J.P. Morgan Offers Workers' Compensation Debit Card

This goes in the "it's-about-time" department.

J.P. Morgan has announced it is offering the Chase Workers Compensation Card. J.P. Morgan states "that it is the first major financial institution to enable insurance companies to use prepaid debit cards to deliver workers compensation benefits to injured or disabled workers." Instead of issuing checks, the Chase system "delivers an automated, easy to manage electronic payments system that eliminates more expensive paper-based systems, but provides insurance companies with a custom-branded card designed to increase customer loyalty."

Injured employees can use the debit cards like traditional debit cards, withdrawing money from ATMs, purchasing at any location that accepts Visa cards, and the ability to check the balance immediately through a toll-free number. The injured employee avoids delays in check cashing, account holds, and transaction costs.

For business owners in Ohio interested in the program, the press release indicates that Central Mutual Insurance will be offering the program. I looked at the Central Mutual website and did not find any information specific to the plan.

According to the news release, the Insurance Information Institute estimates $17 billion was paid directly to injured workers in 2006. By implementing electronic payment solutions significant transaction costs can be eliminated. Less transaction costs (hopefully) leads to lower premiums to business owners. Good idea and beneficial to employees and employers alike.