.
WhatifIchangemymindandwanttogobacktotheStatePlan?
Anyemployermayterminatetheirinsuredprivateplanbyproviding30days’noticeto
theStateofNewJersey.Re-enrollmentintheStateplanisautomaticandnonewforms
willneedtobecompleted.
Questions
Whatinsurancecompaniesdoweuse?
Althoughweuseawidevarietyofstatutorydisabilityinsurancecarriers,thereisonlya
handfulthatwefeelarespecializinginthislineofcoverage.Ourfirmwillselectthebest
companyinregardtofinancialratings,guarantees,pricingandcustomerservice
feedback.
Westrivetomakesurethatourclientshaveamutuallybeneficialrelationshipwiththeir
disabilityinsurancecarrier.
WhataretheAdvantagesofselectingaprivateinsurerformyTDBbusiness?
PrivateinsurersofferseveralkeyadvantagesovertheStateplan:
Competitiverates
Areputationforclaimsexcellence,withadedicatedandhighlyprofessionalstaff
whoisfocusedontimelyandaccurateclaimpayments
PaysTDB-relatedassessmentchargesperemployeeofupto$10.80
Areeasytodobusinesswith,guidingyouthroughtheTDBprocesseverystepof
theway
Planenhancements,suchashighermaximumbenefits,longerdurationsor
shortereliminationperiodscanbeconsidered
Superiorcustomerservice
HowdoIrequestaQuote?
WerequirethatourclientsfilloutanAC.174.1requestform.Thisformallowsustopull
ourclientslastfouryearsofAC.174.1reportsfromtheNJDepartmentofLabor.These
formsarecrucialtotheinsurancecarriersforunderwritingpurposes.
ThemostrecentAC-174.1isrequiredtoissueaquote.Themostrecentformiscurrently
forfiscalperiod7/16-6/17.
ClaimsQuestions
IsthereatimelimitforfilingaDisabilityclaim?
Yes,youhave30daysfromthefirstdayofDisabilityinwhichtofileyourclaim.If
receivedafter30daysyoumustshowgoodcauseastowhytheclaimwasnotfiledon
time.
CanIhavemorethanoneDisabilityclaimduringtheyear?
Yes,youcanhavemorethanoneclaimduringtheyear.
CanIfilemyDisabilityclaiminadvance?
No.Evenintheeventofascheduledsurgery,youcannotfileyourclaimuntilyou
actuallystopworking.
AreAlcoholismandAlcoholism-relatedDisabilitiescoveredunderTDB?
Yes,alcoholism-relatedDisabilitiesarepayableprovidedtheclaimantisunderthecare
ofalicensedphysicianandmeetsallothereligibilityrequirements.
AreDrug-relatedDisabilitiescoveredunderTDB?
Yes,aslongastheclaimantisnolongerusingillegaldrugsandisbeingtreatedfortheir
substanceabuse.
MayanemployeecollectTDBbenefitsifhe/shewasinjuredonthejob?
No,TDBcoversnon-occupationalillnessesorinjuriesonly.Pleaserefertoyour
Workers’Compensationcoveragetodeterminebenefiteligibilityunderthatprogram.
AreDisabilitybenefitstaxable?
ThetaxabilityofTDBbenefitsdependsontheemployer/employeecontribution
arrangement.Theportionofpremiumthatemployeescontributeisnon-taxable.For
example,ifemployeescontribute50%ofthepremium,thentheirbenefitis50%non-
taxable.
WhatifIstillhavequestions?
ContactNelliganAssociatesat908-310-3940oremail
[email protected]