In 2018, the California Legislature passed SB 880 which was modeled after the Employment Development Department’s program that utilizes prepaid cards to issue unemployment insurance and disability insurance payments. The purpose was to conduct a pilot program to transmit workers’ compensation disability indemnity benefits via prepaid card, rather than a paper check.
It authorized employers to begin a program where disability indemnity benefits may be deposited on a prepaid card account if the injured worker has provided written consent to receive his or her benefits on a prepaid card and prohibits account fees being charged to an injured worker, except for an expedited replacement prepaid card, out-of-network ATM fees on the third and subsequent withdrawal per deposit, and fees associated with foreign transactions.
The bill also required CHSWC to report data to the Legislature by December 12022 about the number of employees who elected to receive their benefits via prepaid card – the cash value of benefits sent via prepaid card, and the number of employees who opted to change their method of payment from prepaid card to either a written instrument or electronic deposit.
The pilot program authorized by SB 880 was due to sunset on January 1, 2023. Last year, AB 2148 (Calderon, Chapter 120, Statutes of 2022) extended the sunset date to January 1, 2024. The CHSWC report required by SB 880 has not yet been submitted to the Legislature.
This year AB 489 was passed by the legislature and has now been signed by Governor Newsom. This law extends an existing pilot program by one year to allow workers’ compensation temporary and permanent disability indemnity payments to continue to be made using prepaid cards.
Passage of this extension was supported by the following organizations:
– – American Property Casualty Insurance Association
– – California Association of Joint Powers Authorities
– – California Coalition on Workers Compensation
– – Housing Contractors of California
– – Public Risk Innovation, Solutions, and Management
There was no opposition to the extension of time.