With WC Debit Cards, the Check Isn't in the Mail

"Paper or plastic" is taking on a whole new meaning.

JPMorgan, the financial giant that issues many of the nation's commercial prepaid credit/debit cards, has launched the Chase Workers' Compensation Card. Available nationwide, the prepaid debit card delivers workers' compensation benefits to injured or disabled workers. JPMorgan calls the card "a payments solution designed to help insurance companies cut costs and increase control when paying injured workers."

The company touts numerous benefits for both the beneficiary and the insurer.

Perhaps most importantly, claimants won't have to wait for a check to arrive in the mail. The card also eliminates costly check-cashing fees for people without a checking account. "There are an estimated 25 million employees in the U.S. who do not have bank accounts," Vice President, Treasury Services Media Relations John T. Murray III said. "With the debit card, people don't have to worry about paying check-cashing fees or establishing a bank account."

Claimants can gain access to their funds at automated teller machines (ATMs), receive cash back at retail locations, pay bills online, and make purchases at any location that accepts Visa debit cards, such as pharmacies and medical facilities. (Because the card is Visa-branded, cardholders can use the card surcharge-free at any locations that accept Visa.)

The program allows one free ATM withdrawal at Chase or Allpoint ATMs per pay period; after that, standard ATM fees apply. Beneficiaries can review their account balances daily with a toll-free number or online.

The cards are funded using a standard direct-deposit process, eliminating the labor and costs associated with check printing, issuance, and mailing. The insurance company determines the payment schedule, choosing weekly, bi-weekly, or monthly. There are no monthly maintenance fees or customer service fees.

According to Murray, the insurer has the flexibility to offer only plastic or to give claimants a choice. "Some may choose to only make claim payments through the debit card, while others may offer the option of having payments made through the debit card, check, or direct deposit," he said.

The enrollment process appears relatively simple. After the claimant completes a brief application form, the claim-paying client uses a secure online management and reporting tool to finish the enrollment. New claimants can be enrolled one-by-one or via a group enrollment process.

Once enrolled, a Welcome Kit is sent to the cardholder outlining the program terms and conditions. When the claimant receives his card, he activates it by phone and selects a personal identification number (PIN) and telephone access code. The PIN must be correctly entered at ATMs and retail locations to successfully complete a transaction. If a card is lost or stolen, the cardholder reports it to customer service, the account is frozen, and the card is replaced.

The program offers a number of status reports to help insurance companies manage and track activities, such as:

? Enrollment Status: Tells administrators whose enrollment is active or pending.

? Funding Summary: Provides a summary level report of client funding activities, such as deposits and credit adjustments.

? Funding Detail: Details cardholder accounts and the amounts funded into the accounts.

? Card Activation Summary: Provides a summary of activated and non-activated cards for select reporting periods.

? Transactions: Provides a summary of cardholder transaction activity for the reporting period, including totals for transaction type, transaction count, and transaction amount.

? Account Closure: Provides details of accounts closed for the reporting period, including account closing date, date of last transaction, and date of last posting.

? Card Replacement: Identifies cardholders who have received a replacement card. The report identifies which cards were reported lost, stolen, or damaged.

Although reluctant to name many current clients, Murray said that the company is "actively speaking with its existing insurance and government clients and many have expressed interest in the offering. Several new customers are up and running or in the implementation phase." Murray said that insurance companies are advised to first consult with their state insurance offices to make sure that they are able to offer a debit card as a means of payment; rules may vary state by state.

According to its web site, the Ohio Bureau of Workers' Compensation has elected to join the program, issuing what it refers to as an Electronic Benefit Card. Central Mutual Insurance Company, also in Ohio, is another client.

The Insurance Information Institute says that Americans collected $42 million in workers' compensation payments in 2006, giving JPMorgan a large universe of potential new clients.

More information is available at www.jpmorgan.com/ts.