Disability income policies (definitions of disability, elimination and benefit periods, riders, business disability coverage) are covered in the national Disability Income Insurance guide. New Jersey adds two things the state exam can ask about: the Temporary Disability Benefits Law, a state program for non-work disabilities, and New Jersey's version of the relation of earnings to insurance provision.

New Jersey Temporary Disability Benefits (TDB)

New Jersey runs a state short-term disability program for non-occupational illness and injury.

• What it covers: wage loss from an accident or sickness that doesn't arise out of employment (or isn't compensable under workers' compensation), and family leave (N.J.S.A. 43:21-29(a)).
• Waiting period: the first 7 consecutive days of disability aren't paid, unless benefits become payable for three consecutive weeks, in which case the first 7 days are paid too (N.J.S.A. 43:21-39(a)).
• No waiting period for family leave (N.J.S.A. 43:21-39(a)(3)).
• Maximum duration: 26 weeks for any one period of disability under the State plan (N.J.S.A. 43:21-39(b)(1)).
• Benefit amount: for claims beginning on or after July 1, 2020, 85% of the average weekly wage, up to a maximum of 70% of the statewide average weekly remuneration (N.J.S.A. 43:21-40b).

Private plans

An employer may cover its workers through a private plan instead of the State plan if the private plan (N.J.S.A. 43:21-32):

• covers all employees,
• uses eligibility rules no stricter than the State plan,
• pays weekly benefits and duration at least equal to the State plan, and
• doesn't charge employees more than the State plan would.

When workers' compensation is contested

If a worker's claim for temporary workers' compensation is contested and delayed, the worker can collect TDB until compensation is paid. The State fund or private plan is then reimbursed from the compensation (N.J.S.A. 43:21-30(b)(1)).

Relation of earnings to insurance

New Jersey allows this optional provision in individual disability policies (N.J.S.A. 17B:26-22). If the insured's total loss-of-time benefits from all valid coverage exceed the greater of:

• monthly earnings when the disability began, or
• average monthly earnings for the prior 2 years,

the insurer pays only a proportionate share of its benefit and returns the excess premium paid during those 2 years. The provision can't cut total monthly benefits from all coverage below $200 (or the total stated benefit, if less).

Other New Jersey provisions that affect disability income

• Time of payment: periodic benefits must be paid at least monthly (N.J.S.A. 17B:26-11).
• Change of occupation: a move to a more hazardous job reduces benefits to what the premium would have bought at the higher rate (N.J.S.A. 17B:26-17).
• Group health dependents: group policies may extend benefits to dependents, but not loss-of-time benefits (N.J.S.A. 17B:27-30).

The full list of New Jersey's individual policy provisions is in the New Jersey Individual Accident and Health Provisions guide.

Common exam traps

• TDB is for non-work disabilities. Work injuries go to workers' compensation.
• 7-day waiting period, paid back only if benefits run for 3 consecutive weeks. Family leave has no waiting period.
• 26 weeks is the State plan maximum.
• 85% of the average weekly wage, capped at 70% of the statewide average weekly remuneration.
• Relation of earnings compares against the greater of current earnings or the 2-year average.