INSURANCE UPDATAES
2021 UPDATES TO
New Jersey Temporary Disability Insurance And Whether To Move To A Private Carrier
The 2021 New Jersey
Temporary Disability Insurance ( TDI ) employee / employer contribution rates and taxable wage base were announced by New Jersey ’ s Department of Labor and Workforce Development . A comparison of 2020 vs . 2021 is provided in the chart below . The significant increase for the employee is likely based on the increased benefits in 2020 and 2021 , an increase in filed claims and utilization because of the improved benefits , the impact of the COVID and other factors .
If your statutory disability program is still administered by the State , the increase in the Employee Contribution Rate from $ 0.26 to $ 0.47 will not have an impact on the company ’ s cost because the Employer Rate is separate from the Employee Rate . Of course , the State may have increased your Employer Rate . On the other hand , if your program is administered by a private insurance carrier , the Employer Rate that you pay the carrier includes the employee cost so this increase for the employee may actually serve as an offset and reduce the company ’ s cost . Depending on the carrier ’ s renewal , it may be possible that some or all of a proposed increase in
Benefit Provision Updates
2021
cost could potentially be absorbed by the higher employee contribution .
If your program is administered by the State , there are many reasons to consider transitioning the administration of the program from the State to one of many private carriers
for a January 1 , 2021 effective date ( if you miss the January 1st effective date , the plan can also be moved on any calendar quarter , so you can also make the transition on April 1 , 2021 ):
• Offset the increased employee cost in 2021
• Lower rates
• Additional savings are available because there is no payment of the annual State Assessment Fee
• Employees receive the same mandated benefits when administered by a private carrier
• There are several carriers from which to choose , so you aren ’ t bound to the State and their cost increases
January 1 to June 30
2020
July 1 to December 31
Benefit Percentage 85 % 67.67 % 85 % Maximum Weekly Benefit $ 903 $ 667 $ 881
Taxable Wage Base Annual Maximum
Employee Contribution Rate ( Per $ 100 of Taxable Wages )
Employee Maximum Annual Cost
$ 36,200 $ 138,200 $ 35,300 $ 134,900 Employer Employee Employer Employee $ 0.47 $ 0.26
Up to annual maximum
of $ 649.54
Up to annual maximum of $ 350.74
• Better customer service from a private carrier vs . the State
• Can combine with your Life and / or LTD program for bundling discounts and simplification of claims and billing administration
• Employee signature requirement when moving to a private carrier has been removed
Requesting proposals from insurance carriers is simple . All that is required is a current census including employee salaries , and the AC174 report ( aka Notice of Contribution Rates ) from the NJ Department of Labor ) for the last 3 years . Take advantage of one of the few cost savings initiatives that is a win / win for your company because it will have no negative impact on your employees . +
BY : BARRY E . FIELDS VICE PRESIDENT OF EMPLOYEE BENEFITS JGS INSURANCE
Barry Fields has over 30 years of employee benefits experience advising clients in a wide range of industries , professional and industrial , public and private , throughout the United States and worldwide .
Barry specializes in providing fullservice benefits consulting to clients including program design , compliance , plan funding , underwriting , wellness programs , employee communications , benefits administration , employee advocacy and the use of effective strategies in benefits management .
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