Pub. 14 2015-2016 Issue 1

N E W J E R S E Y C O A L I T I O N O F A U T O M O T I V E R E T A I L E R S 11 new jersey auto retailer W W W . N J C A R . O R G In order to be considered a covered employee you must have earned at least $8,300 during a “base year” period. The “base year” is defined as the “52 weeks preceding the week in which your disability began” according to the New Jersey Depart- ment of Labor. It’s also important to note that an employee working in New Jersey, but living in another state, is eligible for NJ TDB. For example, an employee living in Pennsylvania, but working for a covered New Jersey employer is eligible for NJ TDB if they meet the wage requirements. Some New Jersey employers, like non-profits, public entities and religious organizations are not mandated to offer NJ TDB. Employer and Employee Cost The State of New Jersey determines both the employer and employee cost. In 2014 the employee cost was .38% for the first $31,500 of taxable wages or $119.70. In 2015 the State reduced the employee cost to .25% for the first $32,000 of taxable wages or $80.00. The employer cost is also based on overall employee taxable wage base. The employer cost ranges from .10% to .75% or $32.00 to $240.00 per employee. The employer cost is based on plan experience and thus could increase or decrease. The employer rate is subject to change every July 1. Even if the State does not change the employee or employer rate, the taxable wage base changes every year, which impacts overall out-of-pocket expense for the employee and overall premium for the employer. The State also issues an Annual Employer Assessment Fee which varies based on other factors that are managed and decided by the State. The Private Insurance Market The State of New Jersey allows New Jersey employers to purchase NJ TDB from a private insurance carrier, as long as they are ap- proved to offer NJ TDB and follow all aspects of the NJ TDB as it pertains to employee cost, eligibility, plan design and claim pay- ment. NJ CAR offers a plan that can save dealer time and money. Private carriers can differentiate themselves from the State- run NJ TDB program in several ways. One clear distinction is cost. A private carrier can also often provide claim payments to employees more quickly. The State averages approximately 14 days for claim payments. Some carriers offer payment in 3 to 5 days after a complete claim form is received by their Claims Department. Private carriers also offer electronic reporting capabilities that allow the employer to view daily claim status at the weekly and monthly level. The State of New Jersey offers claim activity reports on an annual basis. If your business is considering offering other forms of disability insurance, like long-term dis- ability insurance, some carri- ers offer easy claim transition from NJ TDB to long-term disability, with no additional paperwork. Changing fromthe State ofNew Jersey to a private plan, such as the plan offered through NJ CAR, requires specific applications that include signature authorization from amajorityof covered employees.Many carriers have support staff that can assist the employer in completing the necessary paperwork. The most common effective date to make the change is January 1 but the State allows employers the flexibility to change at the beginning of each quarter. (January 1st, April 1st, July 1st or October 1st). James R. Nelligan is a Group Benefits Disability Specialist and President of James R. Nelligan & Associates LLC. For more information about Temporary Disability Benefit plans, he can be reached at 732.842.4563 or via email at james@nelliganassociates.com. If your business is considering offering other forms of disability insurance, like long-term disability insurance, some carriers offer easy claim transition from NJ TDB to long-term disability, with no additional paperwork. Specializing in Franchise Automobile Dealership Brokerage &Valuations Serving New Jersey Dealers Since 1989 Confidentiality Assured D.T. MURPHY & CO. 973 809-9311 • dan@dtmurphy.com • www.dtmurphy.com Dan Murphy