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Presented by:Mary Hinderer, MAXIMUS, Inc.Lisa Cwanger‐Ichilov, Burger, Carroll & Associates, Inc.
EBT: THE NEXT GENERATION 2017Clearwater, FloridaNovember 5, 2017
Agenda
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What is EBT?
How does EBT Work?
How is WIC EBT different?
What is ebt?What is EBT?
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What is EBT?
“Electronic Benefit Transfer” (EBT)[in SNAP] is “the automation of benefit authorization, delivery, redemption, and settlement processes through computers, plastic cards, and telecommunications technology which results in the elimination of paper coupons.”Source: USDA/FCS State EBT Workshop, 1992
EBT [in WIC] is a “benefit delivery method that allows program participants to access their benefits electronically. This definition permits use of an EBT card and PIN but also allows for alternatives to an EBT card.”Source: WIC EBT Final Rule, February 28, 2013
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EBT VisionEBT: Electronic Benefits TransferCard enabled access to government benefits/servicesEliminate paper checks and vouchersEnhance client dignity through commonly used card technologyEnhance convenience by using one card for multiple programsLeverage the existing credit/debit network
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A brief history lesson in EBT…
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1984USDA SNAP Pilot Reading, PA
1991WyoCard Demo (1steWIC smartcard)
1992Federal Operating
Rules
1993MD first statewide
EBT Project
1994 EBT Task Force RptFed Req: Nationwide SNAP EBT by 10/02
1995SNAP/WIC Pilot using a single card in WY
1996Multi‐State Alliances (SAS, NCS, WSEA)
1996QUEST EBT
Operating Rules
2000 SNAP EBT
Interoperability Act
2002WY: first statewide offline WIC EBT
system
2004Nationwide SNAP
EBT
2005WA online WIC EBT
Demo
2009MI: first statewide online WIC EBT
system
2010Mandate for
nationwide WIC EBT by 2020
2010WIC Operating Rules and MIS‐WIC UI established
2017 WIC Status25 statewide
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Types of EBT
Restricted Use:SNAP EBT: A debit account that restricts access to a group of food itemsWIC EBT: A debit account that restricts access to specific food itemsRestricted Cash EBT: A debit account that restricts payments to a specific service or commodity
At this time, these types of EBT are managed by an EBT system using a government‐issued card.
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Types of EBT
Unrestricted Use:Unrestricted Cash EBT: A debit account provided to a client without a bank or checking account. Can be another program account on a card that also has restricted use benefits.
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Benefits that can be Accessed by EBT
Benefit ProgramsSNAPTANFWICSummer EBT for Children
Eligibility or AccessChild CareHead StartImmunizationMedicaid
Payment ProgramsChild CareChild SupportCorrectionsEnergy AssistanceFoster CareGovernment PayrollSchool LunchSocial SecurityUnemployment
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Pop Quiz!
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HOW DOES EBT WORK?(And Other Questions About EBT)
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Basic EBT
How EBT Works – In General1. Eligibility system calculates the benefit due to the
client/household2. Eligibility system initiates a notice/message to the EBT
system of the amount of the benefit3. The benefit amount is maintained in the client/household
account in the EBT system4. The client/household accesses benefits by using an EBT card5. The EBT system draws a payment from a government bank
and settles the payment to the retailer or provider
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Systems that Interface with the EBT System
EBT SystemEligibility/
Certification System
FNS Systems
Retailer and Provider Systems
Point of Sale Terminals
EBT GatewayThird Party Processors
Automated Clearinghouse
Network
Federal Reserve Bank
State or Treasury Bank
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EBT Access Method
Magnetic Stripe CardSmart Card – Embedded with an Integrated Circuit Chip Branded Debit CardBiometricsSmart Phone
Authenticating the individual by who you are (card, biometric, smart phone) and what you know (PIN).
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EBT Hardware
Government OfficesPIN Selection TerminalsMagnetic Swipe Card ReadersSmart Card Read/Write TerminalsBiometric Capture Devices
Retailers and ProvidersEBT‐only Stand‐beside POS TerminalsBar Code ScannersBiometric Read DevicesIntegrated Electronic Cash Register SystemsCommercial Stand‐beside POS TerminalMobile POSAutomated Teller Machines (ATMs) – Cash Benefits Only
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Basic EBT System
Agency EnvironmentInterface
Accounts, Benefits, Cards
WIC also includes:
APL, Retailer
Local Office Local Office
Local Office
Eligibility / Certification System
Payment Authorization
EBT Environment
EBT Processing System
Bank Interface
Provider RetailerATM
Provider RetailerATMProvider
RetailerATM
Benefit Redemption
Account Management
Program Management
Client Processing
Customer ServicePublic
Networks
Clients
State or Federal Designated Bank
Private Networks
Pop Quiz!
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EBT System Core Functions
Account ManagementCard ManagementBenefit ManagementTransaction ProcessingSettlement and ReconciliationReporting
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Account Management
Upon receipt of applicable data from the Agency system, the EBT system:Establishes a unique account for each client or householdMaintains basic demographic data– Needed to mail replacement cards– Needed to identify the cardholder to the customer service center
Maintains a history of current and past cards issued to the client and to the household
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The EBT Card can be issued through the EBT System or the Agency eligibility/certification system. The EBT system:– Maintains a history of each card issued and “statused” – Maintains the PIN associated with each card – unless the Agency is issuing smart cards
– May allow more than one card to be issued to a household If a smart card is used, there can only be one card issued to a household. The PIN is encrypted and encoded to the card’s chip. The EBT system does not necessarily need to know cards issued but must know cards reported lost or stolen.
Card Management
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Benefit Management
Benefits are issued in the eligibility/certification system and transmitted to the EBT System.– The benefit balance is maintained in the client or household account
– The account may have one or more types of benefits (e.g., SNAP and TANF)
– The benefits can be credited or debited by the Agency system or through transactions from the retailer, provider or ATM
– The EBT system expires or expunges benefits according to their expiration date and program rules.
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Transaction Processing
From a retailer, provider or ATM, the EBT System: – Receives message‐based transactions or file uploads– Typical transaction types may be:
• Purchase• Withdraw• Void• Reversal• Balance Inquiry
– Authorizes or rejects the transaction after validating the card, the PIN, the access point, and the benefits
– Updates the benefit balance in the household account
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Retail System Alternatives
Integrated Cash RegisterTypical for chain and multi‐lane or vendors with cash registers that are SNAP/eWIC ready, but encouraged for all
Operate like all other tender typesTypically separate equipment not requiredStreamlined approach to SNAP/eWIC
Stand‐Beside Point‐of‐SaleSeparate from store cash register systemDouble scan with key entered price and discount amountsDaily totals are reported separately, payment separate from credit and debitCan work over dial‐up, or high speed internet connection
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Settlement and Reconciliation
The EBT System calculates the payments due to providers/retailers or funds withdrawn from the ATM and:– Initiates payment to providers/retailers or approves the withdrawal
• Requests funds from applicable program• Initiates ACH payment to providers/retailers or their processors
– Reconciles cost of withdrawals, purchases and/or services against funds settled to providers/retailers
• At the account level• At the program level
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Reporting
The eligibility system can be modified to use available EBT dataThe EBT System provides the Agency with standard and ad hoc reporting capabilities:– Financial Management Reports– Program Management Reports– Fraud Detection Reports– System Performance ReportsTypically more data than you’ll know what to do with.
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Data Warehouse
Some EBT Processors provide ad hoc reporting functionality, access to a data warehouse– High Risk Vendor behavior– Benefit Use: % total, subcategories, items, cash value benefits
– Demographics: participant characteristics, store location
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Pop Quiz!
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EBT System Additional Support
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State Agency Administrative Functions
Client Access to Account Information and Services-Through voice response-Through client web portal
Provider/Retailer Access to Payment Information and Services
System Security
System Audits
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System Processing ServicesCustomer
Service/Help Desk
Retailer Support
Card Fulfillment
Contract one provider for all components
Contract different providers for each component
Manage one or more components internally
Procurement Options:
Hardware
Components of EBT
Training
Pop Quiz!
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Offline and OnlineBenefit Issuance
OfflineBenefits loaded to smart card, EBT system updated through batch processNo telecommunications is required to load card Requires smart card reader/writerRequires physical presence of card at issuance locationBenefit changes require presence of card
OnlineBenefits are posted to a EBT system central database over telecommunications linesRequires telecommunications from clinic to EBT systemCard reader can be used, but not requiredDoes not require physical presence of card at issuance locationBenefit changes do not require presence of card
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Offline and OnlineRetail Transactions
Uses smart cards that maintain benefit information on the cardTransactions occur between the card and the retail systemTransactions are saved by retail system and a daily file is transmitted to the EBT system for processing payments
Uses magnetic stripe cards to access account information on the EBT systemTransactions occur live between the retail system and the EBT systemThe EBT system determines the payment amount based on transactions that occur during a set 24 hour timeframe
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Offline Online
Online Transaction Processing
Eligibility / Certification System
EBT Host Processor
Interface
Gateway
Acquirer / TPP
R R RR RRetailer
Connects Directly to
Host
Retailer Connects to
Gateway
Retailer Connects through
Acquirer to Gateway
State Agency 2 EBT Host Processor
Gateway
Transactions occur through real-time messages transmitted from the retailer to the host processor
Acquirer / TPP
R R RRetailer
Connects through
Acquirer to Host
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Offline Transaction Processing
Certification / Eligibility System
EBT Settlement Server
Interface
Single Retailer
State Agency 2 Settlement Server
State Agency 3 Settlement Server
Multi‐State Vendor
Local Chain
R R R
Daily or Real Time
Real Time
Chain Submits Claims for Multiple Locations/ Single
State
Single Retailer or Location / Single State
Single Retailer or Location /
Multiple States
Multi‐State Chain
R R R
Daily or Real Time
Real Time
Chain Submits Claims for Multiple Locations/ Multiple
States
Real TimeReal Time
Daily
Vendor transmits claim files to State agency Settlement server. Receives APL, HCL and auto-recon files from settlement server
Transaction occurs real time between the smart card and the store system
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Offline and OnlineAccess to Balance/Transaction Data
OfflineCard maintains current balance, EBT system balance is not up‐to‐date until all transactions have been sent for processing by retailersBalance can be obtained through retail or clinic balance inquiry transactionTransaction data is available from EBT system after claims have been processed
OnlineEBT system always has current balance, can be accessed by MISBalance can be obtained through: retail or clinic balance inquiry, automated phone line, web portal, phone app, or text messagingTransaction data available immediately as soon as transaction is processed 35
What Are the Impacts to Clinics and Clients?
Offline EBT Online EBT
Only one card per household One or more cards per household
The encrypted PIN is written to the card’s chip through card reader/writer in the clinic
Encrypted PIN is held at EBT system; may be selected at the clinic, via IVR or client web portal
Benefits are loaded on the chip in the clinic Benefits are sent to and held at the EBT system
Cardholders/participants must return to clinic with the card to update benefits or receive additional benefits
Benefits may be adjusted or new benefits can be sent to the account without the cardholder/participant or the card having to be at the clinic
A card with an unreadable chip cannot be used at the store; the client must get a replacement card
A card with an unreadable magnetic stripe may be used by manually entering the card number into the POS
Clients must return to the clinic to receive a replacement card; Clients must wait for a replacement card until all transactions are cleared (up to 48 hours)
Clients may receive a replacement card at the clinic or in the mail by calling customer service (if available in their state); no waiting time to access benefits
After several unsuccessful PIN attempts, card may lock. Clients must return to the clinic to unlock their card
After several unsuccessful PIN attempts, access to account may lock. Clients must call customer service or wait until midnight for a card unlock
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How is WIC EBT Different?
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SNAP vs. WICWIC SNAPAn individual food prescription based on nutritional andhealth status; foods are specifically selected based onnutritional content
A dollar amount to a family unit based on economic need
Benefits can only be purchased during the benefit periodwith no rollout
Benefits can roll over to the next month
All food items have an established not‐to‐exceed amount Benefits are provided at a total dollar amount rather thanper food item
Retailers are typically defined by a peer group Retailers are classified by type; currently there are 25 firmtypes.
Benefits are issued as specific food items regardless of price,requiring a much more complex transaction
Purchases are for a cash value requiring a simple request /response transaction
Food items have to be identified in a retailer’s system bytheir UPCs or PLU
SNAP has few food choice restrictions
Benefits are valid in the issuing state Benefits are valid nationwide; SNAP benefits must beportable.
Benefit IssuanceWIC benefits are issued for periods of 30 days (just like paper). Up to three months of benefits may be issued. To do this with WIC EBT:
Every food benefit issued to a participant is transmitted with an accompanying first date to use (FDTU) and last date to use (LDTU).The EBT system cannot allow purchases of the household’s food items prior to their FDTU or after their LDTU.While benefits are still issued to a participant, WIC EBT accounts are aggregated (combined) at the household level. This means that every participant in the household must have the same LDTU dates. Some states use a calendar month and some use a rolling month for issuance of benefits.
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Authorized Product ListEach WIC State Agency determines which food items it will approve for their WIC clients within defined categories and subcategories and gathers UPCs associated with their approved food itemsAll Universal Product Codes (UPCs) and Price Look Up (PLUs) codes for approved WIC items are distributed to retail systems in the Approved Product List (APL) file. Foods are represented by:– Category (Cat)– Subcategory (Subcat)– Quantity (Qty)– Unit of measure (UOM)Retail systems download the APL everyday to process new or updated itemsThe APL is used as part of the purchase along with the balance to identify what can be purchased by the cardholder
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Use of Approved Product List
For each item:Does the item (UPC/PLU) appear in the APL?Is the item’s subcategory present in the account in sufficient quantities?
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WIC EBT Process in the Retail Store
Card is swiped or inserted and the cardholder enters
her/his PIN
System validates the card, PIN and retailer
Balance obtained Each food item is scanned•Compared to APL to determine if it is an allowable WIC item•Compared to cardholder balance to determine if there is sufficient balance to purchase
Store price is captured for each food item
Discounts such as coupons, loyalty cards or other store or manufacturer specials
are captured
The system approves/denies the transaction. If approved:•The household’s account balance is reduced by the amounts (quantity) of each item being purchased, and •Paid amount for the transaction calculated
Receipt printed•Purchase details and the new food balance •Expiration date of available food items
WIC EBT Balance
A WIC benefit balance is a combination of food balancesIncludes:– Subcategory (Subcat)
– Quantity (Qty)– Unit of measure (UOM)
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Cost ContainmentWIC State Agencies are charged with containing the costs of each WIC food item. This means:
The EBT system (or the certification system) must calculate maximum allowable payment (or not to exceed [NTE] amount) for each item for each WIC vendor peer group (peer groups are defined by the WIC State Agency)NTEs are calculated based on actual purchase prices of the food item within each peer groupNTEs may be calculated at the subcategory or the UPC levelFor each food item purchased, the EBT system has to verify that the price does not exceed the NTE for the peer group. If the price exceeds the NTE, the EBT system will only pay up to the NTE amount
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Pop Quiz!
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Benefits of WIC EBT to the State
Eliminates paper checks/vouchersNTEs calculated based on actual purchase price of the food itemEBT system only pays up to the NTE amountEBT system expires benefits Access to timely data on food purchasesEnhanced capacity to prevent or detect program abuse
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Benefits of WIC EBT to the Retailers
Mixed basket at client’s choice with online EBT; no need to separate out WIC items for stores with an integrated ECRNo cashier “policing” authorized itemsEliminates cashier errors that cause loss of month and assessment of bank reject feesFaster transactions during checkoutNo longer needing to appeal for payment as NTE amount is paid
Improved ability to track changes in store inventory47
Benefits of WIC EBT to the Participant
More flexibility and choice regarding when and whether to purchase WIC foodsAbility to combine a family’s benefit allows for purchasing certain items by quantityReduced stigma in storeImproved checkout processEBT card more portable than paper FIs
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Pop Quiz!
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Thank You!
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Lisa Cwanger Ichilov, PMP®Director of Project Management, BCA(480) [email protected]
Mary Hinderer, PMP®Director, MAXIMUS(757) [email protected]
