Senator STEPHEN M. SWEENEY
District 3 (Cumberland, Gloucester and Salem)
Senator FRED H. MADDEN, JR.
District 4 (Camden and Gloucester)
Concerns certain workers' compensation supplemental benefits.
CURRENT VERSION OF TEXT
An Act concerning workers' compensation benefits and supplementing chapter 15 of Title 34 of the Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. Beginning with the fiscal year 2020, commencing July 1, 2019, and each fiscal year thereafter, a person who is an employee, or a dependent of the employee, who is receiving weekly benefits pursuant to subsection (b) of R.S.34:15-12, R.S.34:15-13, or R.S.34:15-95 for a disability or death that occurred after December 31, 1979, and who is not entitled to receive special adjustment benefits pursuant to section 1 of P.L.1980, c.83 (C.34:15-95.4), shall be entitled to receive weekly supplemental benefits from the Second Injury Fund during the period in which the person is eligible to receive the initially-awarded weekly benefits, whenever the amount of the initially-awarded weekly benefits is less than the total amount of weekly benefits that would be payable to the person if that total amount included weekly supplemental benefits calculated in the manner indicated in subsection b. of this section. In making the determination of the aggregate annual surcharge for the Second Injury Fund to be levied pursuant to paragraph (4) of subsection c. of R.S.34:15-94 for calendar year 2019 and each subsequent calendar year, the commissioner shall include the anticipated additional amounts, including administrative costs, required for payment of supplemental benefits pursuant to this section during the fiscal year which begins on July 1 of the respective calendar year.
b. The base amount of the weekly supplemental benefits to be paid pursuant to this section during each fiscal year shall be calculated in a manner so that when it is added to the workers' compensation weekly benefits initially awarded, the sum of the initial award and the base weekly supplemental benefits shall bear the same percentage relationship to the maximum workers' compensation rate for the current fiscal year that the person's initial compensation bore to the maximum workers' compensation rate in effect at the time of the injury or death. The actual amount of the supplemental benefits paid pursuant to this section shall be 33 1/3% of the base amount during fiscal year 2020; 66 2/3% of the base amount during fiscal year 2021; and 100% of the base amount during fiscal year 2022 and thereafter, except that:
(1) The actual amount of the supplemental benefits paid pursuant to this section shall be reduced if necessary, and as much as is needed, to ensure that the sum of disability benefits provided under the Federal Old Age, Survivors and Disability Insurance Act, the weekly supplemental benefits and the workers' compensation initially awarded does not, with respect to any particular case, exceed the amount which would cause any reduction pursuant to 42 U.S.C. 424a of the amount of disability benefits for which the individual is eligible under the Federal Old Age, Survivors and Disability Insurance Act;
(2) The actual amount of the supplemental benefits paid pursuant to this section to any individual shall, in cases not subject to the provisions of paragraph (1) of this subsection, be reduced by an amount equal to the individual’s benefit payable under the Federal Old-Age, Survivors’ and Disability Insurance Act (except for disability benefits paid to that individual under that act and any cost of living increases in benefits paid to that individual under that act), Black Lung benefits, or the employer’s share of disability pension payments received from or on account of an employer;
(3) A supplemental benefit shall not be paid if the actual amount of the benefit to be paid is calculated to be less than $5 per week, and
(4) A supplemental benefit shall not be paid to an individual who elects to not receive benefits under the Federal Old Age, Survivors and Disability Insurance Act for which the individual is eligible.
c. Notwithstanding any other provision of this section, weekly supplemental benefits paid pursuant to this section shall not be paid in a manner which in any way changes or modifies the provisions of sections 1 or 9 of P.L.1980, c.83 (C.34:15-95.4 and 34:15-95.5).
d. An insurance carrier or self-insured employer responsible for the payment of workers’ compensation to an individual shall notify the Division of Workers’ Compensation of the need to have the Second Injury Fund make supplemental benefit payments to the individual pursuant to this section not later than the 60th day after the date on which it is determined that the payment of supplemental benefits is required pursuant to this section. If the insurance carrier or self-insured employer fails to notify the division and that failure results in the payment of an incorrect amount of benefits, the liability for the payment of the supplemental benefits shall be transferred from the Second Injury Fund to the employer until the time at which the insurance carrier or self-insured employer provides the required notice.
2. This act shall take effect immediately.
This bill provides, from July 1, 2019 forward, an annual cost of living adjustment (COLA) in the weekly workers' compensation benefit rate for any worker who has become totally and permanently disabled from a workplace injury at any time after December 31, 1979 and for the surviving dependents of any worker who died from a workplace injury after December 31, 1979. This adjustment is intended to mirror, to the extent possible, the COLA already in place for benefits arising from an injury occurring before 1980.
The bill provides for the COLA to be an amount such that, when added to the workers' compensation weekly benefit rate initially awarded, the sum will bear the same percentage relationship to the maximum benefit rate at the time of the adjustment that the initial rate bore to the maximum rate at the time of the initial award, except that:
(1) the bill reduces the amount of the adjustment as much as necessary to ensure that the sum of the adjustment and the amount initially awarded does not exceed the amount which would cause any reduction of Social Security disability benefits;
(2) in cases which are not subject to the provisions of point one above, the bill reduces the supplemental workers’ compensation benefits (but not regular workers’ compensation) for claimants injured after 1979 by the amount of any Social Security benefits (other than Social Security disability benefits and any cost of living increases in Social Security benefits), Black Lung benefits, or the employer’s share of disability pension payments received from or on account of an employer; and
(3) the bill requires that the COLA benefits will not be paid to any individual who elects to not receive benefits under the Federal Old Age, Survivors and Disability Insurance Act for which the individual is eligible.
These reductions parallel the reductions provided under current law for claimants who were injured before 1980. The bill also provides that no supplemental benefits will be paid in any case in which they are calculated to be less than $5 per week.
Current law requires such annual adjustments in the rate of workers' compensation benefits for death and permanent total disability to be paid from the Second Injury Fund (SIF), but only for cases of injury or death occurring before January 1, 1980. The bill extends the adjustments paid from the SIF to claims originating after December 31, 1979, although the adjustments apply only to benefits paid on those claims after July 1, 2017 to avoid a backlog of retroactive benefits.
The bill provides that COLA benefits will commence six months after the increased SIF assessment to ensure the SIF has sufficient funds to pay the benefits without using General Fund money. The supplemental benefit payments will start on July 1, 2019 and the Department of Labor and Workforce Development is required to take into account the supplemental benefits when calculating the amount of the SIF assessment which starts on January 1, 2019 to avoid the need for any General Fund appropriation.
To avoid an abrupt fiscal impact on the workers’ compensation system, the bill provides that one third of the supplemental benefit rate be paid during the first year (fiscal year 2020), two thirds of the rate be paid during the second year (fiscal year 2021), and the full amount be paid during the third year (fiscal year 2022) and subsequent years thereafter.
The cost of living supplement that the bill provides to an individual for total permanent disability or survivor’s benefits under workers’ compensation will be reduced by the original amount of that individual’s periodic Social Security survivor’s or retirement benefits, but not reduced by subsequent cost of living increases in those Social Security benefits. In the case of an individual who initially received Social Security disability benefits and later receives Social Security retirement benefits, or who dies and has dependents who receive Social Security survivors’ benefits, the workers’ compensation supplement will then be reduced by the amount of the Social Security retirement or survivor benefits, exclusive of any cost of living increase in those Social Security retirement or survivor benefits.
The bill sets time limits for workers’ compensation insurers and self-insured employers to notify the SIF when supplemental workers’ compensation benefits are required under the bill. An insurer or self-insured employer is required to provide the notice not more than 60 days after the supplement is awarded or voluntary payment is to begin. If a failure to notify results in the payment of an incorrect amount of benefits, the liability for the payment of the supplemental benefits is transferred from the SIF to the insurer or employer until the required notice is provided.
The bill makes no change in the provisions of sections 1 and 9 of P.L.1980, c.83 (C.34:15-95.4 and 34:15-95.5), which provide for the reduction of certain portions of workers' compensation benefits by the amount of Social Security disability benefits paid. In addition, the bill expressly states that the supplemental benefits shall not be paid in a manner which in any way changes or modifies the provisions of those sections. The bill, therefore, will have no effect on existing provisions of State and federal law regarding offsets between workers' compensation and federal Social Security disability benefits.