Concerns certain workers' compensation supplemental benefits and funding method.

A4617

ASSEMBLY, No. 4617

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED MARCH 10, 2026

Sponsored by:

Assemblywoman� DAWN FANTASIA

District 24 (Morris, Sussex and Warren)

SYNOPSIS

���� Concerns certain workers� compensation supplemental
benefits and funding method.�

CURRENT VERSION OF TEXT

���� As introduced.

��

An Act
concerning workers� compensation 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 on July 1,
2026, and in 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), or the supplemental
benefits pursuant to section 1 of P.L.2019, c.127 (C.34:15-95.6) or section 1
of P.L.2021, c.55 (C.34:15-95.8), 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 persons 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 2026 and each
subsequent calendar year, the Commissioner of Labor and Workforce Development shall
exclude the anticipated additional amounts required for payment of supplemental
benefits pursuant to this section during the fiscal year which begins on July 1
of the respective calendar year.� The amounts required to fund the weekly
supplemental benefits that are excluded from the calculation of employer
assessments shall be sourced from the General Fund.

���� 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 benefit rate for the current
fiscal year that the person's initial weekly benefits bore to the maximum
workers' compensation benefit 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 2027; 66 2/3% of the
base amount during fiscal year 2028; and 100% of the base amount during fiscal
year 2029 and thereafter, except that:

���� (1)�� The actual amount of the
supplemental benefits paid pursuant to this section to any person 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.

STATEMENT

���� This bill provides, from July
1, 2026 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, except the COLA provided in this bill does not
apply public safety workers and their dependents who already receive a COLA
pursuant to P.L.2019, c.127, or to dependents of essential employees who died
from COVID, who receive a COLA pursuant to P.L.2021, c.55.� 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;

���� (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; and

���� (4)�� the bill requires that
the COLA increase portion of the benefit increase is funded out of the General
Fund.

���� 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, 2026 to avoid a backlog of retroactive benefits.

���� 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 2027),
two thirds of the rate be paid during the second year (fiscal year 2028), and
the full amount be paid during the third year (fiscal year 2029) and subsequent
years.

���� 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. �