Overview January 11, 2011

FY 2010 National UI Benefit Payment Accuracy UI benefits paid: $ 63.5 Billion Benefits Overpaid: $ 7.1 Billion (11.3%) Top Causes of Overpayments: Working & receiving benefits 29.3% of overpayments $2.1 Billion Dollars Incorrect Initial Eligibility Determinations (Reason for job loss) 19.1% of overpayments $1.4 Billion Overpaid due to Separation issues

Initial Eligibility Determination Performance Separation Determination Quality FY 2010 Determinations scoring 95 points or more: 65.6%. (Criterion 75%) 31 States failed to meet the quality criterion Separation Determination Timeliness FY 2010 Separation Determinations issued within 21 Days: 55.5%*. 48 States did not meet the 21 Day timeliness for Separations *Nonmonetary Determination Timeliness ALP = 80%

UI SIDES History USDOL, States, Employers and Third Party Administrators very interested in improving timeliness and quality of reasons for job loss information required to determine initial eligibility. NASWA UI Committee Work Group States, Employers, and TPAs Worked together in developing format and concept of operation Tested the format and approach. “Low Tech Test” (GA, WI, CO, ADP, TALX, JC Penney, GM, & Kelly Services) UI SIDES Development Consortium: (GA, WI, CO, OH, UT, NJ, ADP, TALX, JC Penney)

Goals Secure electronic exchange Standard format for data w/ edits and validations Quality and timely information. Significant % of determinations possible made w/o further contact (i.e. telephone). Single point of contact for both states and employers Fewer resources needed to gather information. Reduce follow-up phone calls Fewer unnecessary appeal hearings and overpayments

What is SIDES? Computer to computer exchange: Single Point of Contact Web Services - SIDES Broker Web Site – SIDES Employer Web Site (SEW) Single Point of Contact Secure exchange Authentication Certificates Encrypted records and files Data Standards Standard Formats for data elements Edits, Validations, Business Rules Technical Standards Open design following industry standards Compliant with W3 standards

SIDES Applications Concept

General SIDES Infrastructure

SIDES – Web Service Applications

SIDES – Web Site Applications 2 1 3 4

SIDES Broker and Website Secure authentication and data encryption Edits, validations and business rules Error handling / confirmation of receipt Metrics reporting and logging Transaction time stamp (Eastern Standard Time) Data Center facility: 99.9% System Availability Secure and redundant services 24 hour system administration and support desk Disaster recovery and COOP services Metrics reporting and logging Administrative functions (web application) Roles based security to the Broker Parse and Validate Files Parsing the file will examine its contents to assure business rules and validations are met Certificates and Keys (security / encryption) Error Handling / Confirmation Return a file listing all non-conforming records to sender Return a Confirmation message of successful file transmission Staging Area Files are encrypted and held for pick up by entities at least once a day. Files are stored on Broker 7 days, then purged. Files can be forwarded to entities ICON Facility 99.9% Availability (ACS’ Data Center, Blythewood, SC – currently supports UI ICON)

Efficiency with UI SIDES Efficiencies: Standard Format Electronic storage & retrieval Reduced scanning/imaging expenses Reduced staffing to handle paper forms Faster transit times (outbound and inbound) Guaranteed receipt Better information – Fewer follow-up calls to employers

UI SIDES – Schedule SIDES Infrastructure State Systems Broker in production – February 2, 2010 Web site – Ready for Production State Systems Utah In Production, February 2, 2010 Colorado In Production, January 3, 2011 Ohio In Production, December 15, 2010 New Jersey Pending Georgia Feb 2011 Wisconsin March 2011

UI SIDES – Expansion Round 2 -10 new States are joining SIDES Arizona Michigan Connecticut New York Iowa North Carolina Kansas Rhode Island Maryland Texas Round 3 – 6 new States Kentucky Mississippi North Carolina Oregon South Carolina Tennessee

UI SIDES – Employer/TPA Schedule Employers/TPAs already involved: ADP – In Production February 2, 2010 TALX UCeXpress – March/April 2011 JCPenney – 2011 Additional TPAs Paychex Inc. Barnett Associates, Inc. J Dunn Inc. Corporate Cost Control Recruitment of additional Employers/TPAs

Future Exchange Formats Wage Verification (Completed and under going Testing) Monetary and Potential Charges (Development - February 2011) Eligibility Determination (Preliminary Format) Appeal Decisions (Preliminary Format) Monetary Determination (Preliminary Format) Other Exchange Formats (File an Appeal/Protest, Wage Records etc.)

Governance SIDES is operated by CESER, but the governance is done in partnership with States and Employers trough two committees, Executive and Operations

Executive Committee – Structure and Term Chair – NASWA Board Member Consists of five state representatives appointed by NASWA selected from among the participating UI SIDES states Term 3 year terms Duties Develop the SIDES annual budget and financial plan including the fee structure for states covering the operation of SIDES Develop policy, provide overall guidance for the project, resolve certain disputes, and make final determinations on whether to implement major system changes or enhancements The Executive Committee is chaired by NASWA, and consists of 5 (voting) states, and 3 (non-voting) made up from NASWA, USDOL and the SIDES Business Manager (who could be NASWA/CESER, or other)

Operations Committee – Structure and Term Consists of four employer/TPA representatives and five state representatives appointed by NASWA from the participating entities 3 year terms The Chair is selected from among the state representatives Duties: Function as the formal decision-making body on behalf of the participating SIDES entities (states, employers and TPAs) Provides guidance and input for all program and business issues, input on proposed new functionality and features, and guidance and input on technical issues The Operations Committee may, from time to time, establish ad hoc workgroups and/or committees, ask committees to work jointly to address common issues of concern and may, upon mutual agreement, establish other standing committees Any decision of the Operations Committee can be appealed to the Executive Committee The Operations committee is chaired by a state representative and has 12 members (4 employer/5 state (voting) plus 3 non-voting from USDOL, NASWA and the SIDES Business manager

Demonstration