NJ Temporary Disability Benefits (NJ TDB) can be a confusing benefit given the complex nature of the law.  At Nelligan Associates, we’ve pretty much seen it all – the good, the bad, and the ugly.  We will periodically be sending out information on the most frequently asked NJ TDB questions/topics we come across.  If you have any questions, please let us know.  Enjoy!

What is the average claims turnaround time in the STATE FUND vs. a PRIVATE PLAN?

Claims processing in the STATE FUND increased for the fifth consecutive year to an average of 4 weeks in 2015 (as reported by the NJ DOL Office of Research and Information).  Many of our clients have reported a higher average- 6 to 8 weeksIn fact, a common complaint we hear is that employees are back to work before receiving their first disability payment!

On the other hand, PRIVATE PLANS through insurance carriers consistently process claims much faster- publicly reported as 1 week or less.  We have observed an average of <4 days over the past 5 years with our top carrier partners.  There are many instances when the turnaround time is 1 business day!

I have attached a snippet of actual claims data from our client base for some perspective.

NJ STATE FUND

PRIVATE PLAN

Publicly Reported Average

  ❌             4 Weeks

  ✅           1 Week or Less

Client Reported Average

  ❌             6-8 Weeks

  ✅           1 Week of Less

Why can PRIVATE PLANS pay so much faster?

Insurance carriers have stricter time guidelines and requirements for claims processing.  They also have a vested interest in keeping their clients happy to hit customer service metrics- this starts with paying claims in a timely fashion.  Claims can also be emailed or called in, speeding up the process tremendously.  Carriers use the same claims processing protocols for TDB as Short Term Disability, Long Term Disability, Life Insurance, etc.  One of the biggest slowdowns with the STATE FUND is when information is missing- the claim pends upon receipt of this info with minimal follow up.  Insurance carriers proactively reach out to the employee, employer, or physician to track down info.  Furthermore, Nelligan Associates and the client’s insurance broker can intervene to help (not an option in the STATE FUND).

The State of New Jersey is overwhelmed by sheer volume- 90%+ of NJ employers are in the STATE FUND.  This equates to 217,018 employers and 2,651,326 workers!  Can you imagine paying claims for hundreds of thousands of clients?

Why does this matter to employers?

Speedy claims processing is invaluable to a person out on disability and not receiving a paycheck.  Our office fields many calls from disabled employees who are struggling to get paid benefits from the STATE FUND- some of the stories are heartbreaking.  This resonates well with companies that are focused on taking care of their employees.

Easier/faster claims also help employers by freeing up time that HR was spending calling the state trying to get answers related to pending claims.  Most employers also fax in the claim form which can be challenging to successfully get through given the volume of claims being submitted by others.  With a PRIVATE PLAN, there is a dedicated account management team ready to help.

Think about it this way- if one of your clients was with a carrier who was taking 4+ weeks to turnaround Short Term Disability claims, what would you do?  Probably find a solution with another reputable carrier.  Same concept with the STATE FUND vs. PRIVATE PLANS.

NJ TDB Turnaround Time