ui integrity has arrived… now what? ets educational webcast thursday december 12 th 2013 join ets

UI Integrity Has Arrived…Now What?

ETS Educational WebcastThursday December 12th 2013

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www.domain.comPhone: +1(123) 456 78 90 | e-mail: [email protected] LOGO

meet your presenter

Ross E. [email protected]

COO, Employment Technology Solutions (“ETS”)President, Association of Unemployment Tax Organizations (“AUTO”)

Payroll / HRIS Advisory Board Member, HR.com

Join ETSwww.employmenttax.com

Phone: +1(800) 518-3874 | email: [email protected]

http://www.employmenttax.com/


ETS SOLUTIONSTechnology-based Solutions Driving Compliance, Convenience & Savings for Employers

Tax Consulting

• M&A Consulting & Credits

• Tax Advisory

• Hiring Credits & Incentives

• Statutory Account Review

• Protective Filings

Verification

• Electronic I-9 and E-Verify Integration

• Verification of Income and Employment (VOIE)

• OIG Exclusion Processing

Unemployment Claims

• UI Claims Administration

• Hearing Attendance

• Bonded Service

• Training Tools

• Benefit Charge Audits

HR Tools

• On-boarding Services

• Online Job Portal

• Applicant Tracking Systems

• Background Checks

• Assessment Tools

www.employmenttax.comPhone: +1(800) 518-3874 | email: [email protected] ETS

NEW!


Presentation Agenda


• UI Overview & National Trends• Legislative Path to UI Integrity• Key Definitions• Best Practices for UCM: “A-C-T”

GOALS: Compliance, Efficiency & Cost Savings!


National UI Conditions



Condition of UI: National Focus


Many States’ UI Reserves Still Insolvent

Red = borrowing as of 10/31/13. Yellow = less than 6 mos. of positive balances. Green = more than 6 mos. of benefits. Orange= ER-financed bond

State Trust Fund Solvency as of Oct. 31, 2013. Map taken from November 2013 SUCAP Report, based on US DOL UI data quarterly summary charts & SUCAP Reports.


Key Conditions of the UI System


• Unemployment rate: 7% (November 2013)• National average annual UI expense over $500 per EE • National average cost per UI claim: roughly $7,703 (DOL).• Assessments to UI rates • States using ER-financed bonds: CO, ID, IL, MI, NV, PA, TX

• FUTA Credit Reduction for 13 states See states.• UI named a “high-error” & “high priority” program for governmental corrective action.

http://www.employmenttax.com/ets-resources/futa-credit-reduction-states/


Immediate Impetus: Inefficiency & Systemic Abuse


•In 2011, the DOL estimated $14B, or 11% of all UI claim payouts, result from overpayments.

• States like AZ, CO, IN, LA, VA pegged with 19-43% improper payment rates.

•DOL estimates 19% of UI benefit overpayments stem from ERs' untimely response and/or inaccurate info.


Legislative Path toUI Integrity



2011 Federal “TAAEA” Law: UI Integrity / “Section 252” Overview


•Follow-on to 2009 Executive Order 13520 to reduce improper UI payments.

• Increased employer responsibility for claims process & reporting.

• Unemployment Claims Administration now focused on complete and compliant reporting.

•All states were required to enact UI Integrity legislation by 10/21/13.


UI Integrity: Sec. 252 of TAAEA


Federal Trade Adjustment Assistance Extension Act of 2011 :

States must not relieve employers (ERs) of benefit charges to their unemployment tax account when both conditions exist:1. UI benefits were improperly paid due (in part or in whole) to

ER’s failure to respond timely or adequately to the agency’s request for claim detail.

2. ER has established a pattern of failure to respond timely or adequately to agency requests for claims info.

*TAAEA mandates a minimum standard; states may go further.


What Is Prohibit Relief of Benefit Charges?


Initial Charges Successful Appeal End of Benefit Period

Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7…. ..Week 17 and on

No charge relief…………………………………………Charges stop on appeal (where available)

? ??

• Employers’ unemployment accounts will be charged for unemployment claims overpayments where applicable.

• Relief on appeal is not available in all states, depending on legislation (charging may continue).

• Increase in benefit charges may influence ER experience rating and elevate UI taxes.


Financial Impact Example


Case Study: • ER With 100 Separations/Yr; Classified with “Pattern of Failure.” • Benefit$ paid to claimant prior to successful Appeal by ER.

FACTORS FIGURES

Weekly benefit amount Assume $300

Time to appeal 8 weeks

# of claims lost on initial determination & won by ER on Appeal

10 (out of 100 total separations)

Charge to ER UI account $24,000 ($2,400 x 10 claims) now NON-RECOVERABLE due to “Pattern of Failure.”

Additional Exposure / Negative Impact •May raise AUDIT RISK for other UI areas, other state taxes, other jurisdictions•May elevate ER experience rating


What Is Failure to Respond Timely?


• Timely is often specifically defined in state’s UI Integrity legislation, or elsewhere by the state workforce agency. • It’s also frequently not defined.• Where not defined, it’s often interpreted as

ballpark 7-10 days from agency communication.• If you cannot document your response

within that time frame, it may be counted against you as failure to respond timely.


What Is Adequate Response?


• More subjective term. • In some cases, is specifically outlined in

state’s UI Integrity language or elsewhere.• In many cases, not defined.• ERs should pay attention to precedent and

agency practices where there is no existing guidance.

• All questions should have responses.• Responses should be accurate and

complete with supporting material where appropriate.


What Is Pattern of Failure?


• Some states have left this undefined in their UI Integrity legislation; many will develop definitions going forward.

• Roughly half the states have defined as:“the greater of 2 instances or 2% of claims in the past year.”

• Some states have more restrictive and difficult-to-meet standards.

Example: Some do not take into account larger number of claims for larger ERs.


Additional Penalties


• Some states have assigned additional penalties above and beyond that required by TAAEA.

• Additional penalties may include:o Loss of appeal rightso Fines per instance o Fines based on false statements o Fines as % of assessed overpaymentso Revocation of right to agent representation

• Problems may also lead to higher risk of exposure to other audit areas (worker classification, other agencies and jurisdictions).


Best Practices for

UI Compliance & Cost Savings




“ACT.”Provide information to UI agencies

that is:AccurateComplete

Timely

Best Practices


UI Integrity Oversight Plan



Controllable Risk FactorsContributing to UI Cost & Noncompliance


Challenge #1: Organizational Structure:

• Limited infrastructure committed to UI process• Minimal or non-existent “inter-departmental” technology for seamless, timely receipt &“effective” follow-through for every claim • Inconsistent expertise responsible for program success (turnover) = inconsistent program delivery


ETS’ Solution


• Empower your team with the tools they need to be effective, and save money in the long run. Deploy technology-based claims management for automated cross-location, cross-department communication and transparent, on-demand account access.


Controllable Risk Factors Contributing to UI Cost & Noncompliance


Challenge #2: Training for Results• Invested parties (C-level, HR, Payroll, ….) may not be educated about relationship btwn. separation, discipline, documentation, claims process, and cost / compliance impact to organization.

• Charge analysts may not be well-trained on all of the following:o Match benefit year wages vs. charges

o Scrutinize reports for charge irregularityo Audit charge statement to ensure accuracyo Create effective contact process with agencyo Follow-through on reversing inaccurate charges


ETS’ Solution


• Implement training modules for all on-boarding and exit staff (HR and managers).

• Clarify UCM risks and potential value in a language C-Suite understands. Use advanced reporting features to assign dollar values to: o where you are at / current win-lose ratio, experience ratingo where you want to be / industry benchmarkso worst case scenario / noncompliance penalties

• Secure support for additional resources as needed.


Controllable Risk Factors Contributing to UI Cost & Noncompliance


Challenge #3: Breaking Old Response Habits

• In the past, many employers cherry-picked claims to respond to, focusing on those that held perceived benefit to the employer (such as unwarranted claims).

• In the past, agency requests for claims detail could be largely put off and “perfected” after the initial claims determination if necessary.


ETS’ Solution


• Technology-based claims management supports timely response of all claims, right from the start.

• “Follow-through” procedures support ongoing agency compliance.

• Built-in “triggers” identify areas for improvement.• Access records, notes, and claims detail on-demand

from anywhere, anytime. • Transmit data electronically.


Reporting Features: How They Help


•Track results/determine program compliance & process improvement initiatives

•Manage/scrutinize high cost contributors

•Identify strong program performers

•Charge impact driver by separation mix and charge amounts

•Electronic benefit charge audit system (cross-check all charges)

•Ensure charge accuracy against agency tables/formulas

•Tools for aggregate review & analysis of “real time” reports

Result: Constantly Improving Your Compliance & Cost-Savings


UCM Plus Screenshot



UI Integrity Prep Checklist


Done? UI Prep Item

Organizational Understanding of Issues (i.e. Costs & Audit Exposure)

Internal Assessment of Readiness / Exposure

Develop a Plan / Organizational Strategy

Identify Responsible Parties (Individual or Teams)

Establish Training for Key Staff (and/or Strategy for TPA Partner)

Regular Reporting and Measure Success / Areas for Improvement (Access to Real-time Reporting Tools)

“Rinse & Repeat”


ETS Resources•UI Integrity State Legislation Tracker•UI Integrity Compliance Tips•How Nonprofit Employers Can Reduce UI Cost•Tips on Choosing a UCM VendorGo here to

download three pages of UI Tips

from ETS.

ETS’ UI

Tips

Download this one page checklist to assess the state of your UI Claims Administration

Is Your UCM Broken?

Go here to learn more, and here to contact ETS.

Learn more about ETS’ UCM Plus Solution


ETS Blog

Go here to get ETS’ best UCM blog posts and

resources in one place.

http://www.employmenttax.com/ets-resources/section-252-compliant-ui-integrity-legislation/

http://employmenttax.sites.hubspot.com/download-ets-ui-integrity-law-compliance-tips?&__hssc=&__hstc&hsCtaTracking=21a4b793-719d-4375-9ae2-adb2e6ca6801%7Ce75b114c-f9c6-4285-80f8-a2ef377089da

http://www.employmenttax.com/bonded-service-for-nonprofit-employers/

http://www.employmenttax.com/blog/bid/118468/8-Tips-to-Choose-the-Best-Unemployment-Claims-Vendor

http://www.employmenttax.com/read-our-ui-management-tips?__hssc=&__hstc&hsCtaTracking=d89de0ce-af6a-4e08-8600-4326a5de6c9b%7Ca2218e3c-b5a9-4ce5-a1fb-47052a3b691e

http://www.employmenttax.com/is-your-unemployment-claims-administration-broken?__hssc=&__hstc&hsCtaTracking=99dbb6f1-c1ef-4120-b4b9-6d8703203000%7Cd8635fda-c2a7-45cf-af37-e2356efe27b1

http://www.employmenttax.com/ucm-plus/

http://www.employmenttax.com/contact/

http://www.employmenttax.com/blog/bid/139479/Best-of-ETS-UCM-Blog-Posts-Resources-for-Payroll-Employers


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Q&A

Questions & Requests for Presentation Slides::

Ross Henderson-COO [email protected]

http://www.linkedin.com/company/846772

mailto:[email protected]

ui integrity has arrived… now what? ets educational webcast thursday december 12 th 2013 join ets

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