New Pennsylvania Bill Allows Injured Workers to Receive Benefits Via Direct Deposit

The Pennsylvania General Assembly has passed a bill that would require insurers to make direct deposit the default method for paying temporary total disability workers’ compensation benefits.

Introduced on May 31, 2024, PA SB1232 amends the Workers’ Compensation Act to require insurers and self-insured employers to offer direct deposit for payment of temporary total disability payments. The rationale offered for this new bill centers around the inefficiencies of paper checks, noting their potential to cause delays, loss, or displacement. The bill’s supporters also suggest that the switch to direct deposit may help insurers by reducing processing time and mailing costs. However, the bill does outline that lump sum payments as a result of Compromise & Release agreements and payments for claims with an expected duration of 60 days or less may continue to be paid by paper check. Additionally, if the employee does not have an account with a financial institution capable of accepting direct deposit, they may request payment by paper check.

After effective passage date of this bill, insurers may permit or require payment by direct deposit. No later than one year after the effective passage date, all insurers will be required to offer payment by direct deposit. Should this bill pass, insurers will be required to provide an authorization form or may direct the employee to an online authorization form immediately upon availability or concurrently with a notice of compensation payable. If the direct deposit form is not validly filled out by the employee within 30 days of receiving notification of the requirement, the insurer may, at its discretion, temporarily pay by check.

While some TPAs and insurers already offer payment by direct deposit, some do not pay for this extra service and will need to do so if this bill passes, which appears likely.