Saunders, J.s.c. (temporarily assigned).
[165 NJSuper Page 585] The issue presented by the facts of this case is one which has not been the subject of a reported decision in this State, but is one
which must constantly arise under the "No-fault" insurance law. Is an insurance carrier, in making payments pursuant to its income continuation benefits policy provision, entitled to deduct an amount equal to the benefits collectible under a private temporary disability benefit plan approved by the State?
The issue has been submitted to the court on an agreed stipulation of facts. Plaintiff, an employee of Public Service Electric & Gas Co. (Public Service), was injured in an auto accident as a result of which he incurred lost wages for a period commencing October 1, 1976 to December 27, 1976. Public Service subscribed to a private disability plan that had been approved by the New Jersey Division of Employee Security pursuant to N.J.S.A. 43:21-32. In accordance with the statute, the benefits payable are equal to or exceed state benefits for temporary disability. Plaintiff, by the terms of this plan, received 100% of regular salary during the period of disability.
At the time of the accident plaintiff was covered for personal injury protection (PIP) under a policy of insurance with New Jersey Manufacturers Ins. Co. (NJM), defendant in this action. The policy provides the coverage mandated by N.J.S.A. 39:6A-1 et seq. All medical bills incurred by plaintiff have been paid by defendant. Plaintiff was entitled to income continuation benefits in the amount of $1220 for his period of disability. Plaintiff received temporary disability benefits amounting to $1193.13. Defendant paid plaintiff $26.87.
It is plaintiff's position that because these benefits were conferred under a private plan, they are not subject to the collateral source deduction of N.J.S.A. 39:6A-6.
The Legislature enacted the Temporary Disability Benefits Law, N.J.S.A. 43:21-25 et seq. , to provide coverage to those working individuals disabled by accident or illness that was non-job related and, therefore, not compensable. Janovsky v. American Motorists Ins. Co. , 11 N.J. 1 (1952). In the title of the act its purpose is specifically stated: "'An
Act to provide for the payment of disability benefits to certain persons with respect to accident and sickness not compensable under the workmen's compensation law.'"
"The source for temporary disability benefits is an approved private plan or the State Plan for which the State Treasurer is trustee and administrator." Frazier v. Liberty Mut. Ins. Co. , 150 N.J. Super. 123, 142 (Law Div. 1977). Any private plan must meet the approval of the Division of Employee Security. Its benefits must equal or exceed the benefits of the state plan, and no greater amount is required to be paid to the employee than under the state plan. N.J.S.A. 43:21-32(d). In accordance with N.J.A.C. 12:18-2.2 and 12:18-2.10(a), coverage under one plan precludes coverage under the other. Protection against loss of wages is the purpose of the statute. The purpose is controlling and "pervades both the State and private plans alike." Potts v. Barrett Div., Allied Chem. & Dye Corp. , 48 N.J. Super. 554, 560 (App. Div. 1958).
In 1972 the Legislature enacted the Automobile Reparation Act. "The Legislature had four purposes in mind in enacting no-fault legislation: (1) to increase the number of persons covered; (2) to reduce the costs of auto insurance; (3) to increase the availability of coverage, and (4) to reduce litigation and court time." Frazier v. Liberty Mut. Ins. Co., supra 150 N.J. Super at 133. As the court points out in Frazier , the device to reduce the new burden on insurance carriers is the "statutory right to [deduct] for collateral sources." Id.
N.J.S.A. 39:6A-6 provides:
The benefits provided in section 4a., b., c., d., and e. and section 10, shall be payable as loss accrues, upon written notice of such loss and without regard to collateral sources, except that benefits collectible under workmen's compensation insurance, employees temporary disability benefit statutes and medicare * * * shall be deducted from ...