ACKNOWLEDGEMENTS
This report would not have been possible without the 49 states responding to the
in-depth state assessment earlier this year. The Center is tremendously thankful
for the states on the State Engagement Subcommittee (AL, DC, CT, FL, IA, MD,
MO, NE, NJ, OK, TX, and UT) for helping shape the on-line questionnaire. The
Center is extremely grateful for USDOL’s input, and commitment to helping
states combat UI fraud and improper payments. The Center’s Steering
Committee (CO, FL, MT, NE, NJ, NY, OH, SC, TX, UT, and WA) also supported the
State Engagement effort and played an important role for the issuance of this
report. Finally, Members of the State Engagement Team: Brian Langley—Team
Lead, UI SMEs: Laura Boyett, Maria Nobel, Christine Paquette, and Bill Starks,
Center Project Director, Randy Gillespie, and Senior Policy Advisor, Jim Van
Erden.
2
UNEMPLOYMENT INSURANCE
DETAILED INTEGRITY STATE ASSESSMENT REPORT November 2016
Executive Summary
The 2016 Unemployment Insurance (UI) Integrity Detailed Assessment is a
snapshot in time of current state efforts to combat UI fraud and improper
payments, their integrity tools, and related procedures. The responses to this
assessment may not portray all of the integrity tools and practices currently
being discussed or employed by the states as the assessment questions targeted
specific integrity functions.
This report is the second state assessment report developed under the National
Association of State Workforce Agencies (NASWA)’s UI Integrity Center (Center)
State Engagement effort. The State Engagement effort involves states in Center
activities with the goal of improving UI integrity. These activities include state
assessments and reporting on current integrity efforts, convening states in
regularly scheduled information sharing sessions, and creating a model integrity
operational blueprint to inform and guide states’ integrity efforts.
The information gathered through the 2016 assessment, and others, will be a
catalyst for a series of white papers on integrity topics of most interest to the UI
community. All of the assessment information will ultimately be loaded into a
fully accessible, continuously maintained, State Portfolio Data Base (SPD). The
SPD application will provide an interactive resource of state integrity practices
for easier consumption and use by the states. The SPD will be available early
next year through the UI Community of Practice Integrity tab on the Center’s
website. The SPD application in the Center’s Digital Library will allow states to
exchange state-specific information as it relates to UI fraud and improper
payments.
The 2016 state assessment is more robust than the 2015 version, with fifty main
questions and over one hundred subset questions depending on how the main
questions were answered. The assessment was released to states earlier this
year with 49 states completing the on-line in-depth state assessment resulting in
a ninety-four percent response rate.
The responses show that states are making in-roads in implementing new tools
and processes to help identify UI fraudulent activities, reduce UI improper
payments, and strengthen trust fund solvency. This report also highlights a
continuing need for future outreach to states to gather additional information
and clarify existing procedures and tools.
3
Table of Contents Executive Summary ................................................................................................................................................... 2
The 2016 State Integrity Assessment............................................................................................................................. 5
Operations Section ......................................................................................................................................................... 7
Q1) Does your state have a shareable copy of your UI agency’s organizational chart? ............................................ 7
Q2) Does your state verify out-of-state work registration? ....................................................................................... 7
Q3) Does your state have an automated case management system for the UI Benefit Payment Control (BPC) unit?
................................................................................................................................................................................... 8
Q4) Adjudication - Does your BPC Unit issue determinations? ................................................................................ 9
Q5) Does your state use the SIDES Earnings Verification system (E-Response)? ................................................. 10
Q6) Has your state modified its integrity messaging in the last twelve months? .................................................... 10
Protocol (IP) Address Section ..................................................................................................................................... 12
Q7) As part of your state’s UI process, does your state capture a claimant’s or employer’s IP address? ............... 12
Q8) Does your state screen IP addresses? ................................................................................................................ 13
Q9) Some states have a repository for a "hot" IP address list for known bad or prior fraudulent IP address. Does
your state compile a "hot" IP address list? ............................................................................................................... 17
Q10) Does your state have a process for verifying IP addresses that are "masked" or filed from a proxy server? . 18
Training Section .......................................................................................................................................................... 19
Q11) Does your state UI agency offer training programs specific to addressing BPC or UI integrity issues
designed to prevent, detect, and recover improper payments (both fraud and non-fraud)? ..................................... 19
Recoupment Section .................................................................................................................................................... 21
Q12) Does your state currently participate in TOP to collect delinquent UI employer tax debts? .......................... 21
Q13) Does your state use any outside data sources or tools for locating (skip tracing) debtors' most current
address? ................................................................................................................................................................... 22
Q14) Does your state have an automated collections case management system (separate and apart from your
automated billing system)? ...................................................................................................................................... 23
Q15) Does your state have any automated processes for contacting debtors to recover benefit overpayments or tax
debts? ....................................................................................................................................................................... 24
Q16) Does your state allow electronic payment options on overpayments or tax debts? ........................................ 25
Q17) Does your state have a State Income Tax offset program? ............................................................................. 26
Q18) Does your state actively recover UI benefit overpayments through wage garnishments issued to the
claimant's current employer(s)? ............................................................................................................................... 26
Q19) Does your state actively process liens or levy bank accounts on overpayments or tax debts? ....................... 27
Q20) Does your state leverage the issuance and/or renewal of any business or professional licenses to recover UI
overpayment and/or delinquent employer tax debts? .............................................................................................. 28
Q21) What other sources are actively used to recover UI overpayments and/or delinquent employer tax debts? .. 28
Q22) Does your state actively file adversary proceedings objecting to the discharge of fraudulent UI
overpayments in bankruptcy? .................................................................................................................................. 30
Q23) Does your state require certain employers to post a cash bond amount to ensure future tax debts are paid? . 30
Q24) Does your state refer or contract out UI debt recovery? ................................................................................. 31
Q25) What other collection actions does your state find motivating for employers or claimants to settle their UI
debts? ....................................................................................................................................................................... 32
4
Prosecution Section ..................................................................................................................................................... 34
Q26) Does your state prosecute for criminal charges on UI fraud overpayment cases? .......................................... 34
Q27) Does your state prosecute for criminal charges on employer tax cases? ........................................................ 35
Q29) Does your state use law enforcement officers to support the criminal prosecution of UI fraud cases? .......... 37
Data Analytics and Predictive Modeling Section ........................................................................................................ 38
Q30) Does your state use predictive modeling for fraud prevention and detection? ............................................... 38
Q31) Does your state use data analytics for fraud prevention and detection? ......................................................... 40
Q32) Does your state have any Standard Operating Procedures or other documentation of work processes used in
conjunction with your data analytics and predictive modeling applications that could be shared with the Center? 42
Cross Match Section .................................................................................................................................................... 43
Q33) Does your UI agency cross match with your state’s State Directory of New Hires (SDNH)? ....................... 43
Q34) Which UI claims does your state run against the National Directory of New Hires (NDNH)? ..................... 45
Q35) What is the frequency of your cross match with the NDNH? ........................................................................ 46
Q36) Does your state UI agency cross match against incarceration data? ............................................................... 46
Q37) Does your state have an agreement in place with the U.S. Social Security Administration to access
their Prisoner Update Processing System (PUPS) information? .............................................................................. 47
Q38) Does your state cross match Continued Claims against death records or the U.S. Social Security
Administration's Death Master File (DMF)? ........................................................................................................... 47
Q39) Does your state run a cross match on death records or the Death Master File against claimants with existing
overpayments? ......................................................................................................................................................... 48
Q40) Does your state conduct fictitious employer detection cross matches? .......................................................... 49
Q41) Does your state's quarterly wage cross match run more than once a quarter? ................................................ 50
Q42) As it relates to cross matches being run, does your state have a process (automated or not) for prioritizing
hits to investigators as workload assignments? ....................................................................................................... 52
Q43) Has your state implemented a new cross match or revised an existing cross match in the last 12 months?... 53
ID Verification Section ................................................................................................................................................ 55
Q44) Does your state have a verification process for Identity Theft? ..................................................................... 55
Q45) Does your state cross match against driver license or state identification card information? ......................... 56
Integrity Data Hub Section .......................................................................................................................................... 58
Q46) What specific national database cross matches, if made available by the IDH, would provide the most value
to your state? ............................................................................................................................................................ 58
Q47) Does your state currently collect bad (suspicious) actor information? ........................................................... 59
Q48) Would your state be willing to submit claimant and employer UI data to the IDH? ...................................... 59
Q49) Do states prefer that the Data Hub pushes information to states or that states pull information from the Data
Hub. ......................................................................................................................................................................... 60
Q50) Has your state changed, or initiated, a new or innovative process in the last twelve months that relates to UI
Integrity in any of the following areas that was not answered in any of the prior questions? ................................. 60
Conclusion ................................................................................................................................................................... 63
Future Efforts ........................................................................................................................................................... 63
ATTACHMENT A .................................................................................................................................................. 64
The UI Integrity In-depth State Assessment questionnaire sections ........................................................................ 64
5
The 2016 State Integrity Assessment
The Center is a joint Federal and State initiative through NASWA, funded by the
U.S. Department of Labor, to assist states in their efforts to improve integrity in
their unemployment insurance programs. The Center’s mission is to be a source
for integrity strategies, information, and resources, focusing particularly on the
prevention, detection, and recovery of improper payments, fraud and
delinquent employer contributions.
The completion of this assessment and accompanying report falls under the
Center’s State Engagement effort, a cornerstone of the Center’s mission. This
report facilitates that effort by gathering and sharing integrity-related
information among states.
The 2016 Unemployment Insurance Integrity Detailed Assessment Report (IDAR)
describes the inventory of specific UI integrity practices, tools, and strategies
currently used in state operations. This report is the second in a continuing series
of state assessment reports with the first completed and published in October
2015.
This IDAR is divided into nine main sections including:
Operations;
Internet Protocol (IP) Usage;
Training;
Benefit Recoupment;
Fraud Prosecutions;
Predictive Modeling and Data Analytics;
Data Cross matching;
Identity Verification; and
Integrity Data Hub.
The information gathered through this assessment, and other state polling, will
serve as a catalyst for upcoming white papers on integrity topics of most interest
to the UI community. All of the assessment information will ultimately be loaded
into a fully accessible, continuously maintained SPD application of state integrity
practices for easier consumption and use by the states. The information will be
available early next year through the UI Community of Practice Integrity tab on
the Center’s website.
The 2016 IDAR contains fifty primary questions and more than one hundred
subset questions that were addressed depending on how the primary questions
were answered. While the assessment was comprehensive in nature, the
6
responses from states may not portray all of the integrity tools and practices
currently being discussed or employed.
The assessment was released to states at the end of February 2016 and
responses were complete in April 2016. Forty-nine states completed the on-line
assessment resulting in a ninety-four percent response rate. For an overview of
the assessment questions, please see Appendix A.
For more information on the Center and all of our initiatives, please visit:
https://ui.workforcegps.org/ and click the “Integrity” tab
or
http://www.naswa.org/integrity/.
7
Operations Section
Q1) Does your state have a shareable copy of your UI agency’s organizational
chart?
The Center gathered individual state organizational information to better inform
its work as we continue to map out our engagement strategy. Developing a
better understanding of various state structures throughout the country, and the
roles and responsibilities of each, will be helpful when states assess their own
restructuring needs and/or look for examples of how effective operations are
structured.
Thirty-six states shared a copy of their organizational chart. The information
gathered is not listed in this report but will be made available online through the
SPD application.
Insights gained from a review of the organizational charts include the following:
Twenty-five states have their Benefit Payment Control (BPC), or UI Integrity
unit, report to the UI Director;
Seven states have their BPC, or UI Integrity unit, report to the Agency’s
Commissioner/Director/Secretary; and
Four states have their BPC, or UI Integrity unit, report to a different office
such as the General Council, separate agency division, or split reporting
duties across divisions.
Q2) Does your state verify out-of-state work registration?
One of the leading causes for improper payments occurs when claimants do
not adhere to work registration requirements as prescribed in state laws and
policies. The Center inquired as to what states were doing to verify if interstate
claimants’ had registered for work in the agent state’s public workforce system.
In this assessment, twenty-three states said they verify out-of-state work
registrations as a matter of protocol. Five states identify all out-of-state
claimants and send a notification of the requirement to register for work. In
those states, claimants are given a date to provide proof of their registration. If
no proof is provided, a hold, denial, or adjudication appointment is put on the
claim. Some states have agreements with neighboring states for an automated
interface, whereas other states perform this via a manual process.
8
Q3) Does your state have an automated case management system for the UI
Benefit Payment Control (BPC) unit?
States that said yes to this question were also asked the following:
a) Was the automated system developed in-house or was an outside vendor
used?
b) What year was the system implemented or last updated?
c) How are the automated cases assigned? and
d) Does your state tie individual performance standards to the BPC cases
assigned to staff?
Of the thirty states that have an automated BPC case management system,
eleven systems were developed in-house while eighteen states had a vendor
create their system. Five companies were named as vendors used:
On Point Technology;
Deloitte;
Fast Enterprises;
Pondera Solutions; and
RedMane Technology.
The average age of state BPC case management systems is 8.3 years with the
oldest system developed in 1989, and the newest implemented in 2016.
Updates to the systems averaged 2.8 years.
The responses related to automated case assignment methodology is depicted
in the table below.
YES 30
NO19
Automated Case Management System(#states)
9
The twelve states that provided additional comments in the “other” field, listed
assignment factors such as:
The last four digits of the claimant’s SSN;
The perceived validity of the case;
The claim type (fraud or non-fraud);
Investigator workload; and
Wage audit notices.
When asked if states tie individual performance standards to the BPC cases
assigned to staff, the majority of the thirty states that responded indicated they
do tie in quality, timeliness, and quantity to individual performance standards.
This tracks closely with Benefits Timeliness and Quality (BTQ) performance
evaluation variables for UI adjudication. Some of the respondents stated they
also look at monthly expectations, the number of cases opened during a
specific time period, and investigation results when measuring staff
performance.
Q4) Adjudication - Does your BPC Unit issue determinations?
Overpayment Determinations issued by BPC Unit (# of states)
Yes No
Non-fraud issues 44 5
Fraud issues 45 4
21
17
12
7 64
Cross match or source
dependent
Potential dollar amount
threshold
Other Based on location Previous overpayment
Difficulty of the case
How Cases are Assigned (# of states)
10
The majority of states’ BPC units adjudicate both fraud and non-fraud issues. In
addition, one state indicated their agency does not structurally have a BPC unit.
In the 2015 assessment, three common procedures for adjudication were
mentioned:
UI fraud investigative staff adjudicate all issues and refer other non-
monetary issues to another unit;
UI fraud investigative staff adjudicate all non-monetary and fraud/non-
fraud issues for their cases; and
All non-monetary and fraud/non-fraud determinations are made by an
adjudications unit outside the UI fraud or BPC unit.
The state responses this year reinforced the answers to last year’s assessment,
that states’ fraud operations have their investigators adjudicate both fraud and
non-fraud issues once the investigation is complete. A few states forward non-
fraud issues to their regular UI adjudication process.
Q5) Does your state use the SIDES Earnings Verification system (E-Response)?
The SIDES Earnings Verification application automatically sends wage
verification notices to employers through a state specific employer portal. Using
an automated process to communicate and receive information from
employers, provides faster information for weekly wage data allowing states to
more quickly identify if a claimant is working and subsequently failing to report
their weekly earnings. Manual paper responses from employers are less timely
and are a leading cause of overpayments.
The results of state responses demonstrated confusion in answering this question.
It appears respondents didn’t distinguish between the SIDES’ Separation
Information exchange and the SIDES’ Earnings Verification exchange.
For more information about SIDES and E-Response, please visit
http://www.itsc.org/Pages/ui_SIDES_home.aspx.
Q6) Has your state modified its integrity messaging in the last twelve months?
Forty-four states answered this question. The majority of current upgrades to UI
integrity messaging involve the state UI agency’s website as the medium for
their messaging, with specific letters to claimants and employers as the
secondary medium. Eighteen states indicated they had modified their UI
integrity messaging on social media accounts. Fourteen states also provided
written comments such as, a pop-up messaging (“nudging”) in their claimant
11
system, while another state cited their factsheets to employers and claimants on
UI Fraud and Integrity. One state said they were starting a radio campaign in
the summer of 2016 on misclassified workers.
32
27
21 20 19
14
State UI Agency'swebsite
Letters toclaimants
Letters toemployers
Interactive VoiceResponse (IVR)
System
Social mediaaccounts
Other - Write In
Areas States have Changed their Integrity Messaging in the Last Year (# of states)
12
Protocol (IP) Address Section
Anytime a device connects to the internet, the device is assigned a number
called an IP address. This IP address is transmitted to any servers visited and is
logged on those servers, leaving a trail of Internet activity. As the use of data
analytics and data cross matching grows, capturing a claimants IP address is
proving to be helpful in combatting improper payments.
Tracking IP addresses helps states identify if an individual filing for UI benefits is
outside the country or using a suspicious address that is linked to prior fraudulent
activities. Many state UI laws prohibit individuals from filing a claim from outside
the United States, except in limited circumstances.
Q7) As part of your state’s UI process, does your state capture a claimant’s or
employer’s IP address?
Thirty-eight states answered that the state capture an IP address, while nine
indicated they did not, as shown in the chart below.
Yes38
No9
IP Address Captured (# of states)
13
If a state said yes to this question, they were also asked what their UI process(es)
were to capture an IP address.
Those states providing comments mentioned additional processes or
applications for capturing IP addresses, such as:
Each time a claimant uses their UI system;
With their on-line claimant self-service address change or when direct
deposit enrollment is accessed;
Their employer business registration application;
Using Splunk software to capture IP address and the state is able to pull
the IP addresses as needed for investigations;
During log-ins, monetary calculator, address updates, and method of
payment updates;
When the status of a UI claim is viewed; and
For out-of-state initial claims.
Q8) Does your state screen IP addresses?
YES28
NO19
States that Screen IP Addresses(# of states)
3328 27
13 11 9
Processes that Capture IP Addresses (# of states)
14
The states that answered yes to this question were also asked:
a) Types of IP addresses screened?
b) Types of claims checked when screening for IP addresses?
c) What actions does your state take if a foreign IP address is detected
during claims processing?
d) Which additional action(s) are taken when the state prevents a claim
from being completed?
e) Does your state allow UI eligibility for claimants filing for outside the United
States or Canada?
f) What UI eligibility must be met if a claim is filed outside the U.S. or
Canada? and
g) What technology does your state use to identify IP addresses?
When asked about actions taken once a suspicious IP address is identified,
fifteen states block the claim if the on-line claim is filed from a foreign IP address.
Twelve states allow the claim to be filed but either place an issue on it for
adjudication, or an alert is sent to staff.
When asked what types of claims states check when screening IP addresses,
close to seventy percent of states (28) checking yes for this question said they
screened for all claim types – initial, additional, reopened, and weekly
continued claims (see chart below).
26
15 14
Originating from a foreign country Both Originating within the US
Types of IP Addreses Screened (# of states)
15
When foreign IP addresses are encountered, states have several different
processes, including:
Blocking the claim from being filed;
Allow the claim to be filed, but creating an issue for adjudication;
Allowing the claim to be filed and sending an alert to staff for review; and
Allowing the claim to be filed, but running it through a scoring mechanism
to determine whether or not a review should occur.
26
21 20 20 19
Initial claims Weekly continuedclaims
Additional claims Reopened claims All of the above
Types of UI Claims Checked when Screening for IP Addresses(# of states)
1115
Action Taken on Foreign IP Addresses(# of states)
Allow but Flagged Block Claim
16
When asked, does your state allow UI eligibility for claimants filing from outside
the United States or Canada, fourteen states allow this, ten of those states allow
claimants to file from outside the U.S. or Canada if they meet certain eligibility
criteria, while seven of the fourteen states allow claimants to file from outside the
U.S. or Canada if they are a trailing military spouse. One state indicated their UI
law allows for filing in Federal territories, such as Guam, or other areas where
military personnel might be stationed. Another state said their UI law allows if
work search requirements are met since some jobs are global.
For technology, fourteen states use commercial IP detection software from the
following vendors:
GeoIPA databases;
MaxMind;
F5 ASM Firewall;
Oracle Identity Manager; and
Cisco SourceFire IPS.
10
7
1
Meets certain A&A requirements Trailing military Spouse Other
Allow UI Eligibility Outside the U.S. or Canada (# of states)
14
11
6
Vendor Software Developed in-house Other
IP Address Detection Process - In-house vs Vendor (# of states)
17
Additional information provided includes eleven states that block both foreign
and suspicious American IP addresses as well as having the IP address check as
part of all of their claim functions.
Q9) Some states have a repository for a "hot" IP address list for known bad or
prior fraudulent IP address. Does your state compile a "hot" IP address list?
State’s answering yes to this question were also asked:
a) Is this list incorporated in your state’s data analytics method or process?
and
b) Does your state use the “hot” IP address list as a cross match source?
Of the twenty states that answered yes to this question, eleven states
incorporate the list in their state's data analytics process.
When asked to briefly describe the method for incorporating the "hot" IP address
list into their state's data analytics process, nineteen states provided comments.
The comments varied depending on how the respondent interpreted this
question.
Some states provided “technical” detail about their systems integrating the list
whereas other states approached their response from a “process” perspective
describing how the data is used. A few states indicated they used a manual
process to determine if there is a legitimate reason for the cross match hit.
When asked if their state uses the "hot" IP address list as a cross match source,
ten states said their system generates a report of flagged claims for further
investigation.
YES20
NO27
Compile a "Hot" IP Address List (# of states)
18
Q10) Does your state have a process for verifying IP addresses that are
"masked" or filed from a proxy server?
Masking the IP address refers to hiding the actual location of where the
computer is connecting to the Internet. The top four reasons people
intentionally hide their IP address are:
To hide their geographical location;
To prevent website tracking;
To avoid leaving a digital footprint; and
To bypass any bans or blacklisting of their IP address.
Fourteen states said they have a process for verifying IP addresses that are
‘masked’ or filed from a proxy server.
YES14
NO33
Verify Masked IP Addresses (# of states)
19
Training Section
Many states offer training including: adjudication methods, computer system
updates, and new processes or procedures. The Center wanted to know if
states provide specific training addressing BPC or UI integrity issues.
Q11) Does your state UI agency offer training programs specific to addressing
BPC or UI integrity issues designed to prevent, detect, and recover improper
payments (both fraud and non-fraud)?
Thirty-five states said they offer UI integrity and fraud training to their
investigators. As a follow up to this question, we asked who provides the
training?
Other training programs mentioned were:
Mathematica’s UI integrity training modules,
Guest speakers from law enforcement partners, such as State Police,
Federal Department of Homeland Security, County Prosecutor's Office,
and Attorney General's Office,
USDOL’s BAM auditor and supervisor training, and
One state has developed computer-based training on UI integrity.
When asked about what topics they offer for integrity training, the bulk of the
responses centered on prevention, detection, and collections. In addition to
states saying they train staff on case management and collections, eleven
states provided other comments for topics they offer for integrity training. Some
of the comments included:
Improper payments and criminal prosecution;
31
24
10
4
BPC/Integrity staff Agency, or UI Division,training unit
Other Outside training program
Who trains your BPC Staff? (# of states)
20
Case sharing between adjudication and fraud unit;
UI adjudication;
Presenting cases in administrative hearings and testifying in court;
Prosecution training, e.g., report writing, interviewing techniques, mock
interviews, and mock trial;
Fraud detection criteria and new employee investigative training;
Cross match types; and
Changes in agency policy and procedures.
33
30
2220
11
Detection Prevention Collections orrecovery
Case management Other
Topics for Integrity Training (# of states)
21
Recoupment Section
UI Improper payment recoupment methods vary widely by state. Gaining an
understanding of processes, procedures, vendors, and software used for
recoupment is the intent of these questions. Areas of interested included: the
Treasury Offset Program (TOP), skip tracing, case management systems, liens,
levying bank accounts, any automated processes, electronic payment options,
leveraging business licenses, bankruptcy filing, bonds, and contracting out for UI
debt recovery.
State responses to the following fourteen questions demonstrated how the
various state UI laws, regulations, and policies impact what collection tools
states have in recovering UI debts.
Q12) Does your state currently participate in TOP to collect delinquent UI
employer tax debts?
Federal law requires state UI agencies to participate in TOP to recover certain UI
benefit overpayments and tax debt. If a state said yes to this question, they
were also asked:
a) What were your recoveries for 2015?
b) Was your state using an automated or manual process to record the UI
employer tax debts in your state UI system? and
c) Was your state planning on including UI employer tax debt to TOP
requests? If so, when?
Currently, there are ten states participating in TOP to collect unpaid UI employer
tax debts. Asked if states were anticipating implementing the UI tax debt
component to TOP, ten said they were planning on implementing it sometime
this year for the 2016 tax season, and fifteen states noted after 2016.
10
15
States Particiapting in TOP UI Tax (# of states)
2016
After 2016
22
For more information on the collection numbers from TOP, please visit’s
Treasury’s most recent newsletter at:
https://fiscal.treasury.gov/fsservices/gov/debtColl/dms/top/stOutrch/debt_offse
ts_matter.htm.
Q13) Does your state use any outside data sources or tools for locating (skip
tracing) debtors' most current address?
Skip tracing is a colloquial term used to describe the process of locating a
person's whereabouts for any number of purposes.
Thirty-six states indicated they use external sources and tools for updating bad
addresses. For these states, they were also asked what data sources are used
for locating the most current address.
“Other” responses included the following:
County property records;
Current employer information;
Social services agency data;
Postal service;
Secretary of State’s office;
PACER bankruptcy system;
Internet searches;
LexisNexis/Accurint; and
Clear Software.
Comment: see Question 22 on page 30 describing PACER.
26
1917
14 13 12
2
Other State Directoryof New Hires
NationalDirectory ofNew Hires
Driver LicenseAgency
State RevenueDepartment
Social Media Credit BureauCompany
Skip Tracing Sources States Use(# states)
23
Q14) Does your state have an automated collections case management system
(separate and apart from your automated billing system)?
Nineteen states said they have a collections case management system that
helps prioritize assignments and other collection tools. States indicate their
systems are used for the following:
Billing;
Quarterly balance statements;
Repayment agreements;
Civil processing;
Bankruptcy status;
Warrants;
Some UI Tax work; and
One state said their collections case management system was built as
part of their UI Benefits system.
On-Point Technology’s RECOVER software solution was named for its automated
billing notices and payment agreements.
Other states’ comments about case management systems included:
Creates a task when a claimant’s repayment agreement is missed and
becomes delinquent;
Issues quarterly balance statements;
Presents cases when new information is received. It determines the status
of cases based on payments;
Assigns cases for delinquent employers which are flagged to show priority;
Automatically sends correspondence to claimants including: demands,
missed payment letters, payment plan agreements, and notice of intent
to garnish wages. It also creates alerts to indicate further review is
needed prior to sending notice of garnishment letters, second demands
that qualify for liens, and missed payments that require review to
YES19
NO30
Collections Case Management System (# of states)
24
determine next steps. Bankruptcy cases are tracked in the system but
handled manually by staff;
Advises staff of failed payment agreements or not meeting monthly
minimum payments, and generates work items for examiners. Also,
notifies of judgments and garnishment opportunities and expired payment
agreements where balances exist;
Automates the collection cycle and assignments are automatically
assigned to Tax Enforcement Officers at the time a Tax Warrant is issued;
Allows workload to be managed through the use of follow-up codes by
activity type, such as, debt has a bad address, sent to private collection
agency, or have bank proceedings underway;
Provides timely review and handling of civil actions and auto population
of applicable documents; and
Tracks a case throughout the collection process - it notifies staff if a
payment hasn't been received or if paperwork has not been received.
Q15) Does your state have any automated processes for contacting debtors to
recover benefit overpayments or tax debts?
Nineteen states answered yes to this question. Those states were asked what
automated methods are used.
Eight states also provided write-in comments that included:
Demand or payment plan letters;
Billing statements;
Automating the email notifications to employers for outstanding wage
audits and new hire employer compliance; and
Initiate garnishments and issue tax liens.
10
8
43
1
Targeted mailcampaign in
addition to yourmonthly billing
statement
Other Telephonic dialing(robo calls) - Agent-
less
Email notifications Telephonic dialing(robo calls) - Agent
available
Automated Process for Contacting Debtors (# of states)
25
Q16) Does your state allow electronic payment options on overpayments or tax
debts?
Thirty-eight states said they offered electronic payment. The assessment then
asked if states allowed either credit card and/or electronic check (ACH)
payments. Only four states said they offer both electronic check and credit
card payment options for claimants and employers. The remaining responses
were mixed as technology resources and banking options shape what states
are able to do. Some states allow credit card transactions for claimants only,
others allow ACH payments from employers but not for claimants. Four states
allow ACH payment for both parties, but not credit card options. One state
mentioned they had outsourced their payment website to ValuePay, which
allows both ACH and credit card payments.
As the chart above demonstrates, twenty-nine states allow for an automated
self-service process to electronically pay on UI debt. Eighteen additional states
said they assist with electronic payments.
A breakdown of state responses for electronic payment options are:
Three states offer only credit cards to claimants and only electronic
checks to employers;
Three states offer only electronic checks to employers and no electronic
payments options to claimants;
Five states offer only credit cards to claimants and both options to
employers;
5
12
14
8
6
15
Not Applicable
Manual Staff-assisted
Automated Self-serve
Electronic Payment Options on UI Benefit Debt (# of states)
Electronic Check (ACH) Credit Cards
26
One state offers both options to claimants and no electronic payment
options for employers;
Two states offer only credit cards to both claimants and employers;
Two states offer only electronic checks to claimants and both options to
employers;
Four states offer only the electronic check payment option to both
claimants and employers;
Two states offer both options to claimants and only electronic checks to
employers; and
Four states offer both options to claimants and employers.
When asked how credit card transaction fees are covered, the majority of the
twenty-six states responding said the transaction fees were passed along to the
employer and claimant. Six states said they covered the fees for claimants and
employers through their penalty and interest fund, while two states said they
covered the fees through the state’s general fund.
Q17) Does your state have a State Income Tax offset program?
Thirty-six states have a state income tax offset program, three do not, and nine
states do not have a state income tax. Five states indicated they are active in
offsetting employer tax debts in addition to claimant overpayments.
Q18) Does your state actively recover UI benefit overpayments through wage
garnishments issued to the claimant's current employer(s)?
Thirty-four states answered yes to this question.
When asked about the percentage of total annual overpayment collections
attributed to wage garnishments, seven states said their wage garnishment
process accounted for 11 to 42 percent of total improper payment collections.
YES34
NO15
Wage Garnishments (# of states)
27
The Center will use these responses to gather more information from states with
high collection percentages so best practices can be promoted to the UI system.
In the 2015 Assessment, states reported:
Cost to file the paperwork and time required to send staff to court to
obtain judgments were some reasons why several states don’t conduct
garnishments or do very few;
States most successful in collecting outstanding UI debt through
garnishments generally have an automated process with the courts or
state law doesn’t require a court order;
Several states use a lien process or an administrative order, rather than a
court order, to conduct wage garnishments; and
Most of the states not currently administering wage garnishments would
require state law changes in order to begin this practice.
Q19) Does your state actively process liens or levy bank accounts on
overpayments or tax debts?
Overall, forty-three states said they actively process liens and/or levy bank
accounts on UI benefit overpayments and/or tax debts. Only six states file liens
on personal and real property and also levy bank accounts for claimants and
employers. The remaining responses included a varying combination of liens
and levies on claimants and employers.
States were asked how they applied liens and levies. The processes used are
shown in the tables below.
YES43
NO6
Liens or Levy Bank Accounts(# of states)
28
Q20) Does your state leverage the issuance and/or renewal of any business or
professional licenses to recover UI overpayment and/or delinquent employer tax
debts?
Twenty-one states answered yes to this question. When asked what type of
licenses states leverage, responses included:
Liquor Licenses;
Contractors Licenses;
Commercial Fishing Licenses; and
Lottery Sales permits.
None of the states’ comments specifically identified freezing or taking away
licenses for benefit overpayment debts.
Q21) What other sources are actively used to recover UI overpayments and/or
delinquent employer tax debts?
Thirty-six states indicated they pursue other revenue sources for outstanding UI
debts as follows:
Claimants Employers
Automated 7 12
Manual 14 22
LiensClaimants Employers
Automated 2 5
Manual 8 24
Levies
YES21
NO28
Levying Licenses for Delinquent UI Debts(# of states)
29
“Other” responses include:
Mineral royalties;
Collection agencies;
Small claims court;
Bankruptcy monitoring;
Personal liability of Corporate Officers;
Interstate benefit offsets;
Recoupment liens filed on claimant’s social security number;
Recreational license suspended;
Halt state contracts;
Federal vendor offset;
Interstate Reciprocal Overpayment Recovery Arrangement (IRORA);
Controller warrant hold; and
Unclaimed property.
23
18
12 12
5
Lottery winnings Other State Vendorreceivables
Not applicable Casino winnings
Other Resources to Recover UI Debt (# states)
30
Q22) Does your state actively file adversary proceedings objecting to the
discharge of fraudulent UI overpayments in bankruptcy?
Generally speaking, fraud overpayments are not dischargeable under federal
bankruptcy law. Thirty-seven states confirmed they actively file adversary
proceedings objecting to the discharge of fraudulent UI overpayments.
Recent discussions with states on this topic have identified a spike in bankruptcy
filings, presumably due to TOP and its sixty-day notice. In addition, states have
said that barriers to pursuing bankruptcy petitions are caused by a general lack
of resources, a strict felony test, new staff, and new procedures. Many states
have multiple bankruptcy courts, further compounding the difficulty in
monitoring bankruptcy filings.
Several states have noted the use of Public Access to Court Electronic Records
(PACER) for notification and verification of individuals filing for
bankruptcy. Some states pursue criminal charges if the fraud overpayment
debt is tied up in bankruptcy court.
Q23) Does your state require certain employers to post a cash bond amount to
ensure future tax debts are paid?
YES22
NO25
Cash Bonds Required (# of states)
Yes37
NO11
Actively Pursue Bankruptcy Filings (# states)
31
Twenty-two states require certain employer groups to post a surety bond for UI
covered employment.
Seventeen states require it for reimbursable employers, four states utilize this for
industry specific employers, and four states make this a requirement for
chronically delinquent employers.
Four states in this group also commented they require a cash bond on
chronically delinquent employer accounts for both reimbursable and
contributory employers.
Q24) Does your state refer or contract out UI debt recovery?
The majority of states responding to this question do not contract or refer UI
debts for recovery actions. Of the ten states that do, four states indicated they
have a threshold on the age of the debt prior to referral, ranging from 45 days to
150 days.
Of the same ten states, five states use other state agencies to collect referred UI
overpayments, while five states contract out to a third party collector.
Five states refer for both UI claimant overpayments and UI tax debt. Of the
remaining states, two states refer only the UI tax debt and three states refer only
benefit overpayments.
Refer or Contract out UI Debt Recovery (# of States)
Other State
Agencies Contractor
Claimants Only 1 2
Employers Only 0 2
Both Claimants and Employers 4 1
YES10
NO39
Refer or Contract Out Collections(# states)
32
Q25) What other collection actions does your state find motivating for employers
or claimants to settle their UI debts?
Thirty-two states responded to this question. TOP notices, prosecutions, liens,
and wage garnishments were the primary categories mentioned as motivators
for individuals to settle their UI debt.
Specific state responses include:
Automated billing letters and prejudgment letters;
Developed a unit that is designated to make collection calls to employers
with delinquent accounts and claimants with outstanding overpayment
balances;
Court proceedings;
Prosecutions
Small claims court (civil actions) and filing with the state attorney's
office
Offering claimants the option to repay their overpayment to
prevent prosecution
Federal Income Tax Refund;
Sends notices prior to intercepting tax refunds
TOP notices and the likelihood of a tax refund intercept
Garnishments;
Wage garnishments and also wage garnishments for state
government employees
Offer earnings withholding orders and monthly installment
agreements for claimants
Repayment requirements;
109
8
5
Tax offset Prosecutions Liens/Levies Wage garnishments
Collection Actions that Motivate Individauls to Settle their UI Debt(# of states)
33
State law requires claimants to repay fraudulent debts including
penalties and interest in cash before being eligible to receive future
UI benefits
Claimants who have committed UI fraud are barred from future
benefits until all fraud debt is settled
Financial record matching
Flexible payment plans
Installment-payment plans
Tax; and
End of September deadline to have all employer debt satisfied to
maintain eligibility for a reduced UI tax rate
Civil penalties for employer’s failure to file required reports
Negotiation of settlements (employer debt)
State law that allows for the responsible party debt transfer making
the person liable for the entire UI tax debt in addition to the entity
being liable
Warrants and Levies.
A levy is filed against a person’s annual permanent fund dividend
Liens are the most motivating action for employer groups
Warrants and levies are very effective.
34
Prosecution Section
The following four questions provide information on hoe states prosecute
claimants and employers that are suspected of committing benefit and tax
fraud.
Factors such as resources, judicial structure, and case priorities influence the
number of cases states pursue for criminal prosecution and convention. Many
claimants and employers agree to restitution or a payment plan before the
court system gets involved.
Q26) Does your state prosecute for criminal charges on UI fraud overpayment
cases?
Forty-four states said they pursue criminal charges on fraud cases and the
majority have prosecuted less than 25 cases in the past 12 months.
YES44
NO5
Prosecute UI Benefit Fraud (# of states)
16
10
8
43
25 cases or less over 100 cases 26 to 50 cases 51 to 75 cases 76 to 100 cases
Average Number of UI Overpayment Cases Prosecuted Criminally per Calendar Year (# of states)
35
Q27) Does your state prosecute for criminal charges on employer tax cases?
Thirteen states said they pursue criminal charges on delinquent employer tax
cases.
Based on state responses, states prosecute fewer criminal charges for employer
tax cases than for UI Benefit fraud.
The complexity of UI tax fraud cases, staff knowledge, staff resources, and
current state laws are stated barriers for the small number of states pursuing
criminal charges.
YES13
NO32
Prosecute UI Tax Cases (# of states)
9
3
1
Five cases or less Over 40 cases Six to 39 cases
Average number of UI Tax debt cases prosecuted criminally per calendar year
(# of states)
36
Q28) What purposes does your state use, or message, fraud criminal prosecution
cases or statistics?
Although the question itself asked about the purposes states use or advertise
fraud criminal prosecution or statistics, the response options also incorporated
responses on where states display this information.
Ten states selected five or more of the categories listed indicating a broad array
of means to communicate to the claimant population the consequences for
committing UI fraud. As the chart shows, media coverage or newsprint,
agency’s website, posters, and written communication to claimants were the
top four messaging groups.
“Other” comments included:
Agency’s Facebook page;
Successful UI fraud prosecution cases are sent to prosecutors who have
never handled UI fraud cases to show that criminal prosecution of UI fraud
is routinely accomplished;
The agency periodically issues or contributes information for news releases
(usually in conjunction with law enforcement agencies or the AG's Office).
Educational materials sent to employers; and
30
23
16 1613
12 12
64
Messaging UI Fraud Criminal Prosecutions (# of states)
37
Fraud consequences and warnings are posted to online claims and IVR
systems.
Q29) Does your state use law enforcement officers to support the criminal
prosecution of UI fraud cases?
Thirty-two states responded that they utilize law enforcement in helping support
the criminal prosecution of fraud cases. This support includes serving search
warrants, arrest warrants, or performing or assisting in investigations.
In the 2015 Assessment Report, four states indicated they also have sworn law
enforcement officers as part of their UI integrity structure and embedded in their
state’s UI investigative-type unit.
YES32
NO17
Use of Law Enforcement (# of states)
38
Data Analytics and Predictive Modeling Section
The use of Data Analytics and Predictive Modeling is increasing in the UI arena
as states continue to experiment and find success with this relatively new
approach to payment integrity. States are also using data analytics and
predictive modeling to prioritize workload from cross matches. With this
question, the Center is seeking a broader knowledge of the state and vendor
developed applications currently being used and the processes and
procedures employed in utilizing the results of these tools.
Data Analytics examines raw data for the purpose of drawing conclusions
about that information while Predictive Modeling looks at past data to
determine the likelihood of certain future outcomes.
For this assessment, processing a cross match, or a structured query language
(SQL) routine, is not considered operating a data analytics or predictive
modeling program.
Q30) Does your state use predictive modeling for fraud prevention and
detection?
States that answered yes to this question were also asked:
a) Who developed the model?
b) At what frequency does it run?
c) How does your process operate?
d) Is it proprietary or open source?
e) Do you investigate a UI claim for possible fraud without a corresponding
cross match hit?
f) What are the top three useful data elements in your model?
YES12
NO37
Using Predictive Modeling(# of states)
39
When asked who developed their application, two states developed an in-
house solution and ten states contracted with a vendor. Vendors currently
being used by these states include:
Catch Intelligence;
Deloitte;
On-Point Technology;
Pondera; and
SAS.
When asked if their predicative modeling process runs in real-time or routine
batch processes, three states noted their process runs in real-time.
When asked how their process operates, one state specifically uses their model
on the front end, such as the initial claims process, while five states solely use
their model on the back end, or after the claim has been adjudicated and/or
benefits have been issued. Six states execute their models on both the front end
and back end.
When asked if their application was proprietary or open source, ten states said
their predictive modeling software was proprietary and one state said their
software was open source.
When asked if states investigate a UI claim because of a high probability
recommendation from their predictive modeling process, nine states said they
are flagging those claims for further investigation.
11
7
6
At the back end, such ascontinued claims
On the front end, such as aninitial claim
Both
Predicative Modeling Process (# of states)
40
States were asked to select the data elements their state uses in their predictive
modeling process.
IP addresses, wages reported by employers, incarceration data, death records,
employment separation dates, and security questions/answers were listed under
“other.”
Q31) Does your state use data analytics for fraud prevention and detection?
Eighteen states said they use a data analytics tool for UI fraud prevention and
detection. If a state said yes to this question, they were also asked:
a) Who developed the model?
b) At what frequency does it run?
c) How does your process operate?
d) Is it proprietary or open source?
e) Do you use a risk or ranking score?
f) Do you investigate a UI claim for possible fraud without a corresponding
cross match hit?
g) What are the top three useful data elements in your model?
When asked who developed their UI Agency’s data analytics model, six states
said they built it in-house while twelve contracted with a vendor.
7
5
4
3 3 3 3 3
1
Other Address Employer Email Phone Separationreason
Taxes Paymenttype
Banking
Data Elements used in Predictive Modeling Program (# of states)
41
Vendors mentioned included:
Catch Intelligence;
Deloitte;
On-Point Technology;
Pondera;
RSI; and
SAS.
When asked if their data analytics process runs in real-time or batch (frequency),
four states noted their process runs in real-time and fourteen states run their data
analytics process in a batch method.
When asked how their process operates, and as the chart demonstrates above,
fifteen states use their models on the back end, such as the continued claims
process, while thirteen states use their models on the front end, such as the initial
claims process. Ten states said they use their models on both initial and
continued claims.
When asked if their data analytics software was proprietary or open source,
fifteen states use a proprietary tool one state uses an open source solution.
When asked if states use a risk or ranking score for case prioritization from their
data analytics, eleven states responded yes and six states do not.
When asked if states investigate a UI claim because of a high probability
recommendation from their data analytics process, nine states said they are
flagging those claims for further investigation.
15
13
10
At the back end such ascontinued claims
On the front end such as aninitial claim
Both
Data Analytics Process(# of states)
42
The twelve states responding yes to this question were asked to select the top
risk variables (data elements) used in their data analytics process to identify
possible UI fraud. Address on record and employer information were the top
two variables selected.
Other write-in comments included
Wages;
IP address;
IP provider;
Separation dates;
Username configuration;
Same security questions/answers;
Incarceration data;
State employees;
Death lists;
Banking Information; and
Email address.
Q32) Does your state have any Standard Operating Procedures or other
documentation of work processes used in conjunction with your data analytics
and predictive modeling applications that could be shared with the Center?
Three states indicated they could share their standard operating procedures or
other process documentation for their data analytics and/or predictive
modeling applications. The Center will follow up with these three states for this
information.
8 8
7
5 5
4 4 4
3
Address Employer Other Phone Paymenttype
Email Separationreason
Taxes Banking
Variables Used in Data Analytics Process(# of states)
43
Cross Match Section
With the increasing availability of data that can be used for cross matching and
analysis in the UI Integrity process, the Center wanted to get a better
understanding of specific state activities in this area. The eleven questions
covered the following areas:
State and National Directory of New Hires;
Prison information;
Death records;
Fictitious employers;
Frequency of the matches;
How cross match hits are prioritized for investigation;
Changes to existing cross matches; and
Implementing new cross matches.
Responses revealed that states are expanding their use of cross matches to
prevent and detect possible fraudulent or suspicious actions. Various states are
contracting with vendors to access national databases and/or additional public
information data to strengthen their existing cross match activities. States are
exploring and experimenting with processes to prevent improper payments
before they are issued, and are implementing cross matches during the initial
claim process to help stop UI fraud.
Q33) Does your UI agency cross match with your state’s State Directory of New
Hires (SDNH)?
Forty-four states said they cross match with their state’s SDNH database. If a
state said yes to this question, they were also asked:
a) The frequency,
b) Statutory authority to assess penalties,
c) Actively enforcing the penalty assessment, and
d) Identifying employers who are non-compliant.
44
When asked about the frequency of the cross match run, and as the above
chart shows, two states connect in real-time, twenty-two states perform a daily
batch, and seventeen states run a weekly batch. Four other states mentioned
they do a batch run at different times, such as twice a week or every two
weeks.
When asked if their state has statutory authority to assess SDNH penalties on
employers that fail to report in a timely manner, twenty states said yes.
When asked about the penalty assessment they assess on employers per
violation, sixteen states said they do asses penalties. Ten states assess the $25
maximum allowed under federal law and four states assess less than the
maximum amount in a range of $15 to $24 per new hire violation. Several states
have larger penalties for incidents of conspiracy as allowed under federal law.
Note: Federal law indicates states have the option of imposing civil
monetary penalties for noncompliance. Federal law mandates
that if a state chooses to impose a penalty on employers for failure
to report, the fine may not exceed $25 per newly hired employee.
If there is a conspiracy between the employer and employee not
to report, that penalty may not exceed $500 per newly hired
employee. States may also impose non-monetary civil penalties
under state law for noncompliance.
When asked if states actively enforce the statutory SDNH penalty assessment,
four states actually enforce the requirement. Twelve states have a process for
identifying employers who are non-compliant with the SDNH reporting but do
not actively assess penalties.
Real-time2
Daily batch
22
Weekly batch17
Other4
Frequency of Cross Matches (# states)
45
States were asked what process they use to identify employers who are non-
compliant with the SDNH reporting requirements. Three states have automated
their cross match using quarterly wage data and the NDNH database. Five
states have automated their cross match using quarterly wage data, the SDNH
database, and "multi-state filer" database provided by Office of Child Support
Enforcement. One state finds non-compliant employers as a result of regular
scheduled employer UI Tax audits.
Four states use their process for identifying non-compliant employers solely for
marketing and outreach efforts to those employers to make them aware of the
reporting requirements.
Q34) Which UI claims does your state run against the National Directory of New
Hires (NDNH)?
State and federal law requires employers to report newly hired and re-hired
employees to the NDNH. The U.S. Department of Health & Human Services’
Office of Child Support Enforcement (OCSE) operates the NDNH, a database
established pursuant to the Personal Responsibility and Work Opportunity
Reconciliation Act of 1996. The primary purpose of the SDNH and NDNH is to
assist state child support agencies in locating parents and enforcing child
support orders. Congress also has authorized specific state and federal
agencies, including UI agencies, to receive information from the NDNH for
authorized purposes. The chart below shows the responses for this question.
Other claim types written in included: transitional claims, episodic claims, and
outstanding UI overpayments.
47
33 33
3
Continued claims Initial claims Additional and Reopenedclaims
Other
Claim Types Cross Matched Against NDNH (# states)
46
Q35) What is the frequency of your cross match with the NDNH?
Eight states run the NDNH cross match daily, thirty-nine states perform this
weekly, and two states run the NDNH cross match quarterly.
Q36) Does your state UI agency cross match against incarceration data?
Thirty-eight states said they run cross matches against incarceration data.
States that answered yes to the question were asked for the following
information:
a) What type of institution - local, county, state, or federal?
b) The frequency and method of the cross match. i.e. batch, real time, or
manual?
c) The source of the incarceration data - State/local government, Appriss,
SSA/Prisoner Update Processing System (PUPS), or other?
d) The number of average quarterly hits? and
e) Type of UI claims cross matched - Initial and/or continued?
The following table shows the type of institution, the frequency of those queries,
data sources states are using to verify if individuals are incarcerated while
claiming UI benefits, and the claim type used for cross matching. Unfortunately,
the average quarterly hits category did not receive sufficient response to
include in the table. The number in the claims column indicate those states that
cross match both initial and continued claims.
YES38
NO11
Cross Match Prison Data(# states)
47
The Center plans on following up with states claiming to cross match against
federal prison information. Our understanding is vendors that promote access to
prison information are not able to share federal prison information with states.
Q37) Does your state have an agreement in place with the U.S. Social Security
Administration to access their Prisoner Update Processing System (PUPS)
information?
Six states have an agreement in place with the Social Security Administration to
access the PUPS information.
Comment: The New York State Department of Labor has developed a
helpful overview of the steps required to secure an agreement with SSA to
access PUPS information. The Center will provide this information to states
as requested. You also can find it on the UI Community of Practice.
Q38) Does your state cross match Continued Claims against death records or the
U.S. Social Security Administration's Death Master File (DMF)?
Less than half of the states responding to the assessment use state, federal, or
other sources to determine if weekly claims may have been filed in the name of
a deceased individual.
Twenty-three states cross match their continued claims against SSA’s death
master file or state death records. Fifteen states access their state department
for vital records for this information, while six states receive this data from a
vendor.
State/Local Gov SSA + PUPS Vendor Other Real Time Batch Manual Initial Continued Both
Local Jail 5 0 13 0 3 11 4 13 15 12
County Jail 12 0 13 3 6 19 3 2 5 19
State Prison 22 0 11 2 6 27 2 5 6 21
Federal Prison 0 2 4 0 2 4 0 1 1 2
Data Sources Frequency Claim Type
Incarceration Cross Matching (# of States)
48
Q39) Does your state run a cross match on death records or the Death Master
File against claimants with existing overpayments?
The majority of states responding to this question do not use death records to
help inform overpayment debt recovery actions.
For the states that perform this cross match, the assessment asked about the
processes used when they receive a positive match. Nine states write-off the
debt. Other state responses include the following:
Before debt is written off the claims must be investigated to identify who is
claiming against the deceased individual’s SSN;
Collections will try to recover debt from the IRS, state refund, or family
trust. After recovery efforts, the debt is written off;
Determine if there is an estate and file a proof of claim for overpayments
that meet the threshold;
If the person dies within the current calendar year, the file is left active for
potential tax refund offset. After the end of the calendar year, the file is
marked deceased and collections efforts stop;
If they have an estate and probate is filed, a claim is filed;
15
6
3
Other State Agency Vendor Other
Death Records Cross Match Source (# of states)
YES17
NO31
Existing UI Debt against Death Records (# of states)
49
Notate file as deceased and then the UI claim is stopped for active
collection;
Submit to estate for collection; and
Deceased claimants with overpayments are submitted for write-off
consideration through the state write-off approval process.
Q40) Does your state conduct fictitious employer detection cross matches?
Twenty-six states said they do conduct a fictitious employer cross match. The
top four cross matches states said they use to identify potential fictitious
employers include the following:
UI Benefits filed against a relatively new employer’s UI account (18 states),
Filing quarterly wages late (17 states),
Employer’s mailing address (17 states), and
Employer’s phone number (13 states).
18 1817 17
1514
1312 12
8 8
6 6 6
Fictitious Employer Cross Match Attributes(# of states)
50
Six states also provided additional comments on data sources they use for
fictitious employer queries or cross matches as follows:
State Department of Revenue or Tax Commission;
Manual review of employer information on quarterly wages;
No SSN for owners or officers, no FEIN for employer, or no predecessor for
employer;
Part of the analysis compares the employer IP address, mailing address
and phone number against the employee's claim information. Also
compare the employer's state tax ID to how new it is in the system and if it
has a preceding account;
Registration in person; and
Similar wages reported for all employees of the business.
The descending numeric order of the other information states said they use are
listed here:
Filing prior quarterly wages as a new employer – 18 states;
First UI benefits being filed against relatively new employer’s UI account –
18 states;
Filing quarterly wages late – 17 states;
Mailing address – 17 states;
Multiple wage reports submitted on same date – 15 states;
High percentage of employer’s employees have filed claims against the
employer – 14 states;
Phone number – 13 states;
Employer has not paid all taxes due – 12 states;
Same wages being reported per worker multiple quarters – 12 states;
High percentage of employer’s claims are for Maximum Weekly Benefit
amount – 8 states;
IP address – 8 states;
Federal employer identification number – 6 states; and
State employer identification number – 6 states.
Q41) Does your state's quarterly wage cross match run more than once a
quarter?
Thirteen states run the quarterly wage cross match more than once a quarter. If
a state said yes to this question, they were also asked how often they match
claims against employer wages. The responses are indicated in the chart below.
51
An additional question asked if any of the variables in the cross match model
had been updated recently and what the variables were. Three states
provided comments:
Depending on the number of hits generated, the number of weeks
claimed, and the amount of wages reported, each run criteria is
reviewed and adjusted each quarter;
Wage threshold was raised from $500 to $1,000 to reduce the number of
false positives; and
Tweaked the scoring matrix based on industry code, modifications to child
support scoring, number of cross matches mailed per quarter, and
multiple employers in a quarter.
States were asked to briefly describe their process for prioritizing the wage cross
match hits. The comments we received are listed below:
All the cross match hits are sent to an investigator for review;
Automated assignment process. Top priority is given to "in pay status"
claims. Once the claim is assigned, investigators also prioritize based on
dollar amount and number of weeks claimed;
Hits on active claims receive a higher priority;
If the maximum payment exceeds the threshold of $75, it is investigated;
Manual review – the number of weeks claimed with unreported wages
and if employer raises an eligibility or separation issue;
Most of the work on cross match hits is automated through the creation of
a reporting requirement issue. Our system sends requests for information
to a claimant and employer about the hit and requests a response, if no
Daily4
Weekly4
Monthly5
Matching claims with Employer wages (# of states)
52
response is received the issue is adjudicated as a failure to meet reporting
requirements;
System uses a proprietary algorithm;
Vendor tool assigns the priority scores. The highest scores are audited first
along with the amount of overpayment;
Vendor tool provides probability logic which we use based upon the
number of cases we are in a position to pursue;
We don’t prioritize the cross match hits. All wage audit notices are mailed
and attempts are made to obtain information from all parties involved.
Once the responses are received, those wage audit notices are
investigated;
Work items are prioritized using data analytic risk assessment scores; and
When the employer returns earnings information, investigation cases are
created, assigned, and worked.
Q42) As it relates to cross matches being run, does your state have a process
(automated or not) for prioritizing hits to investigators as workload assignments?
The trend observed in this question is that most states prioritize investigations
based on the amount of the potential overpayment, whether that be weeks
claimed or wages reported; eight states use this method. Four states prioritize
based on the type of cross-match, and three states give the highest priority to
new hire cross-matches. One state prioritizes incarceration and death file cross-
matches, one state prioritizes first pay claims and one state investigates all cross
match hits without priority.
Four states rely on technology to prioritize and or make immediate assignments,
three states score hits on cross-matches for priority, while one state does a
quarterly cross match which then assigns the cases. Four states manually review
YES26
NO22
Prioritizing Cross Match Hits(# of states)
53
cross-match hits for priority. Two states indicated that cross matched claims in
current filing status are seen as the highest priority.
Q43) Has your state implemented a new cross match or revised an existing cross
match in the last 12 months?
Twenty-five states said they had implemented a new cross match or revised an
existing cross match over the last year. Fifteen of those states implemented a
new cross match and ten states updated an existing cross match.
Cross matches to identify incarcerated claimants and cross matches against
death records were the most commonly added or expanded cross matching
efforts.
Other newly added cross matches reported were as follows:
Wage records;
NDNH/SDNH;
State driver licenses or identification cards;
Claimant registration in a border state;
State licensing boards;
Payroll data from Equifax’s The Work Number;
Federal wage data contained in the NDNH;
Incarceration and deceased individual information;
System to check wages on a daily basis; and
Real time cross match with state identification card & driver’s license
records during claim intake.
New15
Existing10
Type of Cross MarchImplemented or Improved
in the Last 12 Months (# of states)
54
When states were asked what cross matches were modified, comments
included:
Automating the incarcerations cross-match with a vendor application to
automatically create the cases and issue a contact notification when the
claimant tries to file;
Changed from a monthly to a weekly cross-match with incarcerated file
from state corrections department;
NDNH cross match was enhanced;
Owner or Officer filing claim;
Social Security Administration - added cross-match against name and
Date of Birth;
State and county prison cross match was automated to pend claims and
automatically generate fact-finding forms to the claimant's home address
of record, as well as to the prison where the claimant is reportedly
located; and
Wage cross match performed on older quarters
55
ID Verification Section
The following two questions explore what steps states have taken to detect
potential identity theft. Responses to our inquiry showed states are making
strides in this effort.
Q44) Does your state have a verification process for Identity Theft?
In the 2015 Integrity Assessment Report, eleven states responded that they had
identity verification software as part of the initial claim process and thirteen
states were in the process of implementing software or exploring the options
available to them.
In the 2016 assessment, twenty-one states said they have an identification
verification process an increase of ten states since last year’s report.
When asked how the ID verification process was developed, fifteen states
developed their solution in-house and six states contracted with a vendor.
States using a vendor solution named LexisNexis most frequently as the vendor.
The assessment then asked what data sources were being used to verify an
individual's identity. Eight states use data from LexisNexis. Other data sources
included the following:
Real time verifications with Social Security Administration (SSA);
13
8
1
Other LexisNexis Equifax
Data Sources to Check an Individula's Identity (# of states)
56
State agency for driver's license and state identification for verification of
ID number and facial recognition;
State’s Secretary of State office;
Claims with same or similar usernames and passwords;
IRS, and employer wage records;
Accurint public records; and
Appriss data.
When asked about a state’s process when a claimant responds incorrectly to
the identity verification crosscheck question:
Five states said the individual has to contact the state UI agency;
Two states indicated the individual has to report to a local office or
American Job Center;
Four states noted the individual has to fax or mail a copy of their driver
license and other proof of identity documents to state UI agency; and
One state requires the submission of government issued identification for
all initial claims and identity verification is renewed at each contact
during the course of a claim.
Q45) Does your state cross match against driver license or state identification
card information?
Sixteen states responded that they cross match a claimant’s information against
their state’s driver license or state identification card information database for
purposes of ID verification.
The data elements that states match against are listed in the chart below.
16
109
4
1
Driver license oridentification
number
Physical attributes(such as gender,
date of birth, etc.)
SSN Address Driving Class
Data Elements Matched(# of states)
57
When asked about the processing frequency, eight states run the cross match in
real-time and five states cross match driver licenses or state identification data
through a daily batch. One state uses a manual process for this cross match.
Six states said they had on-line access to detailed state driver’s license
information.
The assessment also probed states’ process when the social security number or
other personal information doesn’t match with the state driver’s license data.
The responses are below.
The “other” responses included:
Submission of government issued identification for all initial claims;
Identity verification is renewed at each contact during the course of a
claim;
The claimant will have to go through our identity alert process and is
required to provide documents as proof of their identity; and
Motor vehicle cross match results are combined with the UIQ cross match
results.
The assessment also asked about the average volume of quarterly hits through
this process. Unfortunately, responses were not provided.
12
54
Require claimant to mail (or fax)verifying documentation
Require claimant to appear in-person
Other
Process for when there is a Discrepancy (# of states)
58
Integrity Data Hub Section
The Center took advantage of this assessment to include four questions for the
UI Integrity Data Hub (IDH)task effort. The four question topics were:
a) What are the national database cross matches that provide the most
value?
b) Do states currently collect bad (suspicious) actor information?
c) Are states willing to submit claimant and employer data to the IDH? and
d) Do states prefer that the IDH pushes information to states or that states pull
information from the IDH?
The Center appreciates states’ comments on a national data hub and is taking
this input under advisement. The Center is working with nine states to pilot a
suspicious actor repository targeting fraudulent common claim information.
Q46) What specific national database cross matches, if made available by the
IDH, would provide the most value to your state?
As the chart shows, suspicious individual data, prisoner updating processing
system, and death records files were said to be most valuable.
38 37
27
2321
23
42
11
SSA'sPrisonerUpdate
ProcessingSystem
Death recordfiles
Foreign IPAddresses
Treasury'sDo Not Pay
Portal
NDNHquarterlywage data
NDNH UIclaim
information
SuspiciousIndividual
data/records
Other -please list
Databases to Cross Match if Made Available by the IDH (# states)
59
“Other” comments on additional data bases indicated the following:
IRS 1099 records;
Bad physical address or bad SSN list;
Debit cards mailed to vacant addresses identified by the US Postal Service
as potential fraud;
DMV along with picture ID;
Existing fraud disqualification overpayments;
Fraud directory for all states, which include stolen ID information as well as
fictitious employer information;
Out-of-State DMV;
Systematic Alien Verification for Entitlements (SAVE); and
SSA and database of federal employees.
Q47) Does your state currently collect bad (suspicious) actor information?
Thirty-two states said they collect suspicious actor data such as SSNs, IP
addresses, and employer names associated with fraudulent UI claims, schemes,
or overpayments.
Q48) Would your state be willing to submit claimant and employer UI data to the
IDH?
Forty-one states said yes they would be willing to supply claimant and employer
UI data for purposes of cross matching and building a suspicious actor repository
if all the appropriate data sharing agreements and security protocols are in
place.
YES32
NO17
States that collect Suspicious Actor Informaton (# of states)
60
Q49) Do states prefer that the Data Hub pushes information to states or that
states pull information from the Data Hub.
Push - Twenty-two states said they were okay with submitting claimant
information to the Data Hub, having the Hub compare information, and return a
list of potential hits to the states for further investigation or review.
Pull - Twenty-six states said they would prefer the option of the Data Hub
providing access to various data sources and states would perform the
associated cross matching and analysis as needed.
Q50) Has your state changed, or initiated, a new or innovative process in the last
twelve months that relates to UI Integrity in any of the following areas that was
not answered in any of the prior questions?
As the last topic of the assessment, the Center wanted to gather information to
determine if states had changed a current process or initiated a new process in
their UI integrity efforts.
Twenty-seven states said they made changes, as it relates to UI integrity, in one
or more of the four listed areas of BPC, Benefits, Tax, or Appeals over the last
twelve months. One state said they had implemented changes in all four areas.
Seven states noted changes in three of the four areas – six for BPC, Benefits &
Tax and one in BPC, Benefits & Appeals.
2019
10
2
BPC operations Benefits operations Tax operations Appeals operations
Changed or New Process (# of states)
61
Some of the responding states provided additional information in the comment
section indicating the state made procedural or process changes as well as
legislative changes.
Some of the specific changes or new processes mentioned in the comment’s
section were:
Instituted two initiatives within the Appeals section - hearing reminder calls
and the establishment of a Redetermination Desk;
1099 cross match with IRS;
Updated collection reports for quicker balancing and accounting
reconcilement;
Replace the existing benefit overpayment collection application with an
integrated and automated system;
Updated procedures for fictitious employers;
Updated case management systems;
Implemented a data analytics rules engine;
Implemented a fraud marketing campaign last year on commercial radio
and public television announcements;
Updated the tax system;
Through the administrative garnishment process, a process has been
instituted to find and prosecute individuals who are working under stolen
identities;
New hire information is sent to claimants when the new hire hit is received;
A full time attorney has been hired to prevent large dollar UI claim fraud
and overpayments from being discharged when included in a Bankruptcy
filing;
The state is working with USDOL’s Office of Inspector General using IP
addresses to detect fictitious employers and claimants;
Verification of claims filed self-service online;
A state-funded analytic tool has been implemented that cross matches
local, state jails and vital records;
All job seekers are now required to have an active online registration and
posted resume;
A Work Search Unit is being formed to randomly reach out to claimants for
detailed work search information;
A quality assurance team has been created;
Implementation of detection and recovery of overpayments system;
Call center staff are being educated on the detection of identity theft -
what to look for, how to report it;
Incarcerations cross-match have been automated;
62
Document upload for employers, an integrity video to be played to
claimants on each new claim, and an identity theft handling policy;
The process has been changed to run the quarterly cross match sooner
and send the wage verification to the employer the week after a
claimant stops reporting wages; and
Reminder calls to claimants reminding them to register, educating them
on work search requirements and informing them on how to report
earnings.
63
Conclusion
The Integrity Center appreciates the time and effort states contributed to this
assessment. We pledge to make use of the resulting data to further assist states
in improving their program integrity efforts. Additionally, the Center will use the
information obtained to further our technical assistance efforts to states and
connect them with successful practices employed throughout the country.
The Center’s State Engagement staff look forward to a continued partnership
with states in the pursuit of accumulating UI integrity tools and processes to
improve or strengthen UI operations. These processes will take time, effort, and
collaboration at the state and national levels. The culmination of sharing
information, partnerships, and processes will help states ensure that those who
are rightfully due UI benefits are paid in a timely and accurate manner, while
safeguarding states’ UI trust funds.
Future Efforts
This report demonstrates a need for future outreach to states for additional
information and to clarify existing procedures and tools. The Center will
continue our information gathering and will reach out the states directly for
additional information. The responses to these questions provide optimism and
clarity that states are making significant efforts to implement new tools and
processes to help improve their integrity operations.
As these assessments are not intended to be a static analysis compiled once,
and filed away. Instead, the Center will continually update this information to
capture emerging tools and practices that can be disseminated for the benefit
of the UI community. The Center plans to continually explore the unanswered
questions with regard to the effectiveness of integrity practices and the
variations of how different states utilize integrity tools.
The Center also plans additional questionnaires and state visits to dig deeper
into current and emerging integrity solutions, refresh existing information, and
conduct research and analysis to measure their effectiveness. The information
will be used to identify successful tools and practices to inform the construction
of an Integrity Blueprint. The data in the State Portfolios will ultimately provide a
single source of information to assist states as they inquire, replicate, or
undertake new integrity initiatives. It will also assist the Center in the creation of
automated blueprints in specific areas such as: BPC, Tax, Benefits, Appeals, and
overall UI Integrity.
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ATTACHMENT A
The UI Integrity In-depth State Assessment questionnaire sections
Operations Section
1. Does your state have a shareable copy of your UI agency’s organizational
chart? We are primarily interested in where your Benefit Payment Control
(BPC) unit resides in your agency's organization.
2. Does your state verify out-of-state work registration?
3. Does your state have an automated case management system for the UI
Benefit Payment Control (BPC) unit? For the purpose of this question,
automated case management means case creation, case assignment,
closing the case, case tracking, and case document management.
4. Adjudication - Does your BPC Unit issue determinations?
5. Does your state use the SIDES Earnings Verification system?
6. Has your state modified your integrity messaging in the last twelve
months?
Internet Protocol (IP) Address Section
7. As part of your state’s UI process, does your state capture a claimant’s or
employer’s IP address?
8. Does your state screen for Internet Protocol (IP) addresses?
9. Some states have a repository for a "hot" IP address list for known bad or
prior fraudulent IP address. Does your state compile a "hot" IP address list?
10. Does your state have a process for verifying IP addresses that are
"masked" or filed from a proxy server?
Training Section
11. Many states offer training on adjudication methods, computer system
updates, and new processes or procedures. Does your state UI agency
offer training programs specific to addressing BPC or UI integrity issues
designed to prevent, detect, and recover improper payments (both fraud
and non-fraud)?
65
Recoupment Section
12. Federal law requires state UI agencies to participate in the Treasury Offset
Program (TOP) to recover certain UI benefit overpayments. Income tax
refund intercepts for delinquent UI employer tax debts is a new option for
states. Does your state currently participate in TOP to collect delinquent
UI employer tax debts?
13. Does your state use any outside data sources or tools for locating (skip
tracing) debtors' most current address?
14. Does your state have an automated collections case management
system (separate and apart from your automated billing system)? For
example, does the system help staff prioritize collection assignments,
provide alerts when the status of a collection case changes (missed
payments, new address, bankruptcy filed, etc.)?
15. Does your state have any automated processes for contacting debtors to
recover benefit overpayments or tax debts?
16. Does your state allow electronic payment options on overpayments or tax
debts?
17. Does your state have a State Income Tax offset program?
18. Does your state actively recover UI benefit overpayments through wage
garnishments issued to the claimant's current employer(s)?
19. Does your state actively process liens or levy bank accounts on
overpayments or tax debts?
20. Does your state leverage the issuance and/or renewal of any business or
professional licenses to recover UI overpayment and/or delinquent
employer tax debts?
21. What other sources are actively used to recover UI overpayments and/or
delinquent employer tax debts?
22. Generally, fraud overpayments are not dischargeable under federal
bankruptcy law. Does your state actively file adversary proceedings
objecting to the discharge of fraudulent UI overpayments in bankruptcy?
23. Does your state require certain employers to post a cash bond amount to
ensure future tax debts are paid?
24. Does your state refer or contract out UI debt recovery?
25. What other collection actions does your state find motivating for
employers or claimants to settle their UI debts?
66
Prosecution Section
26. Does your state prosecute for criminal charges on UI fraud overpayment
cases?
27. Does your state prosecute for criminal charges on employer tax cases?
28. What purposes does your state use, or advertise, fraud criminal
prosecution cases or statistics for?
29. Does your state use law enforcement officers to support the criminal
prosecution of UI fraud cases? (such as, serving search and arrest
warrants, investigations, etc.)
Predictive Modeling and Data Analytics Section
30. Does your state use predictive modeling for fraud prevention and
detection?
31. Does your state use data analytics for fraud prevention and detection?
32. Does your state have any Standard Operating Procedures or other
documentation of work processes used in conjunction with your data
analytics and predictive modeling applications that could be shared with
the Integrity Center?
Cross Matches Section
33. Does your UI agency cross match with your state's State Directory of New
Hires (SDNH)?
34. USDOL ETA mandates that States cross match their unemployment
insurance claims against the National Directory of New Hires
(NDNH). Which UI claims does your state run against the NDNH?
35. What is the frequency of your cross match with the NDNH?
36. Does your state UI agency cross match against incarceration data?
37. Does your state have an agreement in place with the U.S. Social Security
Administration to access their Prisoner Update Processing System (PUPS)
information?
38. Does your state cross match Continued Claims against death records or
the U.S. Social Security Administration's Death Master File (DMF)?
39. Does your state run a cross match on the death records or the Death
Master File against claimants with existing overpayments?
40. Does your state conduct fictitious employer detection cross matches?
67
41. Does your state's quarterly wage cross match run more than once a
quarter?
42. As it relates to cross matches being run, does your state have a process
(automated or not) for prioritizing hits to investigators as workload
assignments?
43. Has your state implemented a new cross match or revised an existing
cross match in the last 12 months?
Identification Verification Section
44. Does your state have a verification process for Identity Theft?
45. Does your state cross match against driver license or state identification
card information?
Integrity Data Hub Section - Note: these four questions are not part of the ISA
Question Analysis review
46. What specific national database cross matches, if made available by the
IDH, would provide the most value to your state?
47. Does your state currently collect bad (suspicious) actor information (ex.
SSNs, IP addresses, employer names that have been associated with
fraudulent claims, schemes, or overpayment)?
48. Would your state be willing to submit claimant and employer UI data
(providing all the appropriate data sharing agreements and security
protocols are in place) to the IDH for the purposes of cross matching and
building a bad actor repository?
49. Do states prefer that the Data Hub pushes information to states or that
states pull information from the Data Hub?
Last Page
50. Has your state changed, or initiated a new or innovative process, in the
last twelve months that relates to UI Integrity in any of the following areas
that was not answered in any of the prior questions?