SENATE, No. 1200

 

STATE OF NEW JERSEY

 

INTRODUCED MARCH 21, 1996

 

 

By Senator LITTELL

 

 

An Act concerning funding for hospital charity care subsidies and other purposes and the provision of unemployment insurance benefits, revising parts of the statutory law, and making an appropriation.

 

    Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

    1. Section 2 of P.L.1992, c.160 (C.26:2H-18.52) is amended to read as follows:

    2. As used in sections 1 through 17 of [this act and] P.L.1992, c.160 (C.26:2H-18.51 through 26:2H-18.67), sections 12 through 15 of P.L.1995, c.133 (C.26:2H-18.59a through C.26:2H-18.59d) and sections 7 through 14 of P.L. , c. (C. )(pending before the Legislature as this bill):

    "Administrator" means the administrator of the Heath Care Subsidy Fund appointed by the commissioner.

    "Charity care" means care provided at disproportionate share hospitals that may be eligible for a charity care subsidy pursuant to this act.

    "Charity care subsidy" means the component of the disproportionate share payment that is attributable to care provided at a disproportionate share hospital to persons unable to pay for that care, as provided in this act.

    "Commission" means the New Jersey Essential Health Services Commission established pursuant to section 4 of this act.

    "Commissioner" means the Commissioner of Health.

    "Department" means the Department of Health.

    "Disproportionate share hospital" means a hospital designated by the Commissioner of Human Services pursuant to Pub.L.89-97 (42 U.S.C.§1396a et seq.) and Pub.L.102-234.

    "Disproportionate share payment" means those payments made by the Division of Medical Assistance and Health Services in the Department of Human Services to hospitals defined as disproportionate share hospitals by the Commissioner of Human Services in accordance with federal laws and regulations applicable to hospitals serving a disproportionate number of low income patients.     "Fund" means the Health Care Subsidy Fund established pursuant to section 8 of this act.

    "Hospital" means an acute care hospital licensed by the Department of Health pursuant to P.L.1971, c.136 (C.26:2H-1 et al.).

    "Medicaid" means the New Jersey Medical Assistance and Health Services Program in the Department of Human Services established pursuant to P.L.1968, c.413 (C.30:4D-1 et seq.).

    "Medicare" means the program established pursuant to Pub.L.89-97 (42 U.S.C.§1395 et seq.).

    "Other uncompensated care" means all costs not reimbursed by hospital payers excluding charity care, graduate medical education, discounts, bad debt and reduction in Medicaid payments.

    "Poverty level" means the official poverty level based on family size established and adjusted under Section 673(2) of Subtitle B, the "Community Services Block Grant Act," Pub.L.97-35 (42 U.S.C.§9902(2)).

    "Preliminary cost base" means the preliminary cost base defined in section 2 of P.L.1971, c.136 (C.26:2H-2), as determined by the Hospital Rate Setting Commission.

(cf: P.L.1995, c.133, s.1)

 

    2. Section 5 of P.L.1992, c.160 (C.26:2H-18.55) is amended to read as follows:

    5. The commissioner shall:

    a. Administer the fund and establish a mechanism to allocate monies received from the Commissioner of Labor pursuant to section 29 of P.L.1992, c.160 (C.43:21-7b) to the appropriate accounts in the fund as specified in this act;

    b. Establish eligibility determination and claims pricing systems for the charity care component of the disproportionate share subsidy, including the development of uniform forms for determining eligibility and submitting claims. The commissioner may contract with a private claims administrator or processor for the purpose of processing hospital claims for charity care pursuant to this act;

    c. Establish a schedule of payments for reimbursement of the charity care component of the disproportionate share payment for services provided to emergency room patients who do not require those services on an emergency basis;

    d. In cooperation with the Departments of Insurance and Human Services, develop and provide for the implementation of the Health Access New Jersey program pursuant to section 15 of [this act] P.L.1992, c.160 (C.26:2H-18.65);

    e. Study and, if feasible, establish hospital cost and outcome reports to provide assistance to consumers of health care in this State in making prudent health care choices;

    f. Compile demographic information on recipients of, and types of services paid for by, the charity care component of the disproportionate share payment and periodically report a summary of this information to the Governor and Legislature. The demographic information shall include, at a minimum, the recipient's age, sex, marital status, employment status, type of health insurance coverage, if any, and if the recipient is a child under 18 years of age who does not have health insurance coverage or a married person who does not have health insurance coverage, whether the child's parent or the married person's spouse, as the case may be, has health insurance;

    g. (Deleted by amendment, P.L.1995, c.133.)

    h. (Deleted by amendment, P.L.1995, c.133.)

    i. (Deleted by amendment, P.L.1995, c.133.)

    j. (Deleted by amendment, P.L.1995, c.133.)

    k. (Deleted by amendment, P.L.1995, c.133.)

    l. Encourage the use of centralized data storage and transmission technology that utilizes personal and image identification systems as well as identity verification technology for the purposes of enabling a hospital to access medical history, insurance information and other personal information, as appropriate;

    m. (Deleted by amendment, P.L.1995, c.133.)

    n. (Deleted by amendment, P.L.1995, c.133.)

    o. Take such other actions as the commissioner deems necessary and appropriate to carry out the provisions of P.L.1992, c.160 (C.26:2H-18.51 et al.); and

    p. Report annually, by December 31 of each year, to the Governor and the [Legislature] Senate and General Assembly standing reference committees on budget and appropriations on the status of the fund and include the amount of any balances in the fund and the expected expenditures from the fund in the next calendar year.

(cf: P.L.1995, c.133, s.2)

 

    3. Section 8 of P.L.1992, c.160 (C.26:2H-18.58) is amended to read as follows:

    8. There is established the Health Care Subsidy Fund in the Department of Health.

    a. The fund shall be comprised of revenues from employee and employer contributions made pursuant to section 29 of P.L.1992, c.160 (C.43:21-7b), revenues pursuant to sections 11 and 12 of P.L.   , c. (C. )(pending before the Legislature as this bill), revenues from the hospital assessment made pursuant to section 12 of [this act] P.L.1992, c.160 (C.26:2H-18.62), revenues from interest and penalties collected pursuant to [this act] P.L.1992, c.160 (C.26:2H-18.51 et al.) and revenues from such other sources as the Legislature shall determine. Interest earned on the monies in the fund shall be credited to the fund.

    The fund shall be a nonlapsing fund dedicated for use by the State to: (1) distribute charity care disproportionate share payments to hospitals, [and] distribute other uncompensated care disproportionate share payments to hospitals pursuant to section 11 of P.L.1992, c.160 (C.26:2H-18.61), and provide subsidies for the Health Access New Jersey program established pursuant to section 15 of [this act] P.L.1992, c.160 (C.26:2H-18.65); and (2) assist hospitals and other health care facilities in the underwriting of innovative and necessary health care services.

    b. The fund shall be administered by a person appointed by the commissioner.

    The administrator of the fund is responsible for overseeing and coordinating the collection and reimbursement of fund monies. The administrator is responsible for promptly informing the commissioner if monies are not or are not reasonably expected to be collected or disbursed [or if the fund's reserve as established in subsection c. of this section falls below the required level].

    c. [The fund shall maintain a reserve in an amount not to exceed $20 million.] The commissioner shall adopt rules and regulations to [govern the use of the reserve and to] ensure the integrity of the fund, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.).

    d. The administrator shall establish separate accounts for the charity care component of the disproportionate share hospital subsidy, other uncompensated care component of the disproportionate share hospital subsidy for monies distributed pursuant to section 11 of P.L.1992, c.160 (C.26:2H-18.61), hospital and other health care initiatives funding and the payments for subsidies for insurance premiums [to provide care in disproportionate share hospitals], known as the Health Access New Jersey subsidy account, respectively.

    e. In the event that [the charity care component of the disproportionate share hospital subsidy] any account in the fund has a surplus in a given year after [payments are distributed pursuant to the methodology established in section 13 of P.L.1995, c.133 (C.26:2H-18.59b) and within the limitations provided in subsection e. of section 9 of P.L.1992, c.160 (C.26:2H-18.59), the commissioner may reallocate the surplus monies to the Health Access New Jersey subsidy account] funds are expended from that account pursuant to the provisions of P.L.1992, c.160 (C.26:2H-18.51 et al.), section 13 of P.L.1995, c.133 (C.26:2H-18.59b), and P.L. , c. (C. ) (pending before the Legislature as this bill), the surplus funds shall lapse to the


unemployment compensation fund established pursuant to R.S.43:21-9.

(cf: P.L.1995, c.133, s.4)

 

    4. Section 9 of P.L.1992, c.160 (C.26:2H-18.59) is amended to read as follows:

    9. a. The commissioner shall allocate such funds as specified in subsection e. of this section to the charity care component of the disproportionate share hospital subsidy account. In a given year, the department shall transfer from the fund to the Division of Medical Assistance and Health Services in the Department of Human Services such funds as may be necessary for the total approved charity care disproportionate share payments to hospitals for that year.

    b. For the period January 1, 1993 to December 31, 1993, the commission shall allocate $500 million to the charity care component of the disproportionate share hospital subsidy account. The Department of Health shall recommend the amount that the Division of Medical Assistance and Health Services shall pay to an eligible hospital on a provisional, monthly basis pursuant to paragraphs (1) and (2) of this subsection. The department shall also advise the commission and each eligible hospital of the amount a hospital is entitled to receive.

    (1) The department shall determine if a hospital is eligible to receive a charity care subsidy in 1993 based on the following:

     Hospital Specific Approved Uncompensated Care-1991

    ..................................................................

     Hospital Specific Preliminary Cost Base-1992

     = Hospital Specific % Uncompensated Care (%UC)

    A hospital is eligible for a charity care subsidy in 1993 if, upon establishing a rank order of the %UC for all hospitals, the hospital is among the 80% of hospitals with the highest %UC.

    (2) The maximum amount of the charity care subsidy an eligible hospital may receive in 1993 shall be based on the following:

     Hospital Specific Approved Uncompensated Care-1991

    ..................................................................

    Total approved Uncompensated Care All Eligible Hospitals-1991

                                    X $500 million

            = Maximum Amount of Hospital Specific

                        Charity Care Subsidy for 1993

    (3) A hospital shall be required to submit all claims for charity care cost reimbursement, as well as demographic information about the persons who qualify for charity care, to the department in a manner and time frame specified by the Commissioner of Health, in order to continue to be eligible for a charity care subsidy in 1993 and in subsequent years.

    The demographic information shall include the recipient's age, sex, marital status, employment status, type of health insurance coverage, if any, and if the recipient is a child under 18 years of age who does not have health insurance coverage or a married person who does not have health insurance coverage, whether the child's parent or the married person's spouse, as the case may be, has health insurance.

    (4) A hospital shall be reimbursed for the cost of eligible charity care at the same rate paid to that hospital by the Medicaid program; except that charity care services provided to emergency room patients who do not require those services on an emergency basis shall be reimbursed at a rate appropriate for primary care, according to a schedule of payments developed by the commission.

    (5) The department shall provide for an audit of a hospital's charity care for 1993 within a time frame established by the department.

    c. For the period January 1, 1994 to December 31, 1994, a hospital shall receive disproportionate share payments from the Division of Medical Assistance and Health Services based on the amount of charity care submitted to the commission or its designated agent, in a form and manner specified by the commission. The commission or its designated agent shall review and price all charity care claims and notify the Division of Medical Assistance and Health Services of the amount it shall pay to each hospital on a monthly basis based on actual services rendered.

    (1) (Deleted by amendment, P.L.1995, c.133.)

    (2) If the commission is not able to fully implement the charity care claims pricing system by January 1, 1994, the commission shall continue to make provisional disproportionate share payments to eligible hospitals, through the Division of Medical Assistance and Health Services, based on the charity care costs incurred by all hospitals in 1993, until such time as the commission is able to implement the claims pricing system.

    If there are additional charity care balances available after the 1994 distribution based on 1993 charity care costs, the department shall transfer these available balances from the fund to the Division of Medical Assistance and Health Services for an approved one-time additional disproportionate share payment to hospitals according to the methodology provided in section 12 of P.L.1995, c.133 (C.26:2H-18.59a). The total payment for all hospitals shall not exceed $75.5 million.

    (3) A hospital shall be reimbursed for the cost of eligible charity care at the same rate paid to that hospital by the Medicaid program; except that charity care services provided to emergency room patients who do not require those services on an emergency basis shall be reimbursed at a rate appropriate for primary care, according to a schedule of payments developed by the commission.

    (4) (Deleted by amendment, P.L.1995, c.133.)

    d. (Deleted by amendment, P.L.1995, c.133.)

    e. The total amount allocated for charity care subsidy payments shall be: in 1994, $450 million [and]; in 1995, $400 million; in 1996, $275 million; and in 1997, $265 million. Total payments to hospitals shall not exceed the amount allocated for each given year.

    f. Beginning January 1, 1995:  

    (1) The charity care subsidy shall be determined pursuant to section 13 of P.L.1995, c.133 (C.26:2H-18.59b).

    (2) A charity care claim shall be valued at the same rate paid to that hospital by the Medicaid program, except that charity care services provided to emergency room patients who do not require those services on an emergency basis shall be valued at a rate appropriate for primary care according to a schedule of payments adopted by the commissioner.

    (3) The department shall provide for an audit of a hospital's charity care within a time frame established by the commissioner.

(cf: P.L.1995, c.133, s.5)

  

    5. Section 15 of P.L.1992, c.160 (C.26:2H-18.65) is amended to read as follows:

    15. There is established in the Department of Health the Health Access New Jersey program. The purpose of the program is to provide subsidies for health benefits coverage, in order to provide for health care [which shall be delivered in disproportionate share hospitals and by other community-based health care providers] for low income, uninsured children, working people and those temporarily unemployed, based on a sliding income scale with modest copayments. The program shall include the provision of early preventive and primary care [to help reduce costs for families and individuals].

   The commissioner shall adopt regulations pursuant to the "Administrative Procedure Act, " P.L.1968, c.410 (C.52:14B-1 et seq.) that determine eligibility for the program and the allocation of all funds in this account.

    The commissioner shall contract with health insurance carriers, health maintenance organizations and other appropriate entities in the State to administer the program.

(cf: P.L.1995, c.133, s.10)

 

    6. Section 16 of P.L.1992, c.160 (C.26:2H-18.66) is amended to read as follows:

    16. The Health Access New Jersey subsidy account shall be allocated $50 million in 1995, [$100] $40 million in 1996, and [$150] $40 million in 1997 [and each year thereafter].

(cf: P.L.1995, c.133, s.11)

 

    7. (New section) a. Beginning January 1, 1996 through December 31, 1997, the charity care subsidy shall be determined according to the following methodology.

    If the Statewide total of adjusted charity care is less than available charity care funding, a hospital's charity care subsidy shall equal its adjusted charity care.

    If the Statewide total of adjusted charity care is greater than available charity care funding, then the hospital-specific charity care subsidy shall be determined by allocating available charity care funds so as to equalize hospital-specific payer mix factors to the Statewide target payer mix factor. Those hospitals with a payer mix factor greater than the Statewide target payer mix factor shall be eligible to receive a subsidy sufficient to reduce their factor to that Statewide level; those hospitals with a payer mix factor that is equal to or less than the Statewide target payer mix factor shall not be eligible to receive a subsidy.

    Charity care subsidy payments shall be based upon actual documented hospital charity care.

    As used in this section:

    (1) The hospital-specific "documented charity care" shall be equal to the dollar amount of charity care provided by the hospital that is verified in the department's most recent charity care audit conducted under the most recent charity care eligibility rules adopted by the department and valued at the same rate paid to that hospital by the Medicaid program.

    For 1996, documented charity care shall equal the audited, Medicaid-priced amounts reported for the first three quarters of 1995. This amount shall be multiplied by 1.33 to determine the annualized 1995 charity care amount. For 1997, documented charity care shall be equal to the audited Medicaid-priced amounts for the last quarter two years prior to the payment period and the first three quarters of the year prior to the payment period;

    (2) In 1996, the hospital-specific "operating margin" shall be equal to: the hospital's 1993 and 1994 income from operations minus its 1993 and 1994 charity care subsidies divided by its 1993 and 1994 total operating revenue minus its 1993 and 1994 charity care subsidies.

    In 1997, the hospital-specific "operating margin" shall be calculated in the same manner as for 1996, but on the basis of income from operations, total operating revenue and charity care subsidies data from the three most current years.

    After calculating each hospital's operating margin, the department shall determine the Statewide median operating margin;

    (3) The hospital-specific "profitability factor" shall be determined annually as follows. Those hospitals that are equal to or below the Statewide median operating margin shall be assigned a profitability factor of "1". For those hospitals that are above the Statewide median operating margin, the profitability factor shall be equal to:


                        .75 x (hospital specific operating

            margin - Statewide median operating margin)

    1 - ......................................................................................

                        highest hospital specific operating

            margin - Statewide median operating margin

 

    (4) The hospital-specific "adjusted charity care" shall be equal to a hospital's documented charity care times its profitability factor;

    (5) The hospital-specific "revenue from private payers" shall be equal to the sum of the gross revenues, as reported to the department in the hospital's most recently available New Jersey Hospital Cost Reports for all non-governmental third party payers including, but not limited to, Blue Cross and Blue Shield plans, commercial insurers and health maintenance organizations;

    (6) The hospital-specific "payer mix factor" shall be equal to a hospital's adjusted charity care divided by its revenue from private payers; and

    (7) The "Statewide target payer mix factor" is the lowest payer mix factor to which all hospitals receiving charity care subsidies can be reduced by spending all available charity care subsidy funding for that year.

    b. For the purposes of this section, "income from operations" and "total operating revenue" shall be defined by the department in accordance with financial reporting requirements established pursuant to N.J.A.C.8:31B-3.3.

    c. Charity care subsidy payments shall commence on or after the date of enactment of P.L , c. (pending before the Legislature as this bill) and the full calendar year 1996 allocation shall be disbursed by January 30, 1997.

 

    8. (New section) With the exception of the Catastrophic Illness in Children Relief Fund, established pursuant to P.L.1987, c.370 (C.26:2-148 et seq.) and the Victims of Crime Compensation Board established pursuant to section 3 of P.L.1971, c.317 (C.52:4B-3), the Health Care Subsidy Fund is the payer of last resort for persons who otherwise qualify for charity care. A hospital shall not submit a claim for charity care reimbursement on behalf of any individual otherwise eligible for charity care for whom the hospital is eligible to receive reimbursement under any State or federal program not specifically exempted in this section.

 

    9. (New section) a. The Commissioner of Health shall transfer to the Hospital Health Care Subsidy account in the Division of Medical Assistance and Health Services of the Department of Human Services from the Health Care Subsidy Fund, $35 million in calendar year 1996 and $45 million in calendar year 1997, according to a schedule to be determined by the Commissioner of Health in consultation with the Commissioner of Human Services. These funds shall be distributed to eligible disproportionate share hospitals, subject to the provisions of subsection b. of this section, according to a methodology adopted by the Commissioner of Human Services pursuant to N.J.A.C.10:52-8.2, using hospital expenditure data for the most recent calendar year available for services reimbursed from these funds; except that $8.75 million of the total amount transferred to the Division of Medical Assistance and Health Services pursuant to this subsection shall be allocated in each fiscal year under the methodology adopted by the Commissioner of Human Services to those disproportionate share hospitals which serve large numbers of low-income mentally ill or developmentally disabled patients.

    b. Funds distributed pursuant to subsection a. of this section for disproportionate share hospitals which receive payments based on the facility's percentage of clients with AIDS, tuberculosis, substance abuse and addiction and complex births, shall be allocated among a maximum of 30 eligible hospitals.

    c. In calendar years 1996 and 1997, the Governor shall recommend and the Legislature shall appropriate to the Hospital Health Care Subsidy account in the Division of Medical Assistance and Health Services of the Department of Human Services for distribution to disproportionate share hospitals which are eligible for reimbursement pursuant to this section, those federal funds received in connection with the provision of hospital services which are reimbursed from that account.

    d. For calendar year 1998 and each year thereafter, the Governor shall recommend and the Legislature shall appropriate in the annual appropriations act funds as shall be required for the Hospital Health Care Subsidy account.

 

    10. (New section) The Commissioner of Health shall transfer to the Division of Alcoholism, Drug Abuse and Addiction Services in the Department of Health from the Health Care Subsidy Fund, $10 million in Fiscal Year 1997 and $20 million in Fiscal Year 1998 and each fiscal year thereafter, or such sums as are made available pursuant to section 11 of P.L. , c. (C. )(pending before the Legislature as this bill), whichever amount is less, according to a schedule to be determined by the Commissioner of Health, to fund community-based residential and inpatient drug abuse treatment services.

 

    11. (New section) The State Treasurer shall transfer to the Health Care Subsidy Fund established pursuant to section 8 of P.L.1992, c.160 (C.26:2H-18.58), only those revenues generated from third party liability recoveries by the State which are required for the purposes provided in section 10 of P.L.     , c. (C. )(pending before the Legislature as this bill).

 

    12. (New section) The Health Care Subsidy Fund shall be funded with General Fund revenues in the following amounts: in calendar year 1996, $25 million; and in calendar year 1997, $50 million. In order to provide funding for the Health Care Subsidy Fund in these amounts, the Governor shall recommend and the Legislature shall appropriate to the Health Care Subsidy Fund the following amounts: in Fiscal Year 1997, $25 million; and in Fiscal Year 1998, $50 million.

 

    13. (New section) a. The Commissioner of Health shall conduct a study of the feasibility of such policy options as delivering charity care services through a managed care network that includes both inpatient and outpatient services and which may be operated by the State or by a private managed care entity, and shall report on the findings and recommendations of that study to the Governor and the Legislature no later than 15 months after the enactment of P.L. , c. (C.         )(pending before the Legislature as this bill).

    b. The Health Information Electronic Data Interchange Policy Council established pursuant to P.L. , c. (C. )(pending before the Legislature as Senate Bill No. 50 or Assembly Bill No. 1476 of 1996), shall conduct a study of the feasibility of utilizing administrative cost savings accruing from the adoption of health care information electronic data interchange technology to first accelerate the scheduled reduction in the use of revenues from employee and employer contributions and then to reduce the need for General Fund appropriations to fund the Health Care Subsidy Fund pursuant to the provisions of P.L. , c. (C.         )(pending before the Legislature as this bill, and shall report on the findings and recommendations of that study to the Governor and the Legislature no later than eight months after the enactment of P.L. , c. (C. )(pending before the Legislature as Senate Bill No. 50 or Assembly Bill No. 1476 of 1996).

    c. The Commissioner of Health shall conduct a study of the feasibility of reimbursing for charity care services on the basis of claims processed, and at the lowest per diem or per case rate, as applicable, charged by a hospital to any third party payer for health care services; and shall report on the findings and recommendations of that study to the Governor and the Legislature no later than six months after the enactment of P.L. , c. (C.         )(pending before the Legislature as this bill).

 

    14. (New section) The State shall pay inpatient hospitalization costs for a recipient of general public assistance pursuant to P.L.1947, c.156 (C.44:8-107 et seq.) who is admitted to a special hospital or psychiatric hospital licensed by the Department of Health which is not eligible to receive a charity care subsidy from the Health Care Subsidy Fund established pursuant to section 8 of P.L.1992, c.160 (C.26:2H-18.58) and to which payments were made prior to July 1, 1991 on behalf of patients receiving general public assistance. The State shall pay the inpatient hospitalization costs on the same basis as hospitals are reimbursed for charity care costs pursuant to section 7 of P.L. , c. (C. )(pending before the Legislature as this bill).

 

    15. R.S.43:21-7 is amended to read as follows:

    43:21-7. Contributions. Employers other than governmental entities, whose benefit financing provisions are set forth in section 4 of P.L.1971, c.346 (C.43:21-7.3), and those nonprofit organizations liable for payment in lieu of contributions on the basis set forth in section 3 of P.L.1971, c.346 (C.43:21-7.2), shall pay to the controller for the unemployment compensation fund, contributions as set forth in subsections (a), (b) and (c) hereof, and the provisions of subsections (d) and (e) shall be applicable to all employers, consistent with the provisions of the "unemployment compensation law" and the "Temporary Disability Benefits Law," P.L.1948, c.110 (C.43:21-25 et seq.).

    (a) Payment.

    (1) Contributions shall accrue and become payable by each employer for each calendar year in which he is subject to this chapter (R.S.43:21-1 et seq.), with respect to having individuals in his employ during that calendar year, at the rates and on the basis hereinafter set forth. Such contributions shall become due and be paid by each employer to the controller for the fund, in accordance with such regulations as may be prescribed, and shall not be deducted, in whole or in part, from the remuneration of individuals in his employ.

    (2) In the payment of any contributions, a fractional part of a cent shall be disregarded unless it amounts to $0.005 or more, in which case it shall be increased to $0.01.

    (b) Rate of contributions. Each employer shall pay the following contributions:

    (1) For the calendar year 1947, and each calendar year thereafter, 2 7/10% of wages paid by him during each such calendar year, except as otherwise prescribed by subsection (c) of this section.

    (2) The "wages" of any individual, with respect to any one employer, as the term is used in this subsection (b) and in subsections (c), (d) and (e) of this section 7, shall include the first $4,800.00 paid during calendar year 1975, for services performed either within or without this State; provided that no contribution shall be required by this State with respect to services performed in another state if such other state imposes contribution liability with respect thereto. If an employer (hereinafter referred to as a successor employer) during any calendar year acquires substantially all the property used in a trade or business of another employer (hereinafter referred to as a predecessor), or used in a separate unit of a trade or business of a predecessor, and immediately after the acquisition employs in his trade or business an individual who immediately prior to the acquisition was employed in the trade or business of such predecessor, then, for the purpose of determining whether the successor employer has paid wages with respect to employment equal to the first $4,800.00 paid during calendar year 1975, any wages paid to such individual by such predecessor during such calendar year and prior to such acquisition shall be considered as having been paid by such successor employer.

    (3) For calendar years beginning on and after January 1, 1976, the "wages" of any individual, as defined in the preceding paragraph (2) of this subsection (b), shall be established and promulgated by the Commissioner of Labor on or before September 1 of the preceding year and shall be 28 times the Statewide average weekly remuneration paid to workers by employers, as determined under R.S.43:21-3(c), raised to the next higher multiple of $100.00 if not already a multiple thereof, provided that if the amount of wages so determined for a calendar year is less than the amount similarly determined for the preceding year, the greater amount will be used; provided, further, that if the amount of such wages so determined does not equal or exceed the amount of wages as defined in subsection (b) of section 3306 of the Federal Unemployment Tax Act, Chapter 23 of the Internal Revenue Code of 1986 (26 U.S.C.§3306(b)), the wages as determined in this paragraph in any calendar year shall be raised to equal the amount established under the Federal Unemployment Tax Act for that calendar year.

    (c) Future rates based on benefit experience.

    (1) A separate account for each employer shall be maintained and this shall be credited with all the contributions which he has paid on his own behalf on or before January 31 of any calendar year with respect to employment occurring in the preceding calendar year; provided, however, that if January 31 of any calendar year falls on a Saturday or Sunday, an employer's account shall be credited as of January 31 of such calendar year with all the contributions which he has paid on or before the next succeeding day which is not a Saturday or Sunday. But nothing in this chapter (R.S.43:21-1 et seq.) shall be construed to grant any employer or individuals in his service prior claims or rights to the amounts paid by him into the fund either on his own behalf or on behalf of such individuals. Benefits paid with respect to benefit years commencing on and after January 1, 1953, to any individual on or before December 31 of any calendar year with respect to unemployment in such calendar year and in preceding calendar years shall be charged against the account or accounts of the employer or employers in whose employment such individual established base weeks constituting the basis of such benefits. Benefits paid under a given benefit determination shall be charged against the account of the employer to whom such determination relates. When each benefit payment is made, either a copy of the benefit check or other form of notification shall be promptly sent to the employer against whose account the benefits are to be charged. Such copy or notification shall identify the employer against whose account the amount of such payment is being charged, shall show at least the name and social security account number of the claimant and shall specify the period of unemployment to which said check applies. If the total amount of benefits paid to a claimant and charged to the account of the appropriate employer exceeds 50% of the total base year, base week wages paid to the claimant by that employer, then such employer shall have canceled from his account such excess benefit charges as specified above.

    Each employer shall be furnished an annual summary statement of benefits charged to his account.

    (2) Regulations may be prescribed for the establishment, maintenance, and dissolution of joint accounts by two or more employers, and shall, in accordance with such regulations and upon application by two or more employers to establish such an account, or to merge their several individual accounts in a joint account, maintain such joint account as if it constituted a single employer's account.

    (3) No employer's rate shall be lower than 5.4% unless assignment of such lower rate is consistent with the conditions applicable to additional credit allowance for such year under section 3303(a)(1) of the Internal Revenue Code of 1986 (26 U.S.C.§3303(a)(1)), any other provision of this section to the contrary notwithstanding.

    (4) Employer Reserve Ratio. (A) Each employer's rate shall be 2 8/10%, except as otherwise provided in the following provisions. No employer's rate for the 12 months commencing July 1 of any calendar year shall be other than 2 8/10%, unless as of the preceding January 31 such employer shall have paid contributions with respect to wages paid in each of the three calendar years immediately preceding such year, in which case such employer's rate for the 12 months commencing July 1 of any calendar year shall be determined on the basis of his record up to the beginning of such calendar year. If, at the beginning of such calendar year, the total of all his contributions, paid on his own behalf, for all past years exceeds the total benefits charged to his account for all such years, his contribution rate shall be:

    (1) 2 5/10%, if such excess equals or exceeds 4%, but less than 5%, of his average annual payroll (as defined in paragraph (2), subsection (a) of R.S.43:21-19);

    (2) 2 2/10%, if such excess equals or exceeds 5%, but is less than 6%, of his average annual payroll;

    (3) 1 9/10%, if such excess equals or exceeds 6%, but is less than 7%, of his average annual payroll;

    (4) 1 6/10%, if such excess equals or exceeds 7%, but is less than 8%, of his average annual payroll;

    (5) 1 3/10%, if such excess equals or exceeds 8%, but is less than 9%, of his average annual payroll;

    (6) 1%, if such excess equals or exceeds 9%, but is less than 10%, of his average annual payroll;

    (7) 7/10 of 1%, if such excess equals or exceeds 10%, but is less than 11%, of his average annual payroll;

    (8) 4/10 of 1%, if such excess equals or exceeds 11% of his average annual payroll.

    (B) If the total of an employer's contributions, paid on his own behalf, for all past periods for the purposes of this paragraph (4), is less than the total benefits charged against his account during the same period, his rate shall be:

    (1) 4%, if such excess is less than 10% of his average annual payroll;

    (2) 4 3/10%, if such excess equals or exceeds 10%, but is less than 20%, of his average annual payroll;

    (3) 4 6/10%, if such excess equals or exceeds 20% of his average annual payroll.

    (C) Specially assigned rates. If no contributions were paid on wages for employment in any calendar year used in determining the average annual payroll of an employer eligible for an assigned rate under this paragraph (4), the employer's rate shall be specially assigned as follows:

    (i) if the reserve balance in its account is positive, its assigned rate shall be the highest rate in effect for positive balance accounts for that period, or 5.4%, whichever is higher, and (ii) if the reserve balance in its account is negative, its assigned rate shall be the highest rate in effect for deficit accounts for that period.

    (D) The contribution rates prescribed by subparagraphs (A) and (B) of this paragraph (4) shall be increased or decreased in accordance with the provisions of paragraph (5) of this subsection (c) for experience rating periods through June 30, 1986.

    (5) (A) Unemployment Trust Fund Reserve Ratio. If on March 31 of any calendar year the balance in the unemployment trust fund equals or exceeds 4% but is less than 7% of the total taxable wages reported to the controller as of that date in respect to employment during the preceding calendar year, the contribution rate, effective July 1 following, of each employer eligible for a contribution rate calculation based upon benefit experience, shall be increased by 3/10 of 1% over the contribution rate otherwise established under the provisions of paragraph (3) or (4) of this subsection. If on March 31 of any calendar year the balance of the unemployment trust fund exceeds 2 1/2% but is less than 4% of the total taxable wages reported to the controller as of that date in respect to employment during the preceding calendar year, the contribution rate, effective July 1 following, of each employer eligible for a contribution rate calculation based upon benefit experience, shall be increased by 6/10 of 1% over the contribution rate otherwise established under the provisions of paragraph (3) or (4) of this subsection.

    If on March 31 of any calendar year the balance of the unemployment trust fund is less than 2 1/2% of the total taxable wages reported to the controller as of that date in respect to employment during the preceding calendar year, the contribution rate, effective July 1 following, of each employer (1) eligible for a contribution rate calculation based upon benefit experience, shall be increased by (i) 6/10 of 1% over the contribution rate otherwise established under the provisions of paragraph (3), (4)(A) or (4)(B) of this subsection, and (ii) an additional amount equal to 20% of the total rate established herein, provided, however, that the final contribution rate for each employer shall be computed to the nearest multiple of 1/10% if not already a multiple thereof; (2) not eligible for a contribution rate calculation based upon benefit experience, shall be increased by 6/10 of 1% over the contribution rate otherwise established under the provisions of paragraph (4) of this subsection. For the period commencing July 1, 1984 and ending June 30, 1986, the contribution rate for each employer liable to pay contributions under R.S.43:21-7 shall be increased by a factor of 10% computed to the nearest multiple of 1/10% if not already a multiple thereof.

    (B) If on March 31 of any calendar year the balance in the unemployment trust fund equals or exceeds 10% but is less than 12 1/2% of the total taxable wages reported to the controller as of that date in respect to employment during the preceding calendar year, the contribution rate, effective July 1 following, of each employer eligible for a contribution rate calculation based upon benefit experience, shall be reduced by 3/10 of 1% under the contribution rate otherwise established under the provisions of paragraphs (3) and (4) of this subsection; provided that in no event shall the contribution rate of any employer be reduced to less than 4/10 of 1%. If on March 31 of any calendar year the balance in the unemployment trust fund equals or exceeds 12 1/2% of the total taxable wages reported to the controller as of that date in respect to employment during the preceding calendar year, the contribution rate, effective July 1 following, of each employer eligible for a contribution rate calculation based upon benefit experience, shall be reduced by 6/10 of 1% if his account for all past periods reflects an excess of contributions paid over total benefits charged of 3% or more of his average annual payroll, otherwise by 3/10 of 1% under the contribution rate otherwise established under the provisions of paragraphs (3) and (4) of this subsection; provided that in no event shall the contribution rate of any employer be reduced to less than 4/10 of 1%.

    (C) The "balance" in the unemployment trust fund, as the term is used in subparagraphs (A) and (B) above, shall not include moneys credited to the State's account under section 903 of the Social Security Act, as amended (42 U.S.C.§1103), during any period in which such moneys are appropriated for the payment of expenses incurred in the administration of the "unemployment compensation law."

    (D) Prior to July 1 of each calendar year the controller shall determine the Unemployment Trust Reserve Ratio, which shall be calculated by dividing the balance of the unemployment trust fund as of the prior March 31 by total taxable wages reported to the controller by all employers as of March 31 with respect to their employment during the last calendar year.

    (E) With respect to experience rating years beginning on or after July 1, 1986, the new employer rate or the unemployment experience rate of an employer under this section shall be the rate which appears in the column headed by the Unemployment Trust Fund Reserve Ratio as of the applicable calculation date and on the line with the Employer Reserve Ratio, as defined in paragraph 4 of this subsection (R.S.43:21-7 (c)(4)), as set forth in the following table:

 

 EXPERIENCE RATING TAX TABLE

 

Fund Reserve Ratio1

 

                                           10.00%         7.00%           4.00%           2.50%           2.49%

Employer                           and               to                  to                  to                  and

Reserve                               Over            9.99%           6.99%           3.99%           Under

Ratio2                               A                   B                 C                 D                 E

 

Positive Reserve Ratio:

17% and over                     0.3                0.4                0.5                0.6                1.2

16.00% to 16.99%             0.4                0.5                0.6                0.6                1.2

15.00% to 15.99%             0.4                0.6                0.7                0.7                1.2

14.00% to 14.99%             0.5                0.6                0.7                0.8                1.2

13.00% to 13.99%             0.6                0.7                0.8                0.9                1.2

12.00% to 12.99%             0.6                0.8                0.9                1.0                1.2

11.00% to 11.99%             0.7                0.8                1.0                1.1                1.2

10.00% to 10.99%             0.9                1.1                1.3                1.5                1.6

9.00% to 9.99%                 1.0                1.3                1.6                1.7                1.9

8.00% to 8.99%                 1.3                1.6                1.9                2.1                2.3

7.00% to 7.99%                 1.4                1.8                2.2                2.4                2.6

6.00% to 6.99%                 1.7                2.1                2.5                2.8                3.0

5.00% to 5.99%                 1.9                2.4                2.8                3.1                3.4

4.00% to 4.99%                 2.0                2.6                3.1                3.4                3.7

3.00% to 3.99%                 2.1                2.7                3.2                3.6                3.9

2.00% to 2.99%                 2.2                2.8                3.3                3.7                4.0

1.00% to 1.99%                 2.3                2.9                3.4                3.8                4.1

0.00% to 0.99%                 2.4                3.0                3.6                4.0                4.3

Deficit Reserve Ratio:

-0.00% to -2.99%              3.4                4.3                5.1                5.6                6.1

-3.00% to -5.99%              3.4                4.3                5.1                5.7                6.2

-6.00% to -8.99%              3.5                4.4                5.2                5.8                6.3

-9.00% to-11.99%             3.5                4.5                5.3                5.9                6.4

-12.00%to-14.99%            3.6                4.6                5.4                6.0                6.5

-15.00%to-19.99%            3.6                4.6                5.5                6.1                6.6

-20.00%to-24.99%            3.7                4.7                5.6                6.2                6.7

-25.00%to-29.99%            3.7                4.8                5.6                6.3                6.8

-30.00%to-34.99%            3.8                4.8                5.7                6.3                6.9

-35.00% and under            5.4                5.4                5.8                6.4                7.0

New Employer Rate          2.8                2.8                2.8                3.1                3.4

     1Fund balance as of March 31 as a percentage of taxable wages in the prior calendar year.

     2Employer Reserve Ratio (Contributions minus benefits as a percentage of employer's taxable wages).

 

    (F) With respect to experience rating years beginning on or after July 1, 1986, if the balance of the unemployment trust fund as of the prior March 31 is negative, the contribution rate for each employer liable to pay contributions, as computed under subparagraph E of this paragraph (5), shall be increased by a factor of 10% computed to the nearest multiple of 1/10% if not already a multiple thereof.

    (G) On or after January 1, 1993, notwithstanding any other provisions of this paragraph (5), the contribution rate for each employer liable to pay contributions, as computed under subparagraph (E) of this paragraph (5), shall be decreased by 0.1%, except that, during any experience rating year in which the fund reserve ratio is equal to or greater than 7.00%, there shall be no decrease pursuant to this subparagraph (G) in the contribution of any employer who has a deficit reserve ratio of negative 35.00% or under.

    (H) On or after January 1, 1993 until December 31, 1993, notwithstanding any other provisions of this paragraph (5), the contribution rate for each employer liable to pay contributions, as computed under subparagraph (E) of this paragraph (5), shall be decreased by a factor of 52.0% computed to the nearest multiple of 1/10%, except that, if an employer has a deficit reserve ratio of negative 35.0% or under, the employer's rate of contribution shall not be reduced pursuant to this subparagraph (H) to less than 5.4%. The amount of the reduction in the employer contributions stipulated by this subparagraph (H) shall be in addition to the amount of the reduction in the employer contributions stipulated by subparagraph (G) of this paragraph (5), except that the rate of contribution of an employer who has a deficit reserve ratio of negative 35.0% or under shall not be reduced pursuant to this subparagraph (H) to less than 5.4% and the rate of contribution of any other employer shall not be reduced to less than 0.0%.

    On or after January 1, 1994 until December 31, 1995, except as provided pursuant to subparagraph (I) of this paragraph (5), notwithstanding any other provisions of this paragraph (5), the contribution rate for each employer liable to pay contributions, as computed under subparagraph (E) of this paragraph (5), shall be decreased by a factor of 36.0% computed to the nearest multiple of 1/10%, except that, if an employer has a deficit reserve ratio of negative 35.0% or under, the employer's rate of contribution shall not be reduced pursuant to this subparagraph (H) to less than 5.4%. The amount of the reduction in the employer contributions stipulated by this subparagraph (H) shall be in addition to the amount of the reduction in the employer contributions stipulated by subparagraph (G) of this paragraph (5), except that the rate of contribution of an employer who has a deficit reserve ratio of negative 35.0% or under shall not be reduced pursuant to this subparagraph (H) to less than 5.4% and the rate of contribution of any other employer shall not be reduced to less than 0.0%.

    On or after January 1, 1996 until December 31, 1996, the contribution rate for each employer liable to pay contributions, as computed under subparagraph (E) of this paragraph (5), shall be decreased by a factor of 20.0% computed to the nearest multiple of 1/10%, except that, if an employer has a deficit reserve ratio of negative 35.0% or under, the employer's rate of contribution shall not be reduced pursuant to this subparagraph (H) to less than 5.4%. The amount of the reduction in the employer contributions stipulated by this subparagraph (H) shall be in addition to the amount of the reduction in the employer contributions stipulated by subparagraph (G) of this paragraph (5), except that the rate of contribution of an employer who has a deficit reserve ratio of negative 35.0% or under shall not be reduced pursuant to this subparagraph (H) to less than 5.4% and the rate of contribution of any other employer shall not be reduced to less than 0.0%.

    On or after January 1, 1997 until December 31, 1997, the contribution rate for each employer liable to pay contributions, as computed under subparagraph (E) of this paragraph (5), shall be decreased by a factor of 19.0% computed to the nearest multiple of 1/10%, except that, if an employer has a deficit reserve ratio of negative 35.0% or under, the employer's rate of contribution shall not be reduced pursuant to this subparagraph (H) to less than 5.4%. The amount of the reduction in the employer contributions stipulated by this subparagraph (H) shall be in addition to the amount of the reduction in the employer contributions stipulated by subparagraph (G) of this paragraph (5), except that the rate of contribution of an employer who has a deficit reserve ratio of negative 35.0% or under shall not be reduced pursuant to this subparagraph (H) to less than 5.4% and the rate of contribution of any other employer shall not be reduced to less than 0.0%.

    (I) If the fund reserve ratio decreases to a level of less than 4.00% on March 31 of calendar year 1994 or calendar year 1995, the provisions of subparagraph (H) of this paragraph (5) shall cease to be in effect as of July 1 of that calendar year.

    If, upon calculating the unemployment compensation fund reserve ratio pursuant to R.S.43:21-7(c)(5)(D) prior to July 1, 1997, the controller finds that the fund reserve ratio has decreased to a level of less than 4.00%, the Commissioner of Labor shall notify the State Treasurer of this fact and of the dollar amount necessary to bring the fund reserve ratio up to a level of 4.00%. The State Treasurer shall, prior to July 1, 1997, transfer from the General Fund to the unemployment compensation fund, revenues in the amount specified by the commissioner and which, upon deposit in the unemployment compensation fund, shall result, upon recalculation, in a fund reserve ratio used to determine employer contributions beginning July 1, 1997 of at least 4.00%.

    If, upon calculating the unemployment compensation fund reserve ratio pursuant to R.S.43:21-7(c)(5)(D) prior to July 1, 1998, the controller finds that the fund reserve ratio has decreased to a level of less than 4.00%, the Commissioner of Labor shall notify the State Treasurer of this fact and of the dollar amount necessary to bring the fund reserve ratio up to a level of 4.00%. The State Treasurer shall, prior to July 1, 1998, transfer from the General Fund to the unemployment compensation fund, revenues in the amount specified by the commissioner and which, upon deposit in the unemployment compensation fund, shall result, upon recalculation, in a fund reserve ratio used to determine employer contributions beginning July 1, 1998 of at least 4.00%.

    (6) Additional contributions.

    Notwithstanding any other provision of law, any employer who has been assigned a contribution rate pursuant to subsection (c) of this section for the year commencing July 1, 1948, and for any year commencing July 1 thereafter, may voluntarily make payment of additional contributions, and upon such payment shall receive a recomputation of the experience rate applicable to such employer, including in the calculation the additional contribution so made. Any such additional contribution shall be made during the 30-day period following the date of the mailing to the employer of the notice of his contribution rate as prescribed in this section, unless, for good cause, the time for payment has been extended by the controller for not to exceed an additional 60 days; provided that in no event may such payments which are made later than 120 days after the beginning of the year for which such rates are effective be considered in determining the experience rate for the year in which the payment is made. Any employer receiving any extended period of time within which to make such additional payment and failing to make such payment timely shall be, in addition to the required amount of additional payment, a penalty of 5% thereof or $5.00, whichever is greater, not to exceed $50.00. Any adjustment under this subsection shall be made only in the form of credits against accrued or future contributions.

    (7) Transfers.

    (A) Upon the transfer of the organization, trade or business, or substantially all the assets of an employer to a successor in interest, whether by merger, consolidation, sale, transfer, descent or otherwise, the controller shall transfer the employment experience of the predecessor employer to the successor in interest, including credit for past years, contributions paid, annual payrolls, benefit charges, et cetera, applicable to such predecessor employer, pursuant to regulation, if it is determined that the employment experience of the predecessor employer with respect to the organization, trade, assets or business which has been transferred may be considered indicative of the future employment experience of the successor in interest. Unless the predecessor employer was owned or controlled (by legally enforceable means or otherwise), directly or indirectly, by the successor in interest, or the predecessor employer and the successor in interest were owned or controlled (by legally enforceable means or otherwise), directly or indirectly, by the same interest or interests, the transfer of the employment experience of the predecessor shall not be effective if such successor in interest, within four months of the date of such transfer of the organization, trade, assets or business, or thereafter upon good cause shown, files a written notice protesting the transfer of the employment experience of the predecessor employer.

    (B) An employer who transfers part of his or its organization, trade, assets or business to a successor in interest, whether by merger, consolidation, sale, transfer, descent or otherwise, may jointly make application with such successor in interest for transfer of that portion of the employment experience of the predecessor employer relating to the portion of the organization, trade, assets or business transferred to the successor in interest, including credit for past years, contributions paid, annual payrolls, benefit charges, et cetera, applicable to such predecessor employer. The transfer of employment experience may be allowed pursuant to regulation only if it is found that the employment experience of the predecessor employer with respect to the portion of the organization, trade, assets or business which has been transferred may be considered indicative of the future employment experience of the successor in interest. Credit shall be given to the successor in interest only for the years during which contributions were paid by the predecessor employer with respect to that part of the organization, trade, assets or business transferred.

    (C) A transfer of the employment experience in whole or in part having become final, the predecessor employer thereafter shall not be entitled to consideration for an adjusted rate based upon his or its experience or the part thereof, as the case may be, which has thus been transferred. A successor in interest to whom employment experience or a part thereof is transferred pursuant to this subsection shall, as of the date of the transfer of the organization, trade, assets or business, or part thereof, immediately become an employer if not theretofore an employer subject to this chapter (R.S.43:21-1 et seq.).

    (d) Contributions of workers to the unemployment compensation fund and the State disability benefits fund.

    (1) (A) For periods after January 1, 1975, each worker shall contribute to the fund 1% of his wages with respect to his employment with an employer, which occurs on and after January 1, 1975, after such employer has satisfied the condition set forth in subsection (h) of R.S.43:21-19 with respect to becoming an employer; provided, however, that such contributions shall be at the rate of 1/2 of 1% of wages paid with respect to employment while the worker is in the employ of the State of New Jersey, or any governmental entity or instrumentality which is an employer as defined under R.S.43:21-19(h)(5), or is covered by an approved private plan under the "Temporary Disability Benefits Law" or while the worker is exempt from the provisions of the "Temporary Disability Benefits Law" under section 7 of that law, P.L.1948, c.110 (C.43:21-31).

    (B) Effective January 1, 1978 there shall be no contributions by workers in the employ of any governmental or nongovernmental employer electing or required to make payments in lieu of contributions unless the employer is covered by the State plan under the "Temporary Disability Benefits Law" (C.43:21-37 et seq.), and in that case contributions shall be at the rate of 1/2 of 1%, except that commencing July 1, 1986, workers in the employ of any nongovernmental employer electing or required to make payments in lieu of contributions shall be required to make contributions to the fund at the same rate prescribed for workers of other nongovernmental employers.

    (C) (i) Notwithstanding the above provisions of this paragraph (1), during the period starting July 1, 1986 and ending December 31, 1992, each worker shall contribute to the fund 1.125% of wages paid with respect to his employment with a governmental employer electing or required to pay contributions or nongovernmental employer, including a nonprofit organization which is an employer as defined under R.S.43:21-19(h)(6), regardless of whether that nonprofit organization elects or is required to finance its benefit costs with contributions to the fund or by payments in lieu of contributions, after that employer has satisfied the conditions set forth in subsection R.S.43:21-19(h) with respect to becoming an employer. Contributions, however, shall be at the rate of 0.625% while the worker is covered by an approved private plan under the "Temporary Disability Benefits Law" while the worker is exempt under section 7 of that law, P.L.1948, c.110 (C.43:21-31) or any other provision of that law; provided that such contributions shall be at the rate of 0.625% of wages paid with respect to employment with the State of New Jersey or any other governmental entity or instrumentality electing or required to make payments in lieu of contributions and which is covered by the State plan under the "Temporary Disability Benefits Law," except that, while the worker is exempt from the provisions of the "Temporary Disability Benefits Law" under section 7 of that law, P.L.1948, c.110 (C.43:21-31) or any other provision of that law, or is covered for disability benefits by an approved private plan of the employer, the contributions to the fund shall be 0.125%.

    (ii) (Deleted by amendment, P.L.1995, c.422.)

    (D) Notwithstanding any other provisions of this paragraph (1), during the period starting January 1, 1993 and ending June 30, 1994, each worker shall contribute to the unemployment compensation fund 0.5% of wages paid with respect to the worker's employment with a governmental employer electing or required to pay contributions or nongovernmental employer, including a nonprofit organization which is an employer as defined under paragraph 6 of subsection (h) of R.S.43:21-19, regardless of whether that nonprofit organization elects or is required to finance its benefit costs with contributions to the fund or by payments in lieu of contributions, after that employer has satisfied the conditions set forth in subsection (h) of R.S.43:21-19 with respect to becoming an employer. No contributions, however, shall be made by the worker while the worker is covered by an approved private plan under the "Temporary Disability Benefits Law," P.L.1948, c.110 (C.43:21-25 et seq.) or while the worker is exempt under section 7 of P.L.1948, c.110 (C.43:21-31) or any other provision of that law; provided that the contributions shall be at the rate of 0.50% of wages paid with respect to employment with the State of New Jersey or any other governmental entity or instrumentality electing or required to make payments in lieu of contributions and which is covered by the State plan under the "Temporary Disability Benefits Law," except that, while the worker is exempt from the provisions of the "Temporary Disability Benefits Law" under section 7 of that law, P.L.1948, c.110 (C.43:21-31) or any other provision of that law, or is covered for disability benefits by an approved private plan of the employer, no contributions shall be made to the fund.

    Each worker shall, starting on January 1, 1996 and ending December 31, 1996, contribute to the unemployment compensation fund [0.60%] 0.48% of wages paid with respect to the worker's employment with a governmental employer electing or required to pay contributions or nongovernmental employer, including a nonprofit organization which is an employer as defined under paragraph 6 of subsection (h) of R.S.43:21-19, regardless of whether that nonprofit organization elects or is required to finance its benefit costs with contributions to the fund or by payments in lieu of contributions, after that employer has satisfied the conditions set forth in subsection (h) of R.S.43:21-19 with respect to becoming an employer, provided that the contributions shall be at the rate of 0.10% of wages paid with respect to employment with the State of New Jersey or any other governmental entity or instrumentality electing or required to make payments in lieu of contributions.

    Each worker shall, starting on January 1, 1997 and ending December 31, 1997, contribute to the unemployment compensation fund 0.49% of wages paid with respect to the worker's employment with a governmental employer electing or required to pay contributions or nongovernmental employer, including a nonprofit organization which is an employer as defined under paragraph 6 of subsection (h) of R.S.43:21-19, regardless of whether that nonprofit organization elects or is required to finance its benefit costs with contributions to the unemployment compensation fund or by payments in lieu of contributions, after that employer has satisfied the conditions set forth in subsection (h) of R.S.43:21-19 with respect to becoming an employer, provided that the contributions shall be at the rate of 0.10% of wages paid with respect to employment with the State of New Jersey or any other governmental entity or instrumentality electing or required to make payments in lieu of contributions.

    On and after January 1,1998, each worker shall contribute to the unemployment compensation fund 0.60% of wages paid with respect to the worker's employment with a governmental employer electing or required to pay contributions or nongovernmental employer, including a nonprofit organization which is an employer as defined under paragraph 6 of subsection (h) of R.S.43:21-19, regardless of whether that nonprofit organization elects or is required to finance its benefit costs with contributions to the unemployment compensation fund or by payments in lieu of contributions, after that employer has satisfied the conditions set forth in subsection (h) of R.S.43:21-19 with respect to becoming an employer, provided that the contributions shall be at the rate of 0.10% of wages paid with respect to employment with the State of New Jersey or any other governmental entity or instrumentality electing or required to make payments in lieu of contributions.

    (E) Each employer shall, notwithstanding any provision of law in this State to the contrary, withhold in trust the amount of his workers' contributions from their wages at the time such wages are paid, shall show such deduction on his payroll records, shall furnish such evidence thereof to his workers as the division or controller may prescribe, and shall transmit all such contributions, in addition to his own contributions, to the office of the controller in such manner and at such times as may be prescribed. If any employer fails to deduct the contributions of any of his workers at the time their wages are paid, or fails to make a deduction therefor at the time wages are paid for the next succeeding payroll period, he alone shall thereafter be liable for such contributions, and for the purpose of R.S.43:21-14, such contributions shall be treated as employer's contributions required from him.

    (F) As used in this chapter (R.S.43:21-1 et seq.), except when the context clearly requires otherwise, the term "contributions" shall include the contributions of workers pursuant to this section.

    (G) Each worker shall, starting on July 1, 1994, contribute to the State disability benefits fund an amount equal to 0.50% of wages paid with respect to the worker's employment with a government employer electing or required to pay contributions to the State disability benefits fund or nongovernmental employer, including a nonprofit organization which is an employer as defined under paragraph 6 of subsection (h) of R.S.43:21-19, unless the employer is covered by an approved private disability plan or is exempt from the provisions of the "Temporary Disability Benefits Law," P.L.1948 c.110 (C.43:21-25 et seq.) under section 7 of that law (C.43:21-31) or any other provision of that law.

    (2) (A) (Deleted by amendment, P.L.1984, c.24.)

    (B) (Deleted by amendment, P.L.1984, c.24.)

    (C) (Deleted by amendment, P.L.1994, c.112.)

    (D) (Deleted by amendment, P.L.1994, c.112.)

    (E) (i) (Deleted by amendment, P.L.1994, c.112.)

    (ii) [Notwithstanding any other provision of this paragraph (2), with respect to wages paid during the period beginning on January 1, 1993 and ending June 30, 1994, there shall be deposited in and credited to the State disability benefits fund all worker contributions received by the controller.](Deleted by amendment, P.L. , c. ).

    (iii) (Deleted by amendment, P.L.1994, c.112.)

    (3) If an employee receives wages from more than one employer during any calendar year, and either the sum of his contributions deposited in and credited to the State disability benefits fund [(in accordance with paragraph (2) of this subsection)] plus the amount of his contributions, if any, required towards the costs of benefits under one or more approved private plans under the provisions of section 9 of the "Temporary Disability Benefits Law" (C.43:21-33) and deducted from his wages, or the sum of such latter contributions, if the employee is covered during such calendar year only by two or more private plans, exceeds an amount equal to 1/2 of 1% of the "wages" determined in accordance with the provisions of R.S.43:21-7(b)(3) during the calendar years beginning on or after January 1, 1976, the employee shall be entitled to a refund of the excess if he makes a claim to the controller within two years after the end of the calendar year in which the wages are received with respect to which the refund is claimed and establishes his right to such refund. Such refund shall be made by the controller from the State disability benefits fund. No interest shall be allowed or paid with respect to any such refund. The controller shall, in accordance with prescribed regulations, determine the portion of the aggregate amount of such refunds made during any calendar year which is applicable to private plans for which deductions were made under section 9 of the "Temporary Disability Benefits Law," such determination to be based upon the ratio of the amount of such wages exempt from contributions to such fund, as provided in subparagraph (B) of paragraph (1) of this subsection with respect to coverage under private plans, to the total wages so exempt plus the amount of such wages subject to contributions to the disability benefits fund, as provided in subparagraph [(B)](G) of paragraph [(2)](1) of this subsection. The controller shall, in accordance with prescribed regulations, prorate the amount so determined among the applicable private plans in the proportion that the wages covered by each plan bear to the total private plan wages involved in such refunds, and shall assess against and recover from the employer, or the insurer if the insurer has indemnified the employer with respect thereto, the amount so prorated. The provisions of R.S.43:21-14 with respect to collection of employer contributions shall apply to such assessments. The amount so recovered by the controller shall be paid into the State disability benefits fund.

    (4) If an individual does not receive any wages from the employing unit which for the purposes of this chapter (R.S.43:21-1 et seq.) is treated as his employer, or receives his wages from some other employing unit, such employer shall nevertheless be liable for such individual's contributions in the first instance; and after payment thereof such employer may deduct the amount of such contributions from any sums payable by him to such employing unit, or may recover the amount of such contributions from such employing unit, or, in the absence of such an employing unit, from such individual, in a civil action; provided proceedings therefor are instituted within three months after the date on which such contributions are payable. General rules shall be prescribed whereby such an employing unit may recover the amount of such contributions from such individuals in the same manner as if it were the employer.

    (5) Every employer who has elected to become an employer subject to this chapter (R.S.43:21-1 et seq.), or to cease to be an employer subject to this chapter (R.S.43:21-1 et seq.), pursuant to the provisions of R.S.43:21-8, shall post and maintain printed notices of such election on his premises, of such design, in such numbers, and at such places as the director may determine to be necessary to give notice thereof to persons in his service.

    (6) Contributions by workers, payable to the controller as herein provided, shall be exempt from garnishment, attachment, execution, or any other remedy for the collection of debts.

    (e) Contributions by employers to State disability benefits fund.

    (1) Except as hereinafter provided, each employer shall, in addition to the contributions required by subsections (a), (b), and (c) of this section, contribute 1/2 of 1% of the wages paid by such employer to workers with respect to employment unless he is not a covered employer as defined in section 3 of the "Temporary Disability Benefits Law" (C.43:21-27 (a)), except that the rate for the State of New Jersey shall be 1/10 of 1% for the calendar year 1980 and for the first six months of 1981. Prior to July 1, 1981 and prior to July 1 each year thereafter, the controller shall review the experience accumulated in the account of the State of New Jersey and establish a rate for the next following fiscal year which, in combination with worker contributions, will produce sufficient revenue to keep the account in balance; except that the rate so established shall not be less than 1/10 of 1%. Such contributions shall become due and be paid by the employer to the controller for the State disability benefits fund as established by law, in accordance with such regulations as may be prescribed, and shall not be deducted, in whole or in part, from the remuneration of individuals in his employ. In the payment of any contributions, a fractional part of a cent shall be disregarded unless it amounts to $0.005 or more, in which case it shall be increased to $0.01.

    (2) During the continuance of coverage of a worker by an approved private plan of disability benefits under the "Temporary Disability Benefits Law," the employer shall be exempt from the contributions required by subparagraph (1) above with respect to wages paid to such worker.

    (3) (A) The rates of contribution as specified in subparagraph (1) above shall be subject to modification as provided herein with respect to employer contributions due on and after July 1, 1951.

    (B) A separate disability benefits account shall be maintained for each employer required to contribute to the State disability benefits fund and such account shall be credited with contributions deposited in and credited to such fund with respect to employment occurring on and after January 1, 1949. Each employer's account shall be credited with all contributions paid on or before January 31 of any calendar year on his own behalf and on behalf of individuals in his service with respect to employment occurring in preceding calendar years; provided, however, that if January 31 of any calendar year falls on a Saturday or Sunday an employer's account shall be credited as of January 31 of such calendar year with all the contributions which he has paid on or before the next succeeding day which is not a Saturday or Sunday. But nothing in this act shall be construed to grant any employer or individuals in his service prior claims or rights to the amounts paid by him to the fund either on his own behalf or on behalf of such individuals. Benefits paid to any covered individual in accordance with Article III of the "Temporary Disability Benefits Law" on or before December 31 of any calendar year with respect to disability in such calendar year and in preceding calendar years shall be charged against the account of the employer by whom such individual was employed at the commencement of such disability or by whom he was last employed, if out of employment.

    (C) The controller may prescribe regulations for the establishment, maintenance, and dissolution of joint accounts by two or more employers, and shall, in accordance with such regulations and upon application by two or more employers to establish such an account, or to merge their several individual accounts in a joint account, maintain such joint account as if it constituted a single employer's account.

    (D) Prior to July 1 of each calendar year, the controller shall make a preliminary determination of the rate of contribution for the 12 months commencing on such July 1 for each employer subject to the contribution requirements of this subsection (e).

    (1) Such preliminary rate shall be 1/2 of 1% unless on the preceding January 31 of such year such employer shall have been a covered employer who has paid contributions to the State disability benefits fund with respect to employment in the three calendar years immediately preceding such year.

    (2) If the minimum requirements in (1) above have been fulfilled and the credited contributions exceed the benefits charged by more than $500.00, such preliminary rate shall be as follows:

    (i) 2/10 of 1% if such excess over $500.00 exceeds 1% but is less than 1 1/4% of his average annual payroll (as defined in this chapter (R.S.43:21-1 et seq.));

    (ii) 15/100 of 1% if such excess over $500.00 equals or exceeds 1 1/4% but is less than 1 1/2% of his average annual payroll;

    (iii) 1/10 of 1% if such excess over $500.00 equals or exceeds 1 1/2% of his average annual payroll.

    (3) If the minimum requirements in (1) above have been fulfilled and the contributions credited exceed the benefits charged but by not more than $500.00 plus 1% of his average annual payroll, or if the benefits charged exceed the contributions credited but by not more than $500.00, the preliminary rate shall be 1/4 of 1%.

    (4) If the minimum requirements in (1) above have been fulfilled and the benefits charged exceed the contributions credited by more than $500.00, such preliminary rate shall be as follows:

    (i) 35/100 of 1% if such excess over $500.00 is less than 1/4 of 1% of his average annual payroll;

    (ii) 45/100 of 1% if such excess over $500.00 equals or exceeds 1/4 of 1% but is less than 1/2 of 1% of his average annual payroll;

    (iii) 55/100 of 1% if such excess over $500.00 equals or exceeds 1/2 of 1% but is less than 3/4 of 1% of his average annual payroll;

    (iv) 65/100 of 1% if such excess over $500.00 equals or exceeds 3/4 of 1% but is less than 1% of his average annual payroll;

    (v) 75/100 of 1% if such excess over $500.00 equals or exceeds 1% of his average annual payroll.

    (5) Determination of the preliminary rate as specified in (2), (3) and (4) above shall be subject, however, to the condition that it shall in no event be decreased by more than 1/10 of 1% of wages or increased by more than 2/10 of 1% of wages from the preliminary rate determined for the preceding year in accordance with (1), (2), (3) or (4), whichever shall have been applicable.

    (E) (1) Prior to July 1 of each calendar year the controller shall determine the amount of the State disability benefits fund as of December 31 of the preceding calendar year, increased by the contributions paid thereto during January of the current calendar year with respect to employment occurring in the preceding calendar year. If such amount exceeds the net amount withdrawn from the unemployment trust fund pursuant to section 23 of the "Temporary Disability Benefits Law," P.L.1948, c.110 (C.43:21-47) plus the amount at the end of such preceding calendar year of the unemployment disability account (as defined in section 22 of said law (C.43:21-46)), such excess shall be expressed as a percentage of the wages on which contributions were paid to the State disability benefits fund on or before January 31 with respect to employment in the preceding calendar year.

    (2) The controller shall then make a final determination of the rates of contribution for the 12 months commencing July 1 of such year for employers whose preliminary rates are determined as provided in (D) hereof, as follows:

    (i) If the percentage determined in accordance with paragraph (E)(1) of this subsection equals or exceeds 1 1/4%, the final employer rates shall be the preliminary rates determined as provided in (D) hereof, except that if the employer's preliminary rate is determined as provided in (D)(2) or (D)(3) hereof, the final employer rate shall be the preliminary employer rate decreased by such percentage of excess taken to the nearest 5/100 of 1%, but in no case shall such final rate be less than 1/10 of 1%.

    (ii) If the percentage determined in accordance with paragraph (E)(1) of this subsection equals or exceeds 3/4 of 1% and is less than 1 1/4 of 1%, the final employer rates shall be the preliminary employer rates.

    (iii) If the percentage determined in accordance with paragraph (E)(1) of this subsection is less than 3/4 of 1%, but in excess of 1/4 of 1%, the final employer rates shall be the preliminary employer rates determined as provided in (D) hereof increased by the difference between 3/4 of 1% and such percentage taken to the nearest 5/100 of 1%; provided, however, that no such final rate shall be more than 1/4 of 1% in the case of an employer whose preliminary rate is determined as provided in (D)(2) hereof, more than 1/2 of 1% in the case of an employer whose preliminary rate is determined as provided in (D)(1) and (D)(3) hereof, nor more than 3/4 of 1% in the case of an employer whose preliminary rate is determined as provided in (D)(4) hereof.

    (iv) If the amount of the State disability benefits fund determined as provided in paragraph (E)(1) of this subsection is equal to or less than 1/4 of 1%, then the final rate shall be 2/5 of 1% in the case of an employer whose preliminary rate is determined as provided in (D)(2) hereof, 7/10 of 1% in the case of an employer whose preliminary rate is determined as provided in (D)(1) and (D)(3) hereof, and 1.1% in the case of an employer whose preliminary rate is determined as provided in (D)(4) hereof. Notwithstanding any other provision of law or any determination made by the controller with respect to any 12-month period commencing on July 1, 1970, the final rates for all employers for the period beginning January 1, 1971, shall be as set forth herein.

(cf: P.L.1995, c.422, s.1)

 

    16. Section 29 of P.L.1992, c.160 (C.43:21-7b) is amended to read as follows:

    29. a. Beginning January 1, 1993 until December 31, 1995, except as provided pursuant to subsection b. of this section, each employee shall, in such a manner and at such times as determined by the commissioner, contribute to the fund an amount equal to 0.6% of the employee's taxable wages.

    Beginning January 1, 1996 until December 31, 1996, each employee shall, in such a manner and at such times as determined by the commissioner, contribute to the fund an amount equal to 0.12% of the employee's taxable wages.

    Beginning January 1, 1997 until December 31, 1997, each employee shall, in such a manner and at such times as determined by the commissioner, contribute to the fund an amount equal to 0.11% of the employee's taxable wages.                   

    Also beginning on January 1, 1993 until [December 31, 1995, except as provided pursuant to subsection b. of this section] December 31, 1997, each employer shall, in such a manner and at such times as determined by the commissioner, contribute to the fund an amount equal to the amount that the employer's contribution to the unemployment compensation fund is decreased pursuant to subparagraph (H) of paragraph (5) of subsection (c) of R.S.43:21-7.

    b. If the unemployment compensation fund reserve ratio, as determined pursuant to paragraph (5) of subsection (c) of R.S.43:21-7, decreases to a level of less than 4.00% on March 31 of calendar year 1994 or calendar year 1995, the provisions of subsection a. of this section shall cease to be in effect as of July 1 of that calendar year and each employer who would be subject to making the contributions pursuant to subsection a. of this section if that subsection were in effect shall, beginning on July 1 of that calendar year, contribute to the fund an amount equal to 0.62% of the total wages paid by the employer and shall continue to contribute that amount until December 31, 1995.

    c. If the total amount of contributions to the fund pursuant to this section during the calendar year 1993 exceeds $600 million, all contributions which exceed $600 million shall be deposited in the unemployment compensation fund. If the total amount of contributions to the fund pursuant to this section during calendar year 1994 or calendar year 1995 exceeds $500 million, all contributions which exceed $500 million shall be deposited in the unemployment compensation fund. If the total amount of contributions made to the fund pursuant to this section for the calendar year 1996 exceeds $325 million, all contributions which exceed $325 million in a calendar year shall be deposited in the unemployment compensation fund. If the total amount of contributions made to the fund pursuant to this section for the calendar year 1997 exceeds $300 million, all contributions which exceed $300 million shall be deposited in the unemployment compensation fund.

    d. All necessary administrative costs related to the collection of contributions pursuant to this section shall be paid from the contributions.

(cf: P.L.1992, c.160, s.29)

 

    17. Section 32 of P.L.1992, c.160 (C.43:21-7e) is amended to read as follows:

    32. a. If an employee receives wages from more than one employer during any calendar year, and the sum of the employee's contributions deposited in the fund exceeds an amount equal to 0.6% of the wages determined in accordance with the provisions of paragraph (3) of subsection (b) of R.S.43:21-7 during calendar year 1993, calendar year 1994 or calendar year 1995, the employee shall be entitled to a refund of the excess if a claim establishing the employee's right to the refund is made within two years after the end of the respective calendar year in which the wages are received and are the subject of the claim. The commissioner shall refund any overpayment from the fund without interest.

    If an employee receives wages from more than one employer during calendar year 1996, and the sum of the employee's contributions deposited in the fund exceeds an amount equal to 0.12% of the wages determined in accordance with the provisions of paragraph (3) of subsection (b) of R.S.43:21-7 during calendar year 1996, the employee shall be entitled to a refund of the excess if a claim establishing the employee's right to the refund is made within two years after the end of the respective calendar year in which the wages are received and are the subject of the claim. The commissioner shall refund any overpayment from the fund without interest.

    If an employee receives wages from more than one employer during calendar year 1997, and the sum of the employee's contributions deposited in the fund exceeds an amount equal to 0.11% of the wages determined in accordance with the provisions of paragraph (3) of subsection (b) of R.S.43:21-7 during calendar year 1997, the employee shall be entitled to a refund of the excess if a claim establishing the employee's right to the refund is made within two years after the end of the respective calendar year in which the wages are received and are the subject of the claim. The commissioner shall refund any overpayment from the fund without interest.

    b. Any employee who is a taxpayer and entitled, pursuant to the provisions of subsection a. of this section, to a refund of contributions deducted during a tax year from his wages shall, in lieu of the refund, be entitled to a credit in the full amount thereof against the tax otherwise due on his New Jersey gross income for that tax year if he submits his claim for the credit and accompanies that claim with evidence of his right to the credit in the manner provided by regulation by the Director of the Division of Taxation. In any case in which the amount, or any portion thereof, of any credit allowed hereunder results in or increases an excess of income tax payment over income tax liability, the amount of the new or increased excess shall be considered an overpayment and shall be refunded to the taxpayer in the manner provided by subsection (a) of N.J.S.54A:9-7.

(cf: P.L.1992, c.160, s.32)

 

    18. Section 4 of P.L.1971, c.346 (C.43:21-7.3) is amended to read as follows:

    4. (a) Notwithstanding any other provisions of the "unemployment compensation law" for the payment of contributions, benefits paid to individuals based upon wages earned in the employ of any governmental entity or instrumentality which is an employer defined under R.S.43:21-19(h)(5) shall, to the extent that such benefits are chargeable to the account of such governmental entity or instrumentality in accordance with the provisions of R.S.43:21-1 et seq., be financed by payments in lieu of contributions.

    (b) Any governmental entity or instrumentality may, as an alternative to financing benefits by payments in lieu of contributions, elect to pay contributions beginning with the date on which its subjectivity begins by filing written notice of its election with the department no later than 120 days after such subjectivity begins, provided that such election shall be effective for at least two full calendar years; or it may elect to pay contributions for a period of not less than two calendar years beginning January 1 of any year if written notice of such election is filed with the department not later than February 1 of such year; provided, further, that such governmental entity or instrumentality shall remain liable for payments in lieu of contributions with respect to all benefits paid based on base year wages earned in the employ of such entity or instrumentality in the period during which it financed its benefits by payments in lieu of contributions.

    (c) Any governmental entity or instrumentality may terminate its election to pay contributions as of January 1 of any year by filing written notice not later than February 1 of any year with respect to which termination is to become effective. It may not revert to a contributions method of financing for at least two full calendar years after such termination.

    (d) Any governmental entity or instrumentality electing the option for contributions financing shall report and pay contributions in accordance with the provisions of R.S.43:21-7 except that, notwithstanding the provisions of that section, the contribution rate for such governmental entity or instrumentality shall be 1% for the entire calendar year 1978 and the contribution rate for any subsequent calendar years shall be the rate established for governmental entities or instrumentalities under subsection (e) of this section.

    (e) On or before September 1 of each year, the Commissioner of Labor shall review the composite benefit cost experience of all governmental entities and instrumentalities electing to pay contributions and, on the basis of that experience, establish the contribution rate for the next following calendar year which can be expected to yield sufficient revenue in combination with worker contributions to equal or exceed the projected costs for that calendar year.

    (f) Any covered governmental entity or instrumentality electing to pay contributions shall each year appropriate, out of its general funds, moneys to pay the projected costs of benefits at the rate determined under subsection (e) of this section. These funds shall be held in a trust fund maintained by the governmental entity for this purpose. Any surplus remaining in this trust fund may be retained in reserve for payment of benefit costs for subsequent years either by contributions or payments in lieu of contributions.

    (g) Any governmental entity or instrumentality electing to finance benefit costs with payments in lieu of contributions shall pay into the fund an amount equal to all benefit costs for which it is liable pursuant to the provisions of the "unemployment compensation law." Each subject governmental entity or instrumentality shall require payments from its workers in the same manner and amount as prescribed under R.S.43:21-7(d) for governmental entities and instrumentalities financing their benefit costs with contributions. No such payment shall be used for a purpose other than to meet the benefits liability of such governmental entity or instrumentality. In addition, each subject governmental entity or instrumentality shall appropriate out of its general funds sufficient moneys which, in addition to any worker payments it requires, are necessary to pay its annual benefit costs estimated on the basis of its past benefit cost experience; provided that for its first year of coverage, its benefit costs shall be deemed to require an appropriation equal to 1% of the projected total of its taxable wages for the year. These appropriated moneys and worker payments shall be held in a trust fund maintained by the governmental entity or instrumentality for this purpose. Any surplus remaining in this trust fund shall be retained in reserve for payment of benefit costs in subsequent years. If a governmental entity or instrumentality requires its workers to make payments as authorized herein, such workers shall not be subject to the contributions required in R.S.43:21-7(d).

    (h) Notwithstanding the provisions of the above subsection (g), commencing July 1, 1986 worker contributions to the unemployment trust fund with respect to wages paid by any governmental entity or instrumentality electing or required to make payments in lieu of contributions, including the State of New Jersey, shall be made in accordance with the provisions of R.S.43:21-7(d)(1)(C) or R.S.43:21-7(d)(1)(D), as applicable, and, in addition, each governmental entity or instrumentality electing or required to make payments in lieu of contributions shall, except during the period starting January 1, 1993 and ending December 31, 1995 or, if the unemployment compensation fund reserve ratio, as determined pursuant to paragraph (5) of subsection (c) of R.S.43:21-7, decreases to a level of less than 4.00% on March 31 of calendar year 1994 or calendar year 1995, ending July 1 of that calendar year, require payments from its workers at the [rate of 0.50%] following rates of wages paid, which amounts are to be held in the trust fund maintained by the governmental entity or instrumentality for payment of benefit costs: for calendar year 1996, 0.38%;for calendar year 1997, 0.39%; and for calendar year 1998 and each calendar year thereafter, 0.50%.

(cf: P.L1992, c.205, s.1)

 

    19. Section 1 of P.L.1944, c.81(C.43:21-14.1) is amended to read as follows:

    1. Any employee who is paid wages by two or more employers aggregating more than [$3,000.00 during any calendar year prior to January 1, 1968, $3,600.00 during any calendar year commencing on or after January 1, 1968 and prior to January 1, 1972, $4,200.00 during any calendar year commencing on or after January 1, 1972 and prior to January 1, 1975, or $4,800.00 during any calendar year commencing on or after January 1, 1975, and prior to January 1, 1976, and thereafter] the amount of "wages" determined in accordance with the provisions of R.S. 43:21-7(b)(3) shall be entitled to a refund of the amount of contributions deducted from such wages and paid to the Division of Employment Security in excess of the contribution which is determined pursuant to R.S.43:21-7(d)(1)(D) required on [$3,000.00 of such wages paid during any calendar year prior to January 1, 1968, $3,600.00 during any calendar year commencing on or after January 1, 1968 and prior to January 1, 1972, $4,200.00 during any calendar year commencing on or after January 1, 1972 and prior to January 1, 1975, or $4,800.00 during any calendar year commencing on or after January 1, 1975, and prior to January 1, 1976, and thereafter] the amount of "wages" determined in accordance with the provisions of R.S.43:21-7(b)(3) except that no such refund shall be made unless the employee makes a claim, establishing his right thereto, within 2 years after the calendar year in which the wages are paid with respect to which refund of contribution is claimed. No interest shall be allowed or paid with respect to any such refund.

(cf: P.L.1974, c.86, s.6)

 

    20. Section 5 of P.L.1970, c.324 (C.43:21-24.11) is amended to read as follows:

    5. For the purposes of the extended benefit program and as used in this act, unless the context clearly requires otherwise:

    a. "Extended benefit period" means a period which

    (1) Begins with the third week after a week for which there is a state "on" indicator; and

    (2) Ends with either of the following weeks, whichever occurs later:

    (a) The third week after the first week for which there is a state "off" indicator; or

    (b) The thirteenth consecutive week of such period; provided, that no extended benefit period may begin by reason of a state "on" indicator before the fourteenth week after the close of a prior extended benefit period which was in effect with respect to this State; and provided further, that no extended benefit period may become effective in this State prior to the effective date of this act.

    b. (Deleted by amendment.)

    c. (Deleted by amendment.)

    d. There is a "state 'on' indicator" for this State for a week if [the]:

    (1) The division determines, in accordance with the regulations of the United States Secretary of Labor, that for the period consisting of the respective week and the immediately preceding 12 weeks, the rate of insured unemployment (not seasonally adjusted) under the [Unemployment Compensation Law] "unemployment compensation law" (R.S.43:21-1 et seq.):

    [(1)] (a) Equaled or exceeded 120% of the average of these rates for the corresponding 13-week period during each of the preceding 2 calendar years, and [equaled or exceeded 4%; provided that], for weeks beginning after September 25, 1982, [the rate] equaled or exceeded 5%; or

    [(2)] (b) With respect to benefits for weeks of unemployment beginning after [March 30, 1977, equaled or exceeded 5%; provided that for weeks beginning after] September 25, 1982, [the rate] equaled or exceeded 6%; or

    (2) With respect to any week of unemployment beginning after June 30, 1996, the average seasonally adjusted rate of total unemployment in the State, as determined by the United States Secretary of Labor for the most recent three-month period for which data for all states are published before the close of that week:

    (a) Equals or exceeds 6.5%; and

    (b) Equals or exceeds 110% of the average seasonally adjusted rate of total unemployment in the State during either of the corresponding three-month periods ending in the two preceding calendar years.

    e. There is a "state 'off' indicator" for this State for a week if the division determines, in accordance with the regulations of the United States Secretary of Labor, that for the period consisting of the respective week and the immediately preceding 12 weeks, neither [subparagraph] paragraph (1) or (2) of [paragraph] subsection d. was satisfied.

    f. "Rate of insured unemployment," for purposes of subsections d. and e. means the percentage derived by dividing

    (1) The average weekly number of individuals filing claims for regular benefits in this State for weeks of unemployment with respect to the most recent 13-consecutive-week period, as determined by the division on the basis of its reports to the United States Secretary of Labor, by

    (2) The average monthly covered employment for the specified period.

    g. "Regular benefits" means benefits payable to an individual under the [Unemployment Compensation Law] "unemployment compensation law" (R.S.43:21-1 et seq.) or under any other State law (including benefits payable to Federal civilian employees and to ex-servicemen pursuant to 5 U.S.C. [chapter 85] §8501 et seq.) other than extended benefits.

    h. "Extended benefits" means benefits (including benefits payable to Federal civilian employees and to ex-servicemen pursuant to 5 U.S.C. [chapter 85] §8501 et seq.) payable to an individual under the provisions of this act for weeks of unemployment in his eligibility period.

    i. "Eligibility period" of an individual means the period consisting of the weeks in his benefit year which begin in an extended benefit period and, if his benefit year ends within the extended benefit period, any weeks thereafter which begin in the period.

    j. "Exhaustee" means an individual who, with respect to any week of unemployment in his eligibility period:

    (1) has received prior to the week, all of the regular benefits that were available to him under the [Unemployment Compensation Law] "unemployment compensation law" or any other State law (including dependents' allowances and benefits payable to Federal civilian employees and ex-servicemen under 5 U.S.C. [chapter 85] §8501 et seq.) in his current benefit year that includes such week, provided, that for the purposes of this [subparagraph] paragraph, an individual shall be deemed to have received all of the regular benefits that were available to him although as a result of a pending appeal with respect to wages and/or employment that were not considered in the original monetary determination in his benefit year, he may subsequently be determined to be entitled to added regular benefits; or

    (2) his benefit year having expired prior to such week, has no, or insufficient, wages and/or employment on the basis of which he could establish a new benefit year that would include such week; and

    (3) (a) has no right to unemployment benefits or allowances, as the case may be, under the Railroad Unemployment Insurance Act, the Trade Expansion Act of 1962, the Automotive Products Trade Act of 1965 and such other Federal laws as are specified in regulations issued by the United States Secretary of Labor; and

    (b) has not received and is not seeking unemployment benefits under the Unemployment Compensation Law of Canada; but if he is seeking these benefits and the appropriate agency finally determines that he is not entitled to benefits under that law he is considered an exhaustee if the other provisions of this definition are met.

    k. "State law" means the unemployment insurance law of any state approved by the United States Secretary of Labor under section 3304 of the Internal Revenue Code of [1954] 1986, 26 U.S.C.§3304.

    l. "High unemployment period" means any period during which the average seasonally adjusted rate of total unemployment in the State, as determined by the United States Secretary of Labor for the most recent three-month period for which data for all states are published:

    (1) Equals or exceeds 8%; and

    (2) Equals or exceeds 110% of the average seasonally adjusted rate of total unemployment in the State during either of the corresponding three-month periods ending in the two preceding calendar years.

(cf: P.L.1982, c.144, s.1)

 

    21. Section 9 of P.L.1970, c.324 (C.43:21-24.15) is amended to read as follows:

    9. [The] a. Except as provided in subsection b. of this section, the total extended benefit amount payable to any eligible individual with respect to his applicable benefit year shall be the lesser of the following amounts:

    [a.] (1) 50% of the total of regular benefits which were payable to him under the [Unemployment Compensation Law] "unemployment compensation law" (R.S.43:21-1 et seq.) in his applicable benefit year; or

    [b.] (2) thirteen times his weekly benefit amount which was payable to him under the [Unemployment Compensation Law] "unemployment compensation law" (R.S.43:21-1 et seq.) for a week of total unemployment in the applicable benefit year.

    b. With respect to weeks beginning during a high unemployment period, the total extended benefit amount payable to an eligible individual with respect to his applicable benefit year shall be the lesser of the following amounts:

    (1) 80% of the total of regular benefits which were payable to the individual under the "unemployment compensation law" (R.S.43:21-1 et seq.) during the applicable benefit year; or

    (2) twenty times the weekly benefit amount which was payable to the individual under the "unemployment compensation law" (R.S.43:21-1 et seq.) for a week of total unemployment during the applicable benefit year.

    c. Notwithstanding any other provisions of the [Unemployment Compensation Law] "unemployment compensation law" (R.S.43:21-1 et seq.), if the benefit year of an adversely affected worker covered by a certification under subchapter A, chapter 2, Title II of the Trade Act of 1974, P.L.93-618, [5 U.S.C.5312 et seq.] (19U.S.C.§2271 et seq.) as amended, ends within an extended benefit period, the remaining balance of extended benefits that the individual would, but for this section, be entitled to receive in that extended benefit period, with respect to weeks of unemployment beginning after the end of the benefit year, shall be reduced (but not below zero) by the product of the number of weeks for which the individual received any amounts as trade readjustment allowances within that benefit year, multiplied by the individual's weekly benefit amount for extended benefits.

(cf: P.L.1982, c.144, s.3)

 

    22. (New Section) For the purposes of the Emergency Unemployment Benefits Program and as used in sections 22 through 27 of this 1996 amendatory and supplementary act:

    "Division" means the Division of Unemployment and Temporary Disability Insurance".

    "Emergency unemployment benefits" means benefits financed entirely by the State and paid to exhaustees pursuant to sections 22 through 27 of this 1996 amendatory and supplementary act.

    "Emergency unemployment benefit period" means a period not within an extended benefit period, which:

    a. Begins on March 3, 1996, and

    b. Ends upon the conclusion of the second week after the first week for which there is a State "on" indicator as defined in section 5 of P.L.1970, c.324 (C.43:21-24.11) or other federally-financed supplemental benefits program, or

    c. If there is no such "on" indicator, ends with the occurrence of either of the following:

    (1) The third week after the first week for which there is a State emergency unemployment benefits "off" indicator; or

    (2) The calendar week after the calendar week in which total expenditures of the emergency unemployment compensation fund Statewide first exceed $250 million.

    There is a State emergency unemployment benefits "off" indicator for any week in which it is determined by the division based on data reported by the U.S. Bureau of Labor Statistics that, for the prior four calendar months, the average total unemployment rate (seasonally adjusted) in this State is less than 6.0 percent.

    Notwithstanding any other provision of this subsection c., no emergency unemployment benefits shall be paid after September 1, 1996, except that emergency benefits shall be paid to individuals who established emergency unemployment claims prior to that date. No emergency unemployment benefits shall be paid to any individual after December 8, 1996.

    "Eligibility period" of an exhaustee means the period consisting of the weeks in the exhaustee's benefit year which begin in an emergency unemployment benefit period and, if that benefit year ends in the emergency unemployment benefit period, any weeks thereafter which begin in the period.

    "Exhaustee" means an individual who exhausted all of the regular benefits that were available to the individual pursuant to the "unemployment compensation law," R.S.43:21-1 et seq., (including benefits payable to federal civilian employees and ex-service persons or payable under the combined wage program), after September 2, 1995 and before March 3, 1996, or during any calendar week of the emergency unemployment benefit period. No individual who exhausted all of the available regular benefits prior to September 3, 1995 shall be eligible for emergency unemployment benefits. An individual whose benefit year has expired prior to the beginning of the emergency unemployment benefit period shall not be eligible for such benefits.

 

    23. (New section) During an emergency unemployment benefit period exhaustees, who otherwise continue to meet the eligibility requirements for regular benefits pursuant to the provisions of the "unemployment compensation law," R.S.43:21-1 et seq., and who are not eligible for any other unemployment benefits, including benefits provided for by any federal law extending benefits beyond those provided for as regular benefits or extended benefits, may receive weekly emergency unemployment benefits for weeks subsequent to March 3, 1996 in an amount equal to the weekly benefit amount of the individual's most recent regular unemployment benefit claim subject to the provisions of the "unemployment compensation law," R.S.43:21-1 et seq. The maximum emergency unemployment benefits an individual may receive pursuant to sections 22 through 27 of this 1996 amendatory and supplementary act is 25 percent of the regular unemployment benefits which were payable to the individual pursuant to the "unemployment compensation law," R.S.43:21-1 et seq., (including benefits payable to federal civilian employees and ex-service persons or payable under the combined wage program) in the individual's applicable benefit year.

 

    24. (New section) No employer's account shall be charged for emergency unemployment benefits paid to an unemployed individual pursuant to sections 22 through 27 of this 1996 amendatory and supplementary act, except for the account of an out-of -State employer who is liable for charges under the Combined Wage Program. However, nothing in this section shall be construed to relieve employers electing to make payments in lieu of contributions pursuant to section 3 or 4 of P.L.1971, c.346 (C.43:21-7.2 or C.43:21-7.3) from reimbursing the unemployment benefits paid to an unemployed individual pursuant to sections 22 through 27 of this 1996 amendatory and supplementary act.

    Emergency unemployment benefits paid to federal civilian employees shall be charged to the appropriate federal account. Emergency unemployment benefits paid to ex-service persons shall be charged to the General Fund.

 

    25. (New section) Emergency unemployment benefits may be paid pursuant to the provisions of sections 22 through 27 of this 1996 amendatory and supplementary act only with respect to weeks not within an extended benefit period, and not within a period covered by any federal law allowing the filing of new claims extending benefits beyond those provided for as regular or extended benefits. If a federal extended benefits period triggers "on" , maximum benefits payable to an individual under the federal extended benefits program or any federal supplemental benefits program shall be reduced by an amount equal to that received by the individual under the emergency unemployment benefits program.

 

    26. (New section) Notwithstanding the provisions of any other law, the division shall use appropriate administrative means to insure that emergency unemployment benefits are paid only to individuals who meet the requirements of sections 22 through 27 of this 1996 amendatory and supplementary act. These administrative actions may include, but shall not be limited to, the following procedure. The division shall match the claimant's social security number against available wage records to insure that no earnings were reported for that claimant by employers under R.S.43:21-14 for periods in which emergency unemployment benefits were paid.

 

    27. (New section) No exhaustee shall receive benefits pursuant to sections 22 through 27 of this 1996 amendatory and supplementary act during the portion of the emergency unemployment benefit period which occurs prior to the effective date of this 1996 amendatory and supplementory act unless the exhaustee submits to the division a signed written statement, on a form approved by the division, that the exhaustee was actively seeking work during that portion of the benefit period and was otherwise eligible for the benefits.

 

    28. P.L.1950, c.303 (C.44:8-146 et seq.) is repealed.

 

    29. There is appropriated $1,500,000 from the General Fund to the Department of Health to effectuate the purposes of section 13 of P.L.     , c. (C. )(pending before the Legislature as this bill).

 

    30. This act shall take effect immediately and be retroactive to January 1, 1996, except that section 14 shall take effect on July 1, 1996.

 

 

STATEMENT

 

    This bill establishes a methodology for the distribution of charity care subsidies to hospitals and provides a funding mechanism for these subsidies and the Health Access New Jersey subsidized insurance program, as well as for other hospital and drug abuse treatment services.

    The charity care subsidy distribution methodology for 1996 and 1997 is similar to that used in 1995. The hospital-specific charity care subsidy shall be determined by allocating available charity care funds so as to equalize hospital-specific payer mix factors (as defined in the bill) to the Statewide target payer mix factor; except that, if the Statewide total of adjusted charity care is less than available charity care funding, a hospital's subsidy shall equal its adjusted charity care. The Statewide target payer mix factor is the lowest payer mix factor to which all hospitals receiving charity care subsidies can be reduced by spending all of the amount allocated in each year for charity care subsidies. Those hospitals with a payer mix factor greater than the Statewide target payer mix factor shall be eligible to receive a subsidy sufficient to bring their factor down to that Statewide level; those hospitals with a payer mix factor that is less than or equal to the Statewide target payer mix factor shall not be eligible to receive a subsidy.

    The charity care subsidy distribution methodology is based on documented (actual) charity care as verified by the Department of Health's most recent charity care audit, and valued at the same rate paid to that hospital by the Medicaid program.

    The bill provides that the Health Care Subsidy Fund will be funded at $350 million in 1996, and $350 million in 1997.

    The monies in the Health Care Subsidy Fund will be allocated as follows:

    -- for charity care subsidies, $275 million in 1996 and $265 million in 1997;

    -- for the Health Access New Jersey program, $40 million in 1996 and $40 million in 1997;

    -- for the Hospital Health Care Subsidy account in the Division of Medical Assistance and Health Services (Medicaid), to fund services at disproportionate share hospitals with high numbers of AIDS, tuberculosis, substance abuse, neonatal and mental health patients, $35 million (State share) in calendar year 1996 and $45 million (State share) in calendar year 1997. In succeeding years, the Legislature shall appropriate funds for this purpose in the annual appropriation act. Also, of the $35 million and $45 million allocations, respectively, $8.75 million (State share) will be allocated to those disproportionate share hospitals which serve large numbers of low-income mentally ill or developmentally disabled patients; and

    -- for community-based residential and inpatient drug abuse treatment services, up to $10 million in 1996 and $20 million in 1997 and each succeeding year.

    The bill also specifies that the commissioner will report to the Governor and the Legislature by December 31 of each year on the status of the Health Care Subsidy Fund, including any remaining balances in the fund.

    In addition, the bill clarifies that the purpose of the Health Access New Jersey program will be to provide health insurance coverage for low-income, uninsured children, as well as working people and those temporarily unemployed.

    Finally, the bill:

    -- requires the Commissioner of Health to study the feasibility of such policy options as delivering charity care through a publicly or privately operated managed care network which includes both inpatient and outpatient services, and of reimbursing for charity care services on the basis of claims processed and at the lowest per diem or per case rate charged by a hospital to any third party payer for health care services;

    -- requires the Health Information Electronic Data Interchange Policy Council, which would be established under Senate Bill No. 50 or Assembly Bill No. 1476 of 1996, to study the feasibility of utilizing administrative cost savings accruing from the adoption of health care information electronic data interchange technology to first accelerate the scheduled reduction in the use of revenues from employee and employer contributions and then to reduce the need for General Fund appropriations to fund the Health Care Subsidy Fund;

    -- directs that the findings and recommendations from these studies be reported to the Governor and the Legislature within certain specified time periods; and

    -- appropriates $1.5 million to the Department of Health to fund these studies.

    This bill establishes an Emergency Unemployment Benefits Program and provides that the program would permit up to 6 1/2 weeks of additional unemployment benefits to claimants who have exhausted their entitlement to regular unemployment benefits. The bill is intended to assist a growing number of unemployed workers who have exhausted their claims for regular unemployment and have remained unemployed, in light of the more restrictive trigger mechanism under the amended "Federal-State Extended Unemployment Compensation Act of 1970," (26 U.S.C.§3304 fn.). The program extends through September 1, 1996, except that it would automatically terminate if the Federal-State Extended Benefits Program or any federally funded supplemental benefits program were to be triggered, or if the total unemployment rate were to fall below 6%. Total benefits expenditure is capped at $250 million.

    The program is limited to those unemployment claimants who have filed intrastate claims, and includes claims filed by federal civilian employees, ex-service persons and those filed under the Combined Wage Program. Benefits paid under the Emergency Unemployment Benefits Program would be funded by the unemployment compensation fund; employers' Experience Rating Accounts would not be charged.

    The bill also modifies the conditions under which extended UI benefits are made available to laid off workers who exhaust their regular UI benefits but are not able to obtain employment.

    The provisions of the bill regarding extended UI benefits are based on the federal Unemployment Compensation Amendments of 1992, Pub.L.102-318. That law permits each state to enact legislation to provide an alternative unemployment threshold or "trigger" to start a program under which the State and the federal government share the costs of the benefits on a 50-50 basis.

    This bill contains that alternative trigger, which provides 13 weeks of extended benefits for each worker if the State's total unemployment rate is 6.5% or more and is also at least 10% higher than the rate for the corresponding 13-week period during either of the preceding two calendar years. Twenty weeks of extended benefits are provided if the State's total unemployment rate reaches 8%. The cost of the extended benefits is shared equally by the State and the federal government.

    Under current State law, the trigger for 50-50 State/federal extended unemployment benefits is that New Jersey must have an insured unemployment rate of at least 6% or at least 5% and also at least 20% higher than the rate for the corresponding 13-week period during both of the preceding two calendar years. This trigger was unattainable for New Jersey and most other states during the recent recession, because most unemployed workers do not receive regular unemployment benefits and therefore are not counted when the insured unemployment rate is calculated. Throughout the period from 1990 to 1993, New Jersey's insured unemployment rate remained well below 5%, even when the State's total unemployment rate rose above 9%. Before 1984, extended benefits were available in most states, including New Jersey, only due to the more attainable trigger for the 100% federally-funded emergency unemployment program.

    This bill is designed to help alleviate the pain inflicted by long-term unemployment on many New Jersey households, including home mortgage foreclosures, severe depression, increased substance abuse, marital breakups and even suicides.

    For the last three years, New Jersey has had the highest rate of any state of laid-off workers exhausting their UI benefits without being able to find new work. During the last four years more than 430,000 New Jersey workers ran out of all federal and State UI benefits. The State has also had the highest home mortgage foreclosure rate in the nation. During that time, New Jersey's home foreclosure rate was more than twice as high as any time in the recessions of the 1970's and the 1980's.

 

 

                             

 

Provides funding for hospital charity care subsidies and other programs, extends unemployment insurance benefits; appropriates $1.5 million to Department of Health.