Workers’ compensation insurance covers the cost of medical care, rehabilitation, lost wages, and death benefits in the event that a worker is hurt or fatally injured in a work-related accident. When an employee receives workers’ compensation benefits, the right to sue the employer for injuries caused by workplace activities is forfeited, no matter who or what caused the accident.
Workers’ compensation systems differ from state to state. In each state, workers’ compensation rules are determined by court decisions and state statutes. These rules often include benefit rates, how claims are handled, how impairment is evaluated, and how disputes are settled.
All New Jersey employers not covered by Federal programs are required by New Jersey law to have workers’ compensation coverage unless the employer qualifies for self-insurance.
The employing entities required by New Jersey law to hold workers’ compensation coverage include corporations, LLCs/partnerships, and sole proprietorships. Additionally, the New Jersey workers’ compensation law also applies to out-of-state employers if the employment is contracted in New Jersey or if any work is carried out in New Jersey.
Workers’ compensation insurance policies must be written by a New Jersey authorized mutual or stock carrier. Insurance premiums for New Jersey workers’ compensation insurance policies are determined by work classification(s) as well as the claims history and payroll of the employer. The New Jersey Compensation Rating and Inspection Bureau (NJCRIB) is the agency responsible for setting and maintaining regulations and premium rates for workers’ compensation.
In September 2012, New Jersey’s Division of Workers’ Compensation proposed an amendment to increase the maximum weekly benefit rates for temporary disability, permanent total disability, permanent partial disability, and dependency under the Workers’ Compensation Law.
And now that we have entered a new year, we will, in fact be, seeing increased rates because this amendment has now become law. For the calendar year 2013, the maximum workers’ compensation weekly benefit rate in New Jersey is $826, up from the previous rate of $810.
Robert Hartwig, president of the Insurance Information Institute, recently addressed increasing benefit rates when he spoke at the Business Insurance’s 2012 Workers’ Compensation Conference. Hartwig acknowledged the overall upward trend of benefit rates in 2013 as a result of wage growth, slight job growth, and efforts by insurers to improve their underwriting results. As Business Insurance reported, Hartwig said, “. . . comp has actually gone from the fastest-shrinking line, (to) now in 2012, most likely to the fastest-growing of all commercial lines.”
If you are a New Jersey business owner or New Jersey employee who would like to better understand how the changes to workers’ compensation rates will impact you, contact Martin Financial Group at 609-356-1500.
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