Private Plan under the New Jersey Temporary Disability Benefits Law
The New Jersey Temporary Disability Benefits Law permits employers to cover their workers under private plans that are approved and monitored by the Division of Temporary Disability Insurance, Private Plan Compliance Section. Covered employers with approved private plans are relieved of employer contributions to the State Disability Benefits Fund, as are their workers, as long as coverage is continued under the plan.

As a subject employer, you may establish a private plan for the payment of disability benefits in place of the benefits payable under the State Plan. Such private plans may be contracts of insurance issued by authorized carriers, by employers as self-insurers, or by agreements between unions and employers.

All private plans must be approved by Private Plan Compliance Section. Employers opting for private plan coverage must submit an application and complete description of the plan for review. Some of the requirements are:

(1) Eligibility requirements for benefits may be no more restrictive than the State Plan’s.

(2) Benefits must be at least equal to State Plan benefits, both as to weekly amount and total weeks compensable.

(3) Workers’ contribution must not exceed those required under the State Plan.

(4) If employees are required to contribute to the cost of a private plan, a majority of the workers must  agree to that arrangement by written election before the plan can be approved.

(5) Some employers who wish to self-insure their private plan may be required to provide security to guarantee the payment of benefits.

You may terminate a private plan you may do so at any time. However, you must first notify Private Plan Compliance Section in writing of your intention at least 30 days before the effective date of the termination.

Workers may terminate a private plan under certain conditions. Also, an insurer may terminate a private plan with 60 days’ written notice to Private Plan Compliance Section.

Private Plan Compliance Section may withdraw its approval of a private plan because of the termination of the insurance coverage or for other good cause.

When a private plan is terminated, coverage under the State Plan is automatic effective the day following termination. No application forms are required of the employer or the workers to begin State Plan coverage. In such cases, liability for contributions to the State Plan is also effective immediately. It is recommended that employers changing from private plan to State Plan coverage obtain an adequate supply of State Plan claim forms (DS-1) from the Division of Temporary Disability Insurance. To apply for approval or termination of a private plan, write to:

Division of Temporary Disability Insurance           Telephone: (609) 292-2720
Private Plan Compliance Section                          FAX: (609) 292-2537
Plan Approval Unit                                               E-mail: Raymond.Russell@dol.nj.gov
PO Box 957                                                         Web site: http://www.nj.gov/labor/tdi/tdiindex.html
Trenton, New Jersey 08625-0957