Geaney: Supplemental Benefits for Surviving Dependents of Essential Workers
Thursday, April 29, 2021 | 0
Last week, New Jersey Gov. Phil Murphy signed into law a bill co-sponsored by Sens. Troy Singleton and Dawn Addiego. The bill will provide weekly supplemental benefits to surviving dependents of essential employees who contracted COVID-19 through work. The benefits will be paid by the New Jersey Second Injury Fund.
The prerequisites for a dependent to receive the supplemental benefit are that the decedent must have been an essential employee under New Jersey law and there must be a court order in the form of a dependency award in the Division of Workers’ Compensation.
While the law itself does not mention the need for a dependency award, the Office of Special Compensation Funds advised that dependency judgments must first be entered before the Second Injury Fund can pay the supplemental benefits. This is similar to public safety law N.J.S.A. 34:15-95.6.
The Office of Special Compensation Funds also advised that the petitioner must fill out several documents that are listed on the office’s website before the supplemental payments will be made. The expectation is that counsel for the petitioner will fill out the calculation sheet. None of this is in the actual law.
The formula for the supplement requires that one should use the workers’ compensation weekly dependency benefit initially awarded as the numerator and use the state’s maximum workers’ compensation death benefit as the denominator.
In 2021 the maximum death rate is $969. Consider then a hypothetical case where an essential employee dies in 2021 from COVID-19. The employee’s wage was $830.57, giving rise to a dependency rate of $581.40, which is 60% of the maximum death rate of $969.
Every year as the maximum death rate rises, a supplemental payment will be made to the dependent so that the dependent’s benefits never drop below 60% of the maximum death rate in effect for subsequent years. Without that supplement, the dependent’s rate would remain the same every year, as it does for almost all other dependents in New Jersey.
The notice provision of the law was not well thought out. The new law states that the Second Injury Fund must be notified by the insurance carrier or self-insured employer of the need to make supplemental benefit payments. The notice must be completed no 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.” That date clearly will be the date of the dependency award entered by the judge of compensation.
But the Office of Special Compensation Funds has already advised that the petitioner’s attorney must complete certain forms before payments will be made. It would seem then that the notice will be coming from the petitioner’s attorney. Yet the law goes on to provide, ominously, “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.”
The penalty language imposed on the carrier or employer makes absolutely no sense, since the forms that need to be completed will be executed by the petitioner’s attorney, who will be providing notice through those forms, and no payment can be made until the fund receives them.
One may surmise that there was a communication failure between the bill sponsors and the Office of Special Compensation Funds. If delays are occasioned by the failure of a petitioner’s attorney to submit the forms, why would the insurance carrier or employer be penalized for not giving timely notice?
Given this legislative snafu, employers, self-insureds and their counsel will be well advised to provide notice to the fund in writing by certified mail immediately after a dependency award has been executed by the judge even though the employer and carrier have no control over the submission of the necessary forms that will trigger the supplemental payments.
What about all the cases that have already been accepted in the past year involving essential employees but have never gone through court? The Office of Special Compensation Funds advised that court orders will need to be entered for dependents to receive the supplemental payments. Claim petitions will need to be filed to convert the voluntary tender of dependency benefits into a dependency order.
John H. Geaney is an attorney, executive committee member and shareholder with Capehart Scatchard, a defense law firm in New Jersey. This post appears with permission from Geaney's New Jersey Workers' Comp Blog.