With a new governor in Trenton, there are a few bills being proposed that significantly impact NJ Temporary Disability Benefits (TDB) and NJ Family Leave Insurance (FLI).  Please see the below bills as well as our comments. 

Assembly Bill No. 3975 – Still in Assembly being reviewed but was referred to Assembly Budget Committee.
Overview:
  • Bill expands maximum total benefits payable to any eligible individual for periods of family temporary disability, FLI and for periods covered under Temporary Disability Insurance related to pregnancy and recovery from childbirth.
  • Maximum duration of FLI benefits to increase from 6 weeks to 12 weeks; for intermittent leaves it will increase from 42 days to 85 days.
  • FLI and TDI weekly benefits will increase from 2/3 of claimant’s average weekly wage to 90% of that wage. The weekly maximum amount will increase from 53% of the State average weekly wage (SAWW) for all workers (currently $637) to 100% of the SAWW.  The bill advises that the costs associated with the benefit increases will be supplemented by increases in the workers contributions, without increases in the employer contribution rates.
  • Bill expands the family members for whom individuals covered under FLI may receive benefits to include siblings, grandparents, grandchildren, parents-in-law and others related by or relationship equivalent to a family relationship and expands the Family Leave Act (FLA and NJ SAFE Act to include the same groups.
  • Bill also requires goals for timely determination and payment of TDI and FLI benefits; 40% within seven days, 75% within 14 days, 85% within 21 days, and 90% within 28 days.
  • Proposed Effective Date is January 1, 2019.
Comments/Impact:
  • This would result in the biggest change to NJ TDB perhaps in the existence of the policy.  Increasing the benefit percentage from 66.67% to 90% and the maximum benefit from $637 to $1,204 for maternity claims obviously gives claimants a much higher benefit.  However, this comes with a cost.  The state estimates this would increase state fund claims by $200M annually (+40%).  As a result, the employee contribution is sure to increase to fund these claims. 
  • On the private plan side, this will most likely force some carriers out of the TDB market (like PFL did in New York).  Probably carriers with small TDB block that didn’t want to be in the business anyway.
  • The bill will most likely get amended before passing as it’s somewhat discriminatory in nature.  Why should a maternity claim be treated differently than a non-maternity claim?

Assembly Bill No. 2762 – Passed by both the Assembly and Senate 6/21/18.
Overview:
  • Bill proposes that the currently law be amended such that when a covered individual that applies for TDB benefits resulting from pregnancy or birth of child, the plan administering the benefits must automatically process an application for the that individual to its paid family leave benefit program, unless the individual affirmatively opts out of the program.
  • In case of pregnancy, worker is entitled to 4 weeks prior to birth and 6 weeks after.  Committee deleted previous “up to” language
  • Provisions of the bill will apply to the State plan and a private plan which holds both the disability and family leave insurance
  • Private plans that offer the temporary disability benefits only will be required to provide its claimants written notice of the application process for family leave concurrently with issuing its written approval of the disability benefits.
  • Proposed Effective date of the bill will be 180 days after the date enactment.
Comments/Impact:
  • Not nearly as impactful as the previous bill.  This is more of a procedural change.  Private plans would require carriers to provide TDB Claimants written notice of the application process for family leave benefits through the State of NJ when issuing approval of TDB benefits for pregnancy claims.  Many carriers do this already.
  • Pregnancy claims also get 4 weeks of benefits prior to birth instead of “up to” 4 weeks.