S 1402

SENATE, No. 1402
STATE OF NEW JERSEY
222nd LEGISLATURE
�
PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION
Sponsored by:
Senator JOSEPH A. LAGANA
District 38 (Bergen)
Senator RAJ MUKHERJI
District 32 (Hudson)
Co-Sponsored by:
Senators Turner and Diegnan
SYNOPSIS
���� Provides health care benefits to disabled members of
TPAF and PERS.
CURRENT VERSION OF TEXT
���� Introduced Pending Technical Review by Legislative
Counsel.
��
An Act concerning health benefits for disabled members
of the Teachers� Pension and Annuity Fund and the Public Employees� Retirement
System and amending P.L.2010, c.3.
���� Be It
Enacted by the Senate and General Assembly of
the State of New Jersey:
���� 1.� Section 10 of P.L.2010,
c.3 (C.18A:66-39.1) is amended to read as follows:
���� 10.� a.� A person who becomes
a member of the Teachers' Pension and Annuity Fund, N.J.S.18A:66-1 et seq., on
or after the effective date of P.L.2010, c.3 shall not be eligible for an
ordinary or accidental disability retirement allowance, but shall be eligible
for disability insurance coverage pursuant to this section.
���� b.��� The State Treasurer is
hereby authorized and permitted to purchase from one or more insurance
companies, as determined by him, group disability benefit coverage to provide
for the disability benefit in the amounts specified herein.� The group
disability benefit coverage may be provided under one or more policies issued
to the State Treasurer specifically for this purpose or, in the discretion of
the State Treasurer, under one or more policies issued to the State Treasurer
which provide group life insurance coverage for members of the retirement
system designated in subsection a. of this section.� Any dividend or
retrospective rate credit allowed by an insurance company attributable to this
program shall be credited in an equitable manner to the funds available to meet
the employers' obligations under such retirement system.
���� Premiums for such group
insurance coverage shall be paid from a special fund, hereby created, called
the "Teachers Group Disability Insurance Premium Fund."� The State
Treasurer shall estimate annually the amount which shall be required for premiums
for such benefits for the ensuing fiscal year and shall certify such amounts
which shall be applied against the total employer contributions due for the
members of the retirement system whose members are covered, depositing such
amounts in the premium fund.
���� During the period such group
insurance policy or policies are in effect with respect to members of the
retirement system, the State Treasurer shall in no way commingle moneys in this
fund with any retirement system.
���� c.��� A person shall not be
allowed the group disability benefit coverage if on the date the person enrolls
in the retirement system, the person is 60 or more years of age, unless the
person furnishes satisfactory evidence of insurability and, on the effective
date of the person's enrollment, is actively at work and performing all the
regular duties at the customary place of employment.
���� The effective date of coverage
for such a benefit shall be the first day of the month which immediately
follows the date when such evidence is determined to be satisfactory.
���� Such evidence of insurability
shall not be required of any person enrolling in the retirement system upon
transfer from another retirement system, if such retirement system provided a
benefit of a similar nature and the transferring person was covered by such a
benefit at the time of the transfer.� If such transferring person was not
covered by such a benefit at the time of the transfer, the person may be
allowed the benefit under the group policy or policies; however, any such
person shall furnish satisfactory evidence of insurability if he had been
unable or failed to give such evidence as a member of the retirement system
from which the person transferred.�
���� Any person who must furnish
satisfactory evidence of insurability, and who ceases to be enrolled in the
retirement system without such evidence having been given, shall continue to be
subject to the same requirement if the person subsequently becomes a member.
���� d.��� The disability benefit
coverage provided under such group policy or policies shall provide a monthly
income if the member becomes totally disabled from occupational or
nonoccupational causes for a period of at least six consecutive months
following the effective date of the coverage.� The monthly disability benefit
may be paid by the insurance company so long as the member remains disabled up
to the seventieth birthday, provided the disability commenced prior to the
sixtieth birthday.� The benefit shall terminate when the member is no longer
considered totally disabled or begins to receive retirement benefits.
���� The member shall be considered
totally disabled if the member is unable to perform each duty of the member's
occupation and is under the regular care of a physician.� After the 12 months
following the commencement of such disability benefit payments, the member
shall be unable to engage in any gainful occupation for which the member is
reasonably fitted by education, training or experience.� Total disability shall
not be considered to exist if the member is gainfully employed.� Following an
agreement with the insurance company and the policyholder, the member may
continue to receive disability benefits for a limited time while performing
some type of work.� During the period of rehabilitation, the monthly benefit
shall be the regular payment less 80% of the member's earnings from such
rehabilitative position.
���� e.��� A member shall be deemed
to be in service and covered by the disability benefit insurance provisions for
a period of no more than six months while on official leave of absence without
pay if satisfactory evidence is presented to the Division of Pensions and
Benefits that such leave of absence without pay is due to illness and that the
member was not actively engaged in any gainful occupation during such period of
leave of absence without pay.
���� Disability benefit insurance
provisions of the group policy or policies shall not cover disability resulting
from or contributed to by pregnancy, act of war, intentionally self-inflicted
injury, or attempted suicide whether or not sane.� For purposes of such
disability benefit coverage, the member shall not be considered to be disabled
while the member is imprisoned or while outside the United States, its
territories or possessions, or Canada.
���� If the member has recovered
from the disability for which the member had received benefits and again
becomes totally disabled while insured, the later disability shall be regarded
as a continuation of the prior one unless the member has returned to full-time
covered employment for at least six months.� If the later absence is due to an
unrelated cause and the member had returned to full-time work, it shall be
considered a new disability.� The disability benefit insurance cannot be
converted to an individual policy.
���� No person shall be covered by
the disability benefit provision of the group policy or policies except upon
the completion of one year of full-time continuous employment in a position
eligible for participation in a retirement system designated in subsection a.
of this section.
���� f.���� The disability benefit
provided under such group policy or policies shall be in an amount equal to 60%
of the member's base monthly salary, reduced by periodic benefits, other
than health insurance, to which the member may be entitled during the
period of total disability.� The minimum monthly disability benefit shall be
$50.
���� The periodic benefit by which
the monthly disability benefit may be reduced shall include salary or wages,
retirement benefits or benefits from any source for which the State or other
public employer has paid any part of the cost or made payroll deductions, other
than health insurance, Social Security disability or other benefits,
including dependents' benefits, and benefits paid by Social Security at the
option of the participant before the age of 65, but not including any increase
in Social Security benefits enacted after the disability benefit under such
group policy or policies has commenced, and any other periodic benefits�
provided by law except on account of military service.
���� For pension purposes, the
member shall be considered as if the member was in active service for the
duration of the time the disability benefit is received.� When a member [begins to
receive]
receives a disability benefit under such group policy or policies, the
insurance company shall pay an amount equal to the employee contribution which
would have been required of the member and deducted from the member's base
salary [in
order to meet the member's obligation for the purchase of the member's
individual retirement annuity]
just prior to the receipt of the disability benefit.� Such amount shall
be paid by the insurance company into the Teachers� Pension and Annuity Fund
without reduction by any other periodic benefit which the member is eligible to
receive.� [Such
amount shall be paid by the insurance company to the insurer or insurers for
the member's retirement annuity.]
���� g.��� Notwithstanding any
other provision of law, an insurance company or companies issuing such policy
or policies may credit the policyholder either directly or in the form of
reduced premiums, with savings by the company or companies in the event that no
brokerage commission or commissions are paid by the company or companies on the
issuance of such policy or policies.
���� No employer obligations shall
be paid when the member is on a leave of absence without pay or when the member
no longer is enrolled in the retirement system designated in subsection a. of
this section.�
���� h.��� The group disability
insurance policy or policies shall provide a member with an opportunity to
purchase additional coverage.
���� i.���� A member or
disability insurance benefit recipient who is disabled and receiving a
benefit under this section shall [remain
eligible for employer-provided]
be entitled to health care benefits coverage under the School
Employees� Health Benefit Program in the same manner as such coverage is
provided by the [employer] State
to retirees of the [retirement
system]
Teachers� Pension and Annuity Fund who receive health insurance under the
School Employees� Health Benefits Program, except the benefit shall be free and
there shall be no employee contribution requirement.� There shall be no
deadline for a disability insurance recipient to enroll in coverage and no
eligibility requirements imposed on that recipient to receive coverage other
than the requirement that a member be a recipient of disability insurance under
this section.
���� j.���� The State Treasurer
shall establish an appeals process to be used when an employer or employee
disagrees with the insurer on the employee's ability to return to employment or
on issues related to physical examinations.
(cf: P.L.2010, c.3, s.10)
���� 2.� Section 11 of P.L.2010,
c.3 (C.43:15A-42.1) is amended to read as follows:
���� 11. a.� A person who becomes a
member of the Public Employees' Retirement System of New Jersey, P.L.1954, c.84
(C.43:15A-1 et seq.), on or after the effective date of P.L.2010, c.3 shall not
be eligible for an ordinary or accidental disability retirement allowance, but
shall be eligible for disability insurance coverage pursuant to this section.
���� b.��� The State Treasurer is
hereby authorized and permitted to purchase from one or more insurance
companies, as determined by him, group disability benefit coverage to provide
for the disability benefit in the amounts specified herein.� The group
disability benefit coverage may be provided under one or more policies issued
to the State Treasurer specifically for this purpose or, in the discretion of
the State Treasurer, under one or more policies issued to the State Treasurer
which provide group life insurance coverage for members of the retirement
system designated in subsection a. of this section.� Any dividend or
retrospective rate credit allowed by an insurance company attributable to this
program shall be credited in an equitable manner to the funds available to meet
the employers' obligations under such retirement system.
���� Premiums for such group
insurance coverage shall be paid from a special fund, hereby created, called
the "Public Employees Group Disability Insurance Premium Fund."� The
State Treasurer shall estimate annually the amount which shall be required for
premiums for such benefits for the ensuing fiscal year and shall certify such
amounts which shall be applied against the total employer contributions due for
the members of the retirement system whose members are covered, depositing such
amounts in the premium fund.
���� During the period such group
insurance policy or policies are in effect with respect to members of the
retirement system, the State Treasurer shall in no way commingle moneys in this
fund with any retirement system.
���� c.��� A person shall not be
allowed the group disability benefit coverage if on the date the person enrolls
in the retirement system, the person is 60 or more years of age, unless the
person furnishes satisfactory evidence of insurability and, on the effective
date of the person's enrollment, is actively at work and performing all the
regular duties at the customary place of employment.
���� The effective date of coverage
for such a benefit shall be the first day of the month which immediately
follows the date when such evidence is determined to be satisfactory.
���� Such evidence of insurability
shall not be required of any person enrolling in the retirement system upon
transfer from another retirement system, if such retirement system provided a
benefit of a similar nature and the transferring person was covered by such a
benefit at the time of the transfer.� If such transferring person was not
covered by such a benefit at the time of the transfer, the person may be
allowed the benefit under the group policy or policies; however, any such
person shall furnish satisfactory evidence of insurability if he had been
unable or failed to give such evidence as a member of the retirement system
from which the person transferred.�
���� Any person who must furnish
satisfactory evidence of insurability, and who ceases to be enrolled in the
retirement system without such evidence having been given, shall continue to be
subject to the same requirement if the person subsequently becomes a member.
���� d.��� The disability benefit
coverage provided under such group policy or policies shall provide a monthly
income if the member becomes totally disabled from occupational or
nonoccupational causes for a period of at least six consecutive months
following the effective date of the coverage.� The monthly disability benefit
may be paid by the insurance company so long as the member remains disabled up
to the seventieth birthday, provided the disability commenced prior to the
sixtieth birthday.� The benefit shall terminate when the member is no longer
considered totally disabled or begins to receive retirement benefits.
���� The member shall be considered
totally disabled if the member is unable to perform each duty of the member's
occupation and is under the regular care of a physician.� After the 12 months
following the commencement of such disability benefit payments, the member
shall be unable to engage in any gainful occupation for which the member is
reasonably fitted by education, training or experience.� Total disability shall
not be considered to exist if the member is gainfully employed.� Following an
agreement with the insurance company and the policyholder, the member may
continue to receive disability benefits for a limited time while performing
some type of work.� During the period of rehabilitation, the monthly benefit
shall be the regular payment less 80% of the member's earnings from such
rehabilitative position.
���� e.��� A member shall be deemed
to be in service and covered by the disability benefit insurance provisions for
a period of no more than six months while on official leave of absence without
pay if satisfactory evidence is presented to the Division of Pensions and
Benefits that such leave of absence without pay is due to illness and that the
member was not actively engaged in any gainful occupation during such period of
leave of absence without pay.
���� Disability benefit insurance
provisions of the group policy or policies shall not cover disability resulting
from or contributed to by pregnancy, act of war, intentionally self-inflicted
injury, or attempted suicide whether or not sane.� For purposes of such
disability benefit coverage, the member shall not be considered to be disabled
while the member is imprisoned or while outside the United States, its
territories or possessions, or Canada.
���� If the member has recovered
from the disability for which the member had received benefits and again
becomes totally disabled while insured, the later disability shall be regarded
as a continuation of the prior one unless the member has returned to full-time
covered employment for at least six months.� If the later absence is due to an
unrelated cause and the member had returned to full-time work, it shall be
considered a new disability.� The disability benefit insurance cannot be
converted to an individual policy.
���� No person shall be covered by
the disability benefit provision of the group policy or policies except upon
the completion of one year of full-time continuous employment in a position
eligible for participation in a retirement system designated in subsection a.
of this section.
���� f.���� The disability benefit
provided under such group policy or policies shall be in an amount equal to 60%
of the member's base monthly salary, reduced by periodic benefits, other
than health insurance, to which the member may be entitled during the
period of total disability.� The minimum monthly disability benefit shall be
$50.
���� The periodic benefit by which
the monthly disability benefit may be reduced shall include salary or wages,
retirement benefits or benefits from any source for which the State or other
public employer has paid any part of the cost or made payroll deductions, other
than health insurance, Social Security disability or other benefits,
including dependents' benefits, and benefits paid by Social Security at the
option of the participant before the age of 65, but not including any increase
in Social Security benefits enacted after the disability benefit under such
group policy or policies has commenced, and any other periodic benefits�
provided by law except on account of military service.
���� For pension purposes, the
member shall be considered as if the member was in active service for the
duration of the time the disability benefit is received.� When a member [begins to
receive]
receives a disability benefit under such group policy or policies, the
insurance company shall pay an amount equal to the employee contribution which
would have been required of the member and deducted from the member's base
salary [in
order to meet the member's obligation for the purchase of the member's
individual retirement annuity]
just prior to the receipt of the disability benefit.� Such amount shall
be paid by the insurance company into the Public Employees� Retirement
System without reduction by any other periodic benefit which the member is
eligible to receive.� [Such
amount shall be paid by the insurance company to the insurer or insurers for
the member's retirement annuity.]
���� g.��� Notwithstanding any
other provision of law, an insurance company or companies issuing such policy
or policies may credit the policyholder either directly or in the form of
reduced premiums, with savings by the company or companies in the event that no
brokerage commission or commissions are paid by the company or companies on the
issuance of such policy or policies.
���� No employer obligations shall
be paid when the member is on a leave of absence without pay or when the member
no longer is enrolled in the retirement system designated in subsection a. of
this section.
���� h.��� The group disability
insurance policy or policies shall provide a member with an opportunity to
purchase additional coverage.
���� i.���� A member or
disability insurance benefit recipient who is disabled and receiving a
benefit under this section shall [remain
eligible for employer-provided]
be entitled to health care benefits coverage under the State Health
Benefit Program or the School
Employees� Health Benefits Program in the same manner as such
coverage is provided by the [employer] State
to retirees of the [retirement
system]
Public Employees� Retirement System who receive health insurance under the
State Health Benefits Program or the
School Employees� Health Benefits Program ,
except the benefit shall be free and there shall be no employee contribution
requirement.� There shall be no deadline for a disability insurance recipient
to enroll in coverage and no eligibility requirements imposed on that recipient
to receive coverage other than the requirement that a member be a recipient of
disability insurance under this section.
���� j.���� The State Treasurer
shall establish an appeals process to be used when an employer or employee
disagrees with the insurer on the employee's ability to return to employment or
on issues related to physical examinations.
(cf: P.L.2010, c.3, s.11)
���� 3.� This act shall take effect
immediately.
STATEMENT
���� This bill permits members of the Teachers� Pension and
Annuity Fund (TPAF) and Public Employees� Retirement System (PERS), or long
term disability insurance recipients who are disabled and receiving TPAF or
PERS disability insurance benefits, to be entitled to health care benefits
under the School Employees� Health Benefits Program (SEHBP) and State Health
Benefits Program (SHBP) in the same manner as it is provided to retirees of the
TPAF and PERS retirement systems who receive health insurance under the SEHBP
and SHBP, except that such health care benefits are to be free and will not
require employee contributions.
����� The bill provides that there is no deadline for
disability insurance recipients to enroll in coverage and no eligibility
requirements imposed to receive coverage, other than the member being required
to be a recipient of disability insurance under TPAF or PERS.
����� The bill also specifies that health benefits are not
to be considered as benefits that reduce the amount that disabled TPAF or PERS
members would receive in disability benefits and, for pension purposes, the
member is to be considered as if the member was in active service for the
duration of the time the disability benefit is received.