There are only five states that offer state disability programs for resident employees. And if you're in New Jersey, you're in one of them. Congratulations. But what if you don't know anything about it? Well, you're in luck.
Your independent insurance agent can help answer all your questions about New Jersey's disability program and guide you to the protection you need to put your worries to bed. Because no one wants to worry about insurance, they just want to know it's there when they need it.
That’s why an independent insurance agent is so handy.
What Is Disability Insurance?
Someone once said if you’re not sure where to start, start at the beginning. And it’s a good thing to know what disability insurance is before getting into the nitty-gritty of the state insurance programs.
Simply put, disability insurance replaces your lost income due to a disability, illness or injury, normally covering between 40% and 70% of your salary. There are several different types of disability insurance that may apply to you, like:
- Individual long-term disability insurance: This coverage handles long-term injuries, disabilities, and illnesses. These disabilities or illnesses keep you from working and are not to be confused with work-related injuries or illnesses. Coverage lasts years, and sometimes decades, depending on your benefits.
- Individual short-term disability insurance: Just like long-term disability insurance, short-term also covers injuries, disabilities, and illnesses that keep you from working. Instead of lasting years, this coverage only lasts for days or months, hence the title short-term.
- Group long-term disability insurance: Group long-term is offered through your employer. You can choose to participate in group coverage or opt out. This policy is offered to all eligible employees at your work and is the kind of disability coverage that lasts for years. Health risk factors are not accounted for since it is rated on a group basis, which is a huge plus.
- Group short-term disability insurance: This group disability coverage is just like group long-term insurance in the sense that it is offered through your employer and covers disabilities, illnesses, and injuries. Again, it is offered to all eligible employees and you may choose to opt out if you so desire. Health risk factors are still not accounted for on this disability policy type and your employer normally pays for this coverage.
Government-backed disability programs:
- Social Security Disability Insurance: This is offered by the federal government and is a federally funded disability benefits program. Sounds like a big deal doesn't it?
- State disability programs: These programs are in just a few states across the country and offer temporary disability insurance.
How and When to Qualify for New Jersey's Disability Program
The program offers temporary disability insurance to New Jersey workers with an injury, illness, or disability that would prevent them from working. These are not work-related injuries or illnesses, that would be covered under your employer’s workers' compensation policy.
Qualifications to be eligible for New Jersey's disability program:
- You need to have paid into the program through your employment.
- You need to meet minimum gross earnings requirements.
- You cannot be one of the following exempt workers: federal government employees, out-of-state employees, or workers who are not technically employees, aka contractors.
When to qualify for New Jersey's disability program in 2019:
- You must have worked 20 weeks.
- Earned at least $172 weekly.
- Or have earned a combined total of $8,600 in the period known as the base year.
What Are the Taxes for the New Jersey Disability Program?
Each working employee pays into the New Jersey state disability program. In 2019, workers contributed just 0.17%. And the maximum that any one worker contributed in 2019 was $58.48. Sounds pretty reasonable.
Your New Jersey disability benefits are considered taxable income for the purposes of both federal income tax and Social Security, aka FICA. Federal income tax will not be withheld from your benefit payment each week unless you request it when you file.
However, your share of FICA and Medicare is automatically deducted from state plan benefit payments. If you have any garnishments or unpaid disability taxes, those will be deducted as well.
Your taxable benefits will then be reported to your employer in January of the year following the receipt of your benefits. Your employer will include that information on your W-2 annual earnings statement.
Seems like a lot to know doesn't it? Well, contacting your local independent insurance agent about all disability programs and insurance is the best resource you could have. They are not afraid of the state disability programs and know the ins and out of them better than most.
What Benefits Does the New Jersey Disability Program Offer?
Like most other disability insurance policies, this is no different when it comes to the basics. The New Jersey disability program offers supplementation of income, which comes out to be two-thirds of your average weekly pay rate.
The maximum weekly benefit the New Jersey disability program paid out in 2019 was $650. All calculations of your weekly rate can be found on the Department of Labor and Workforce website for the state of New Jersey here.
Keep in mind that this state disability program is temporary disability insurance and does not accommodate a long-term disability. As a result, when the New Jersey state disability program figures out how much they will pay and for how many weeks, they will do this based on your average for weeks when you earned $172 or more.
Considering you are only paying in a very minimal amount out of your paychecks, that's a pretty good return on your tax investment. Your independent insurance agent is armed with all the facts and can fill all your disability coverage gaps.
Be sure to speak with your local independent insurance agent about planning for disability before, during and after you access the state disability program.
What's So Great about Independent Insurance Agents?
Tired of researching about state disability insurance, or all insurance for that matter? That’s why independent insurance agents were invented. Would you go to court with the knowledge you gathered from the internet? Chances are probably not.
The same applies to disability insurance, leave it to the professionals. They're licensed pros who know how to find exactly what you want for the best possible price. They find you the best carriers with the best coverage and pricing to fit your budget.
So go on, give your local independent insurance agent a call. They're all geared up to help and they know a thing or two about what you need.
TrustedChoice.com Article | Reviewed by Jeffrey Green
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Division of Temporary Disability and Family Leave Insurance. (2019). https://myleavebenefits.nj.gov/worker/tdi/