An Overview of the Unemployment Insurance Erroneous Payments

1
An Overview of the Unemployment Insurance
Erroneous Payments

• Dale Ziegler
• Deputy Administrator
• Office of Workforce Security
• April 26, 2005

2
Overview

• A federal-state partnership based on federal law
  but administered by states under state law.
• Administration and Benefits almost totally funded
  by employer-paid payroll taxes.

3
Functions of Federal Government

• Ensures conformity compliance of states with
  federal laws.
• Determines administrative fund requirements
  provide funds to states.
• Sets broad policy, monitors performance, and
  provides technical assistance.
• Manages unemployment trust funds in US Treasury.

4
Functions of State Governments

• Design own UI programs within the framework of
  federal requirements.
• Set benefit amounts, duration, eligibility
  requirements.
• Determine operation methods and process claims
  from individuals, determine eligibility, ensure
  timely payment of benefits to workers.

5
Claims Process

• Unemployed worker files at a UI office or, in
  many states, by telephone or internet.
• Agencies generally can determine monetary
  eligibility immediately.
• Employers report employee wages to the state each
  quarter.
• Most claimants required to register for work.

6
Claims Process

• Last employer (in some states all base year
  employers) notified when worker files a claim.
• Agency determines eligibility after receiving
  sufficient information from employer and
  employee.
• If eligible, claimants must report their status
  weekly/bi-weekly.
• Able and available for work
• Work search efforts

7
Benefit StatisticsFiscal Year 2004

• 42.5 B
• 8.8 M
• 2.7 B

• Benefits Paid (all programs)
• Beneficiaries (all programs)
• Administrative costs (state only)

8
Benefit StatisticsFiscal Year 2004

• 16.5 weeks
• 262
• 4,323
• 25.62

• Average Duration
• Average Weekly Benefit Amount (AWBA)
• Average UC Total Claim
• Average Overpayment

9
Distribution of UI Overpayments
10
Issue UI Erroneous Payments

• Level of erroneous payments of UI benefits
  estimated by the Benefits Accuracy Measurement
  (BAM) system was 9.88 or 3.4 billion in FY
  2004.
• ETA is focusing on the Operational Overpayment
  Rate which represents the level of overpayments
  in each state that are preventable, or detectable
  / recoverable through Benefit Payment Control
  program operations.
• Nationwide, the operational overpayment rate in
  fiscal year (FY) 2004 was 5.3, representing
  about 1.9 billion in UI benefit overpayments.
  With 40 (900 million) attributed to fraud.

11
Distribution of UI Overpayments
12
Distribution of UI Overpayments
13
UI Overpayment DetectionThe Operational
Overpayment Rate
14
UI Program Strategies to Reduce Erroneous
Payments Increase Collections

• Primary Focus has been Detection and Collection
• Detection
• GPRA Goal and Measure
• Incentive Grants for Cross-Matches
• National Directory of New Hires
• State Directory of New Hires
• Motor Vehicles/Vital Statistics/Corrections

15
UI Program Strategies to Reduce Erroneous
Payments Increase Collections

• FY 06 Budget Proposals
• Reemployment Eligibility Reviews Assessments
• Identity Theft
• Prevention/Collection
• 5 of Collections
• 15 Required Fine for Fraud
• 25 Collection Agency fee
• Treasury Off-set Program

16
Possible Private Sector Technological Assistance
Opportunities

• Overpayment Collection Management System to
  Effectively and Efficiently Follow-up on Benefit
  Year Earnings and other tips and leads
• Technological Solutions which will Expedite and
  Simply the Solicitation and Submission of
  Separation Information from Employers
• Base Period Wage Quality Control
• Web and Telephony Interfaces To Efficiently
  Verify Applicant Identity
• Other