There are five states that require an employer to maintain a Short-Term Disability policy. New York, New Jersey, California, Hawaii, and Rhode Island.
In New Jersey, most businesses have coverage through the state fund, however there are many reasons why it’s better to replace this coverage with a private carrier. In almost all cases, a business can save by making the change. Service is also a factor, as Disability Insurance (DI) payments are generally issued more quickly with a private carrier.
Additionally, if an employer also carries a Long-Term Disability policy, placing the Short-Term policy with the same carrier offers “Seamless Disability”, meaning, fewer headaches on the part of the insured.
On February 19,2019 NJ Bill A3975 was signed into law by Governor Murphy. This Bill revises the laws concerning Family Leave Insurance (FLI) and Temporary Disability Benefits (TDB) including, pregnancy leave, family disability leave, and domestic or sexual violence safety leave.
Additionally, the required election process regarding the privatization of Temporary Disability Insurance (TDI) has been modified, making the change to a private carrier much easier. In the past, signatures were required by employees to make changes. This new bill eliminates the signature requirement.
The new law also enhances the benefits for employees. Some of the top highlights are:
- Electronic filing of applications and forms will be accepted.
- FLI and other TDI benefit amount increases to 85% of the claimant’s average weekly wage to $859 (currently 67% to $650/week)
- FLI intermittent leave maximum duration increases from 6 weeks to 12 weeks (during any 12-month period).
- TDB partial disability for up to 8 weeks (currently no partial disability)
These changes and enhancements are sure to have an impact on employers, especially those looking to move into a private plan. An employer can improve benefits, offer added protection to employees and help save money.
Any employer looking to move into a private plan should keep in mind that it must be moved on the quarter for January, April, July, and October effective dates.
The state continues to be challenged with service, claim payments and long turn around times. At AEPG Wealth Strategies, we are helping more groups than ever benefit from a private carrier solution.
For more information on State Mandated Temporary Disability, or other group benefit related topics contact Noel Santiago at firstname.lastname@example.org or by phone at 908-821-9758.
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