Attention:   New Jersey Employers
New Jersey Temporary Disability Benefits (TDB) Change 2009

 

Employers must provide NJ TDB to all employees working in the State of New Jersey .  These benefits can be written by the State of New Jersey or written through a private insurance company.  The NIA Group, LLC is proud to be one of the largest NJ TDB brokers in the State of Jersey .

Each year New Jersey indexes the benefit and taxable wage base.  The maximum benefit is increasing from $524 to $546 per week effective 1/1/2009 .  The maximum taxable wage will also increase from $27,700 to $28,900 which subsequently increases the annual maximum employee contribution from $138.40 to $144.50.  Employers are responsible for the cost above the employee contribution.

If you are offering a Short Term Disability program that mirrors the State of New Jersey benefit it is time to forward a letter to your private insurer raising the benefit for 2009. 

Family Leave Insurance (FLI) Overview

 

As all of you are aware, Governor Jon Corzine signed legislation on May 2, 2008 that will entitle eligible employees in New Jersey to take up to six weeks of paid leave during a 12 month period for bonding after the birth or adoption of a child, or to care for a seriously ill relative.  Here are some of the law’s highlights: 

  •       If an employer’s leave plan is governed by the State, then the employees receive payments from the State Fund to replace 66 2/3 percent of their weekly base salary, up to a maximum of $524 a week.  Benefit waiting period is seven consecutive days.  Employers may require an employee to take up to two weeks of unused vacation or paid sick days before receiving the paid family leave; one week of which would be used to cover the seven-day waiting period.

  •       Leave benefits provided under the New Jersey Paid Family Leave run concurrently (not consecutively) with FMLA.
     

  •       Applies to all private and governmental employers subject to the “Unemployment Compensation Law,” (R.S.43:21-1 et seq.), including local governmental employees who choose to opt out of the regular TDB.

 

  •       Provides an assessment on employees beginning January 1, 2009 , to fund the FLI program.  Provides the payment of FLI benefits beginning July 1, 2009 .
  •       Raises revenue to pay the FLI benefits through an assessment on the worker’s wages beginning January 1, 2009 . The worker FLI rate for the calendar year of 2009 is 0.09% or $26.01. The worker FLI rate for calendar year 2010, and subsequent calendar years, will be 0.12 % or $24.68. The worker FLI rate will be multiplied against the taxable wages subject to the State FLI plan, $28,900 in 2009.
  •       Provides small businesses, (50 or fewer employees), with the option to replace employees receiving FLI benefits. Small businesses do not have to hold jobs open and provisions in the law allow small businesses, to fill a worker’s position with a permanent replacement without running the risk of being sued.

  •       Requires the employee to give at least 30 days prior notice, except when unforeseeable circumstances prevent prior notice, for care of a child after birth or adoption.  If FLI leave is for the care for sick family members, the employee is required to schedule, when possible, the leave in a manner to minimize disruption of employer operations, and give, if possible 15 days prior notice for leave which is intermittent.

  •       Increases the penalties for misrepresentations, fraud and other violations regarding both the existing TDB program and the FLI program to $250 per statement or non-disclosure.

  •        Increases the penalties for other willful violations of the TDB law or the bills to $500 and additional penalties for violations with intent to defraud the program to not more than $1,000.

  •       Provides that employers would have the option of using the State-operated plan or a private plan through self insurance or an insurance policy, so long as the employees are not charged more, the benefits are not lower and eligibility is not more restrictive than under the State plan.

  •       Provides that private plans may cover TDB benefits, FLI benefits, both or neither.

  •        Requires no changes in existing private plans.

  •       Pending any changes, it is our recommendation that our clients utilize the state program to fund this benefit until such time that the program’s costs become evident.  In our opinion that may take several years. 

 

NIA will keep you apprised of any developments as they occur. 

As the Broker and Claims Payor for over hundreds of private plans in  New Jersey , we have the expertise to help you weigh your options.

 

If you have questions on the legislation or to discuss your NJ TDB Coverage, please contact your NIA Employee Benefits Specialist or:

Denise Angleman
Senior Vice President, Employee Benefits
201.845.6600, Ext. 1259