August 19, 2004

Christine Baker

CHSWC reports on workers’ compensation electronic payment systems and access to funds

SAN FRANCISCO -- The California Commission on Health and Safety and Workers’ Compensation (CHSWC) unanimously voted at its public meeting today to approve and issue a report entitled “CHSWC White Paper on Cost/Benefit of Implementing Electronic Deposit for Unemployment and Disability Benefits in the State of California”.

CHSWC’s study explored the potential of improving administrative efficiency and reducing the transaction costs of processing paper checks for the payment of unemployment and disability benefits in the State of California.

CHSWC staff determined that utilizing electronic deposit systems instead of the current check writing systems could result in cost savings, timely delivery of benefits to recipients, elimination of the problem of checks being lost in the mail, and potential for fraud reduction since electronic payment transactions leave a specific footprint and are highly auditable.

The study found that over $2.8 billion in administrative savings over a five year period could be achieved by mandating that electronic deposit be offered by payors to payees in lieu of paper check disbursements and utilizing electronic benefit transfer cards (EBT) for un-banked recipients.

Since these efficiencies could be used for unemployment insurance (IU), state disability insurance (SDI), workers’ compensation, non-industrial disability (NDI), uninsured employers, and other administrative systems, the report is being distributed to appropriate legislative committees, the Labor and Workforce Development Agency, and the Employment Development Department.

The report includes specific recommendations on how to improve farm workers’ access to workers’ compensation benefits and thus fulfills the CHSWC mandates in Labor Code Section 4651.

CHSWC, created by the workers’ compensation reform legislation of 1993, is charged with overseeing the health and safety and workers’ compensation systems in California and recommending administrative or legislative modifications to improve their operation. CHSWC was established to conduct a continuing examination of the workers’ compensation system and of the state’s activities to prevent industrial injuries and occupational diseases and to examine those programs in other states.

Since its inception in 1994, CHSWC has held meetings, conducted fact-finding hearings, and directed several studies to determine how these crucial programs are serving California employees and employers. These studies, conducted by independent research organizations under contract with CHSWC, and other activities were aided by the involvement of state agency personnel and interested members of the workers’ compensation community. This cooperative public-private partnership continues to work together to identify, describe, measure and propose solutions to problems and difficulties in the current health and safety and workers’ compensation systems. Many of the recommendations in CHSWC reports have been adopted in the California workers’ compensation reform legislation of 2003 and 2004.

CHSWC reports and other information are available at Information may also be obtained by writing to Christine Baker, executive officer, Commission on Health and Safety and Workers’ Compensation (CHSWC) 455 Golden Gate Avenue, 10th Floor, San Francisco, California 94102, by calling (415) 703-4220, by faxing a request to (415) 703-4234, or by emailing