Workers’ Compensation or Disability Insurance in NJ?
If you have an employee who has been injured and filed a claim, you might be wondering if they’ve done it correctly. HR managers and benefits supervisors, of course, understand the differences between workers’ compensation and short-term disability insurance, or TDB (temporary disability benefits) as we call them in New Jersey. But many small business owners wear several hats and may not be up-to-date in areas outside their core competency.
After all, business owners started their business because they were passionate about some element of their industry. They probably didn’t sign up to be accountants, benefits managers, marketers, salespeople, and chief bottle washers. But as a New Jersey small business owner, those are exactly the roles you might fill – and that’s just the start.
However, it’s important to understand at least a little bit about every aspect of managing a business – and that includes statutory employee benefits. So, if an employee is wondering if they qualify for worker’s compensation or disability insurance, you’ll need to understand the basics to guide them in the right direction.
Workers’ Compensation: For On-The-Job Illnesses and Injuries
Workers’ compensation is a federally mandated benefit that pays workers if they are hurt or disabled on the job or become ill as a result of work conditions. Only work-related illnesses and injuries are covered.
Workers’ compensation not only provides partial salary replacement for ill or injured employees. It also may cover:
- Medical care for treatment
- Ongoing care (such as a home health aide or physical therapy)
- Death benefits if they pass away as a result of the incident
- Disability benefits for full or partial disability
The amount of benefits vary based on the employee’s salary and the workers’ compensation insurance policy the business carries. Employers are required to pay workers’ comp insurance and cannot deduct premiums from employee paychecks.
NJ TDB Coverage for Other Illnesses or Injuries
While every state requires businesses to carry workers’ compensation insurance if they have full- or part-time or even seasonal employees, only a handful of states mandate short-term disability insurance. In New Jersey, employers are required to carry temporary disability insurance (TDB). The employer and employee split the costs of this statutory coverage.
TDB covers any illness or injury that is not work-related. The State of New Jersey offers TDB policies, but employers also have the option to privatize their TDB coverage for cost-savings and better, more personalized service.
By law, private plans must offer the same – or better – coverage at the same, or lower, rates than the state plan provides.
Workers’ Compensation or Disability Insurance in NJ: Which Should Your Employee File?
Your New Jersey insurance broker may be able to help you determine the best course of action for an employee who needs to miss work and file a claim for illness or injury. You are required to carry both benefits, but incorrect or misrepresented claims can lead to dissatisfied employees, lawsuits, and increased rates.
It’s usually easy to tell if an employee was injured on the job or afflicted with a work-related illness. If there is a dispute, it’s important to speak promptly with the claims department of your New Jersey insurance broker to determine the best course of action.
Understanding the differences between workers’ compensation and disability insurance in New Jersey is an important first step to avoiding confusion, or misfiled or delayed claims.