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Effective June 17, 2019, N.J.S.A 34:15-95.6 became law in New Jersey. This law applies to dependents of public safety workers, who are defined as officers of a paid, partially-paid, or volunteer fire or police department, force, company or district, including the State Police or a first aid or rescue squad. The purpose of this law is to increase dependency benefits for those who received awards after December 31, 1979. The statute calls these benefits “supplemental benefits” not COLA benefits.
The statute does not require the supplemental payments to be retroactive to the time of the original award. Rather the Act is prospective. Beginning on January 1, 2020, and in each fiscal year thereafter, the dependent of a public safety worker will begin receiving supplemental benefits. There is a formula outlined below which attempts to create a parallel percentage between the rate of benefits and the max rate in effect at the time of the award with the current max rate. Bear in mind that before 2004, one dependent received only 50% of the decedent’s wages, not the current 70%.
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 death 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 death benefit rate for the current fiscal year that the dependent’s initial weekly death benefits bore to the maximum workers’ compensation death benefit rate in effect at the time of the death;
This supplemental benefit is designed to be paid by the Second Injury Fund, not by the employer, carrier or TPA. This law affects public employers of all kinds. The most challenging aspect of the law pertains to notice because there may be dependents potentially eligible for supplemental benefits living in many states. They are not likely to know about this law change. Therefore the statute provides as follows:
d. An insurance carrier or self-insured employer responsible for the payment of workers’ compensation death benefits to a dependent shall notify the Division of Workers’ Compensation of the need to have the Second Injury Fund make supplemental benefit payments to the dependent 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.
Thanks to attorney Steve Cohen, Davis Saperstein & Salomon, P.C., for calling to our attention various issues surrounding this law, including practical problems in providing notice. Carriers and third party administrators must find a way to identify dependency cases that are currently being paid and that fit the time periods in this Act. Mr. Cohen also points out that in section b above, the statute refers to “death benefits initially awarded.” It is unclear whether this provision applies to cases where the carrier or third party administrator voluntarily accepted the case and started making dependency payments without the case ever going through the Division of Workers’ Compensation. In those situations, there would not even be an award. Carriers, third party administrators and Joint Insurance Funds generally should consult counsel for advice in complying with this law and its notice provisions.
This new law does not apply to those who are entitled to receive special adjustment benefits pursuant to N.J.S.A. 34:15-95.4. In addition, it should be noted that there may be a reduction of benefits by an amount equal to the dependent’s benefits payable under the Federal Old-Age, Survivors’ and Disability Insurance Act, excluding disability benefits paid under that act.
John H. Geaney, Esq., is an Executive Committee Member and a Shareholder in Capehart Scatchard's Workers’ Compensation Group. Mr. Geaney concentrates his practice in the representation of employers, self-insured companies, third-party administrators, and insurance carriers in workers’ compensation, the Americans with Disabilities Act and Family and Medical Leave Act. Should you have any questions or would like more information, please contact Mr. Geaney at 856.914.2063 or by e‑mail at email@example.com.