In New Jersey, short-term disability insurance is called temporary disability insurance (TDI). An individual may be eligible for temporary disability insurance benefits if they have a physical or mental illness or an injury that prevents them from working, and the illness or injury was not caused by their work.
The list of covered conditions includes pregnancy and childbirth recovery. The individual may also be eligible if they are at high risk for COVID-19 due to underlying health conditions.
What New Jersey Temporary Disability Insurance Provides
Temporary disability insurance provides cash benefits. The individual’s healthcare provider certifies how long the person needs to recover from their condition – the maximum allotment is 26 weeks. If the healthcare provider certifies that the person cannot work because they are at high risk for COVID-19 due to an underlying health condition, the person may be eligible for temporary disability benefits.
Most New Jersey employers are required to have temporary disability insurance for their employees. Employers are allowed to choose an insurance plan offered by the state or by a private insurance company.
A worker should ask their employer whether they have a private plan or a state plan. If the worker is covered by the state plan, they should apply for TDI benefits online with the New Jersey Department of Labor and Workforce Development. If the worker is covered by a private insurer, their employer will tell them how to file a claim.
Get TDI From the State
The first step to getting TDI from the state of New Jersey is to create an account for the New Jersey Department of Labor and Workforce Development’s (department) online system. The person should then start an application for TDI.
After they complete their portion of the application, they will be prompted to print instructions with a unique online form ID number. The applicant should give this document to their health care provider to complete its portion online.
The applicant will then receive a debit card in the mail. The debit card will arrive before the application is processed, which means the card will not have funds on it at first.
Application Processing Time
Applications are processed in the order they are received. An online application will be processed more quickly than one submitted by mail or fax. If the department approves the application for temporary disability insurance benefits, it will load funds onto the person’s debit card after two business days. A person can check the status of their disability claim online.
Eligibility Requirements for TDI Benefits
A New Jersey worker must have paid into the program through their employment in order to qualify. The worker must also have met minimum gross earnings requirements. TDI is available to most New Jersey workers, with the exceptions of:
- Federal government employees.
- Out-of-state employees.
- Employees of faith-based organizations, such as churches.
- Workers that are not technically employees, such as properly classified independent contractors.
Also, TDI is optional for local government agencies, including school districts. An employer covered for TDI is required to set up payroll contributions for its employees.
If a person believes they are covered under the program, but payroll contributions have not been made, the state encourages them to apply as there may have been an error. A person who has become unemployed recently and has a need for TDI may still be eligible for benefits and should apply.
Earnings to Qualify for TDI
The department first calculates the individual’s average weekly wage. This is the base year earnings divided by the number of base weeks. The base year is defined by the first four quarters of the five completed quarters prior to the week that the person’s disability began.
In 2021, a base week was a week in which the worker earned $220 or more. In 2022, a base week was one in which the worker earned $240 or more.
To qualify for TDI in 2021, a worker must have worked 20 weeks, earning at least $220 per week. Alternatively, the worker can have earned $11,000 total in the first four quarters. To qualify for TDI in 2022, a worker must have worked 20 weeks earning at least $240 per week. Alternatively, the worker can have earned $12,000 in the first four quarters.
Weekly Benefit Amounts
The weekly benefit rate is 85 percent of the claimant’s average weekly wage, up to the maximum weekly benefit rate set for that calendar year. In 2021, the maximum weekly benefit amount was $903 per week. In 2022, the maximum weekly benefit amount is $993 per week.
Alternate Base Year Periods
For workers who do not qualify with a standard base year, the department will review the worker’s gross earnings in two alternate base-year periods to see if they can qualify. In 2022, a worker may qualify for benefits if they worked at least 20 base weeks or earned at least $12,000 in any one-year period over the last 18 months. The worker cannot pick and choose which time periods they want to use to qualify.
Keeping Employers Informed
The temporary disability benefits law does not state how far in advance an employee must notify their employer for medical leave. This is because disabilities are often unforeseeable circumstances. To the extent possible, an employee should talk with their employer about their need for medical leave, how the employer can prepare for their absence and what adjustments the employer can make to work schedules.
The employer can share information on job protection and if the employee qualifies through the federal Family and Medical Leave Act (FMLA).
Ongoing Proof of Disability
After a claimant starts receiving TDI benefits, the department will ask them to provide proof of their continuing disability to keep receiving benefits.
It will mail instructions before the person’s last authorized benefit payment on how to submit information in a letter called the Request to Claimant for Continued Claim Information (P-30). The person can extend or end their claim through their online account with the department.
The online system will ask the claimant to print a page with their unique online form ID number and instructions for their medical provider to file the continuing medical certification online. Once it receives this information, the department will review the request to extend the person’s claim.
Effect of Paid Time Off
An employer may be able to require an employee to take paid time off (PTO) before receiving temporary disability benefits. It depends on how the employer meets the requirements of the New Jersey earned sick leave law. The law requires employers to provide full-time, part-time and temporary employees with up to 40 hours of paid sick time per year to care for themselves or a loved one.
Employers who separate New Jersey earned sick leave from their PTO policy can require employees to take PTO before claiming TDI benefits. Employers cannot require employees to take time accrued under the New Jersey earned sick leave law.
PTO is not sick leave, and New Jersey requires employers to give employees up to 40 hours of earned sick leave per year. Some employers use their PTO policy to follow the earned sick leave law. An employer who does this may not require their employees to utilize any of their PTO prior to getting temporary disability benefits.
Earned Sick Leave
An employee should ask their employer or human resources professional to determine how the employer follows the New Jersey earned sick leave law. If an employer violates the earned sick leave law, the employee can file a complaint with the wage and hour division at the New Jersey Department of Labor. The employee is still eligible to file for temporary disability benefits.
Temporary Disability Benefits Are Taxable
Temporary disability benefits are taxable income for federal income tax and FICA (Social Security). The person receiving TDI benefits must request federal income tax to be withheld from their benefit payment each week if they want this amount withheld.
Alternatively, they can submit IRS form W-4S to the New Jersey Department of Labor and Workforce Development for state plan claims. The worker can submit form W-4S to their employer for private plan claims.
FICA and Medicare taxes are automatically deducted from state plan benefit payments. Garnishments and refunds owed from a previous disability or family leave claim will be withheld from benefit payments. Benefits are federally taxable in the year that payments are issued.
Reporting Temporary Disability Benefits
This may not always match up with when a person’s leave occurred. Temporary disability benefits should be reported by the employer on the worker’s W-2. If the amounts are not there, the person should contact their employer directly to correct the error.
Medical Certifications From Healthcare Providers
Once a worker provides a healthcare provider with the online form ID, the healthcare provider is expected to submit the medical section within 14 days of the request. If they do not do so, the processing of the claim may be delayed significantly.
An expectant mother may be eligible for TDI benefits while they are pregnant and after they deliver. In most cases, a pregnancy disability period starts four weeks before the expected delivery date and ends six weeks after the birth, or eight weeks after a cesarean section. The duration of the eligibility period can vary depending on the medical evaluation of the mother’s condition.
Complications in Pregnancy
For pregnancy complications that arise more than four weeks before the estimated due date, the healthcare provider must explain the disabling condition experienced by the mother, such as gestational diabetes. Simply indicating a general need for bed rest is not enough.
Once the patient delivers, the healthcare provider is required to complete a supplemental medical form stating the date of delivery, whether the delivery was a C-section and the expected date of full recovery.
The healthcare provider must note any applicable complications that will extend the patient’s recovery period beyond the typical six to eight weeks after birth or past the estimate indicated on the original claim form.
Certification of Disability for Some Complications
If the patient is experiencing a complication that is not within the provider’s scope of practice, such as postpartum depression, the provider should refer them to an approved provider in that area. The patient should get a certification of disability from that specialist. A healthcare provider treating a patient for a non-pregnancy-related health condition must periodically complete a supplemental medical form.
The purpose of this is to show that the person remains in the provider’s care and is unable to work. The provider must also submit this form when the person recovers and is deemed able to work again. A provider can certify only for conditions that are within the scope of its practice.
Family Leave Insurance
Family leave insurance (FLI) provides to New Jersey workers cash benefits so they can bond with a newborn, newly adopted or newly placed foster child. FLI also provides workers such benefits to provide care for a seriously ill or injured loved one.
Most New Jersey workers who take family leave are covered under the state’s program. Some employers provide family leave insurance through a private carrier. An employee should ask their employer whether they have FLI through a state or a private plan.
A worker who has become disabled due to an injury or illness related to their job should contact the New Jersey Division of Workers’ Compensation. If the disability is work-related, and the employer’s workers' compensation carrier denies the person benefits or stops benefit payments, the worker should file an application with the state. To be eligible for workers' comp, the worker must:
- Meet the requirements of the temporary disability benefits law.
- File a formal claim petition with the Division of Workers’ Compensation.
- Agree to reimburse the Division of Temporary Disability Insurance if the worker is awarded workers’ comp benefits.
Typically, an individual consults with an attorney when filing a formal claim petition.
- New Jersey Department of Labor & Workforce Development: Temporary Disability Insurance
- New Jersey Department of Labor and Workforce Development: How Alternate Base Years Are Calculated
- New Jersey Department of Labor and Workforce Development: Family Leave Insurance
- New Jersey Department of Labor and Workforce Development: Information for Healthcare Providers
Jessica Zimmer is a journalist and attorney based in northern California. She has practiced in a wide variety of fields, including criminal defense, property law, immigration, employment law, and family law.