Hamberger & Weiss LLP

Reminder - Board Allows Direct Deposit of Indemnity and Death Benefits

As of July 1, 2021, injured workers and those persons entitled to a death benefit will have the right to have indemnity payments directly deposited into at least two bank accounts. The Board adopted a new direct deposit regulation, 12 NYCRR 300.26, which requires carriers, self-insured employers, third party administrators and Special Funds, including the UEF, to make direct deposit available to all injured workers or persons entitled to a death benefit pursuant to an Election Form to be prescribed by the Board. The Board also requires that a one-time Notice be provided to all such persons. Neither the Election Form nor the specific format of the Notice are published to date, but the requirements of both are delineated in the new regulation. Carriers/SIEs/TPAs may use the current Direct Deposit and Debit Card Authorization Form (DD-1) already available and may include whatever additional elements they find appropriate, as long as the regulation requirements are met.

While we recommend detailed review of the regulation, of note are the following:

The one-time Notice and Election Form must be provided to the injured worker or person entitled to a death benefit within 14 days of the submission of a FROI.
The new regulation applies to ongoing awards directed prior to 7/1/21 as well as those directed thereafter. If the FROI was due prior to 7/1/21, then the Notice and Election Form will be due with or before the next SROI is due or submitted after 7/1/21.
The Notice must be published on the carrier, SIE or TPA’s website, along with instructions for submission of the Election Form.
The carrier, SIE, TPA or Special Fund may set a minimum amount for direct deposit into a single account, not to exceed $20 per biweekly payment.
The Notice and Election Form are not required for payments to injured workers or persons entitled to death benefits in lieu of workers’ compensation benefits, schedule loss of use awards, Section 32 settlement proceeds, or awards made without direction to continue payments.

Should you have any questions about this issue, please do not hesitate to contact our partner Susan Parzymieso at 716-852-5200 or sparzymieso@hwcomp.com.

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