The 2021 New Jersey Temporary Disability Insurance (TDI) employee/employer contribution rates and taxable wage base were announced by NJ’s Department of Labor and Workforce Development. A comparison of 2020 vs. 2021 is provided in the chart below. The significant increase for the employee is likely based on the increased benefits in 2020 and 2021, an increase in filed claims and utilization because of the improved benefits, the impact of the COVID, and other factors.
If your statutory disability program is still administered by the State, this will not have an impact on the company’s cost because the Employer Rate is separate from the Employee Rate but of course the State may have increased your Employer Rate.
On the other hand if your program is administered by a private insurance carrier, the Employer Rate that you pay the carrier INCLUDES the employee cost so this increase for the employee will actually serve as an offset and reduce the company’s cost. Depending on the carriers renewal, it may be possible that some or all of a proposed increase in cost could potentially be absorbed by the higher employee contribution.
Along with improved customer service and not having to pay the annual State Assessment Fee, the offset of the increased employee cost in 2021 is another advantage of transitioning the administration of the program from the State to a private carrier and now is a good time to consider that change for a January 1, 2021 effective date.
By the way, just a reminder that the Medicare Part D creditable or non-creditable coverage notice must be provided no later than October 14 to active, retired, disabled, and COBRA beneficiaries and dependents. The Part D Annual Election Period runs from October 15 through December 7, 2020.
