1. The bank where any deposit is made must be a member of a New York Automated Clearinghouse.

2. Multiple bank accounts: (i) A carrier, self-insured employer and third-party administrator must permit workers’ compensation benefits or death benefits to be deposited in at least two bank accounts at the request of the claimant or person entitled to death benefits; and (ii) A carrier, self-insured employer and third-party administrator must permit an injured worker or person entitled to a death benefit to divide the deposits as a percentage of the total benefit or by a fixed dollar amount for each deposit.

1. Within fourteen days of submission of a first report of injury to the Chair or accompanying the initial benefits check, whichever is earlier, the carrier, self-insured employer, third-party administrator or Special Fund shall provide the injured worker or person entitled to a death benefit, in the format prescribed by the Chair, with Notice of the right to receive payment by direct deposit together with the Election Form. In the event of a carrier’s acquisition of a claim, any prior election shall remain in effect unless discontinued as otherwise provided in this Part.

2. On or before July 1, 2021, the carrier, self-insured employer, or third-party administrator shall publish on its website such Notice and Election Form in the format prescribed by the Chair together with instructions for submission of the Election Form.

3. When the first report of injury or payment of the initial benefits check was due prior to July 1, 2021, such Notice and Election Form in the format prescribed by the Chair, shall be transmitted to the injured worker or person entitled to a death benefit together with or on the same day as the next Subsequent Report of Injury that becomes due or is submitted on or after July 1, 2021 in accordance with section 300.22 of this.

4. Unless specifically requested by the Board, such Notice and Form shall not be submitted to the Board, but shall be maintained by the carrier, self-insured employer, third-party administrator or Special Fund.

5. Such Notice and Election Form shall not be due when payment to the injured worker or person entitled to a death benefit is made by the employer in lieu of workers’ compensation benefits (currently reported on a SROI-EP) or payment is made pursuant to a schedule loss of use award, or section thirty-two waiver agreement, or when an award is made with a direction that payments are not to continue beyond the date of the award.

This rule is proposed pursuant to SAPA section 207(3), 5-Year Review of Existing Rules.

1. Statutory Authority

The statutory authority for this rule comes from §§ 117(1) and 141 of the Workers’ Compensation Law, which allows the Chair to adopt reasonable rules to supplement the provisions of the chapter and the labor law, as well as section 25 as amended by S7210/A7579.

2. Legislative Objectives

In January 2021, the amendments to section 25 of the Workers’ Compensation Law were enacted. The new law requires the option for direct deposit of compensation payments for death benefits from the carrier or self-insured employer.

The proposed amendments provide the manner of the direct deposit process as directed by section 25.

3. Needs and Benefits

The direct deposit statute recently signed into law (A1291/S1298, signed chapter 9 of the laws of 2021) provides that direct deposit of compensation payments for indemnity and death benefits is required, and provides that enrolling in such direct deposit be done in a manner specified by Board regulations - the legislation requires the Board to enact regulations implementing the statute.

The statute does not contain any information about how carriers or self-insured employers can comply with this requirement and provides that regulations from the Board will provide such framework – this proposal provides the framework mentioned in the statute. The proposal is necessary to implement the statute and provide a process for the direct deposit of these compensation benefits as required by the statute.

4. Costs

The proposed amendments should not impose significant costs. The proposal provides guidance and clarity to implement the statute, while avoiding costs outside what the law requires. The updates implement what the statute requires, and the proposal does not impose any independent additional costs.

5. Local Government Mandates

There are no specific mandates on local governments as a result of this proposal.

6. Paperwork

The proposal requires an Election Form to be provided by the carrier or self-insured employer in the format prescribed by the Chair, as well as a one-time Notice to the Claimant of Direct Deposit. The Board will prescribe the method of these forms, and unless specifically requested by the Board, they are not required to be provided to the Board.

7. Duplication

There is no duplication of state or federal regulations or standards.

8. Alternatives

An alternative to the regulation would be to ignore the statute and not provide any regulations prescribing the method of enrollment in direct deposit. However, without regulations in place to provide guidance and clarity, the statute would be difficult to implement, would increase paperwork, and lack of clarity could result in additional litigation.

9. Federal Standards

There are no applicable federal standards or regulations related to the proposed amendments.

10. Compliance Schedule

The statute takes effect July 1, 2021, and the proposed regulations would take effect upon publication of the Notice of Adoption in the State Register.

1. Effect of rule

The statute requires the option for direct deposit of compensation payments for death benefits from the carrier or self-insured employer. The proposed amendments provide the manner of the direct deposit process as directed by section 25 of the Workers’ Compensation Law. Any self-insured local government employer would need to comply with this regulation, and small businesses are impacted only to the extent that their employees may be entitled to receive these benefits by direct deposit.

2. Compliance requirements

The proposal sets out guidance for the direct deposit enrollment process for carriers and self-insured employers. The proposal implements the statute and provides guidance and clarity about the direct deposit process under section 25 of the NYS Workers’ Compensation Law.

Carriers and self-insured employers must comply with the application and reregistration processes as well as the education requirements, etc. listed in the proposal to implement the statute.

3. Professional services

It is believed that no professional services will be needed by small businesses or local governments to comply with the proposed regulation.

4. Compliance costs

Compliance with the proposed regulations should not impose significant compliance costs on small businesses or local governments. The proposal seeks to implement the statute smoothly, and does not impose additional costs beyond what the statute would require.

5. Economic and technological feasibility

Compliance with the proposed regulations is technologically and economically feasible for small business and local government. The proposed regulations lay out the direct deposit process, and no additional technology beyond what most carriers and self-insured employers already use will be required.

6. Minimizing adverse impact

The proposed regulations were written to provide a framework to implement the statute in the clearest, smoothest way possible. To further minimize any impact, the regulations are being proposed now, and the statute takes effect on July 1, 2021.

7. Small business and local government participation

The Board will duly consider all public comments received from small businesses or local governments during the public comment period. The Board has also sent an electronic communication describing the proposal to subscribers for Board updates (4,227 self-insured employers) on February 22, 2021.

1. Types and estimated numbers of rural areas

The proposed amendments provide the manner of the direct deposit process as directed by section 25. Any carrier or self-insured employer must comply with the proposal, including those in rural areas.

2. Reporting, recordkeeping and other compliance requirements; and professional services

The same compliance and direct deposit enrollment requirements apply to carriers and self-insured employers in rural areas as in metropolitan areas. The direct deposit process will be prescribed by the Board, and no special professional services should be required by rural or any other areas. The proposed regulations seek to implement the statute.

3. Costs

The proposed amendments should not impose additional costs. The proposal provides guidance and clarity to implement the statute, while avoiding costs outside what the law requires.

4. Minimizing adverse impact

The proposed regulations were written to provide a framework to implement the statute requiring direct deposit to be available for these benefits in the clearest, smoothest way possible. To further minimize any impact, the regulations are being proposed now, and the statute takes effect on 7/1/21.

5. Rural area participation

The Board will duly consider all public comments received from rural areas during the public comment period.

A Job Impact Statement is not required because the proposed amendments are not expected to have any impact on jobs or employment opportunities. The proposal provides details for implementing the law requiring certain claimants to be allowed to receive workers’ compensation benefits through direct deposit. These proposed changes will not affect jobs or employment opportunities in any manner.