UI SIDES 2010 UI National Integrity Conference April 20-21, 2010

CY 2009 National Benefit Payment Accuracy 2  UI benefits paid: $ Billion  Benefits Overpaid: $ 11.4 Billion or 9.6%  Separation issues account for 19.64% of overpayments  $1.167 Million Overpaid due to Separation Issues  2 nd largest cause of UI overpayments.

Non-monetary Determination Performance  Nonmonetary Determination Time Lapse CY 2009  Separation Determinations issued within 21 Days: 56.2%. (Criteria 80%)  41 States fail to meet the time lapse criteria  Separation Determination Quality CY 2009  Separation Determinations scoring 95 points or more: 66.3%. (Criteria 75%)  35 States fail to meet the quality criteria 3

Standardized UI Separation Information  States, Employers and Third Party Administrators very interested in improving this process.  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 Consortium: (GA, WI, CO, OH, UT, NJ, ADP, TALX, & JC Penney) 4

Project Goals  Standard electronic exchange that would be accepted and implemented.  Obtain quality and timely separation information.  Allow a significant percent of separation determinations to be made w/o further contact.  Secure method and a single point of exchange.  Reduce the resources needed to gather information.  Reduce follow-up phone calls  Avoid unnecessary hearings and overpayments  Computer to computer exchange methods:  Web Services - SIDES Broker  Web Site – SIDES Employer Web Site (SEW) 5

General Concept – SIDES Web Services 6

Send File - (Request / Response)  Standard Format - Data Elements  Required / Conditional / Optional  Coded values list (i.e.: Separation Reason Codes)  See UI SIDES Concept of Operations & Appendix itsc.org  File Structure  Responsibility of each entity to create and to conform to business logic when creating the record (edits and validations)  Each record may contain up to 10 attachments  Each file may contain multiple records for one single entity  Entity contacts Broker and transmits file  Authenticated and encrypted for secure transmission 7

SIDES Broker  Parsing and Validating Data Files  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 8

Web Services - (Request / Response)  Entity acquires the file  Picked up from Broker  Received from Broker  Parse file (edits & validation)  Send confirmation of receipt to Broker (logs)  Entities Responsibility  Store and Process data  Business rules can automatically manage data quality 9

Employer Objectives  Solvent UI System  Respond timely with complete and accurate info  Confirmation of Receipt  Reduce Phone Calls for information  Reduce Work in Process  Avoid unnecessary hearings  Protect personal information by secure transmission 10

Privacy Issues  Social Security Number  Critical identifier to safeguard  Concern of SSNs printed on forms  Concern of faxes being electronically intercepted  s are not safe to send SSNs  Full SSN is critical for employers to accurately identify claimants  Unemployment Insurance Program Letter  UI SIDES offers protection of an SSN  Electronic – no paper  Single point of contact  Encryption of records and files  Authentication Certificates 11

Employer Efficiency with UI SIDES  Employer / TPA Efficiencies:  Standard format for all states  Secure exchange of information  More accurate and complete response  Fast response to claims that don’t need research  Reduce Work in Process  Gain “Request & Response” Time  Eliminate concerns of a timely receipt  Minimize Unnecessary Employer Charges  Reduce Document Imaging  Reduced need for hearings  Reduced Postage Costs 12

State Efficiency with UI SIDES 13  State efficiencies:  Secure exchange of information  Reduced scanning/imaging expenses  Reduced staffing to handle paper forms  Reduced Postage times (outbound and inbound)  Reduced follow-up calls with employers  Guaranteed receipt  Shortened turn-around times  Faster and easier electronic storage & retrieval  Standardized form is easier to use & provides better information

14 Savings – SWAs (e.g.) Annual Savings and cost avoidanceColoradoWisconsinUtahGeorgiaOhioTotal annual Outbound postage and mail processing$22,195.22$120,941.54$13,216.26$96,866.63$123,519.10$376,739 Inbound mail processing and data entry$38,001.76$121,816.32$17,687.68$104,048.15$126,563.13$408,117 Separation processing and adjudication$27,752.83$52,177.70$12,120.71$36,590.10$51,048.22$179,690 Appeals hearing cost avoidance$54,544.65$27,995.66$9,589.35$50,398.92$80,878.56$223,407 Overpayment recovery cost avoidance$26,946.52$9,273.17$2,748.98$41,446.92$30,644.98$111,061 Total Annual cost avoidance and benefits$169,440.98$332,204.39$55,362.98$329,350.71$412,653.99$1,299,013 Reversal Overpayment avoidance$526,779.68$181,282.04$53,739.97$810,249.14$599,081.16$2,171,132

Savings – TPA/Employer (large e.g.) 15 TPA / Employer Savings and avoidance - pilot SWAsAnnual Outbound postage and mail processing$401, Inbound mail processing and data entry$267, Separation processing and adjudication$183, Appeals cost avoidance$254, Total Annual cost avoidance and benefits$1,106, Intangibles - Government relations* Overpayment avoidance$2,124, Overpayment recovery cost avoidance$108, *Wisconsin integrity law to hold employer liable for failure to respond completely? Avoidance of additional Federal or State regulation

UI SIDES BROKER – Web Services 16

UI SIDES – Web Services Schedule  SIDES Software – Broker  Software development completed Oct 10, 2008  Acceptance Testing completed – January 8, 2010  Fully Operation – February 2, 2010  State Systems  UtahIn Production, Feb. 2, 2010  New JerseyApril 2010  OhioApril 2010  Colorado May 2010  Wisconsin July 2010  Georgia Late

UI SIDES – Web Services Schedule  Employers already involved:  ADP – In Production – Feb. 2, 2010  Talx – UCeXpress - Late 2010  JCPenney –

UI SIDES – Expansion 19  Current 6 States represent 14% of National Workload  12 new States have joined adding another 20.5% Arizona Connecticut Iowa Kansas Maryland Michigan Mississippi New York North Carolina Rhode Island Texas Virginia

UI SIDES – Expansion Increase Participation  States  Upcoming SBR for new states  Recruitment of Additional TPAs  Paychex Inc.  Barnett Associates, Inc.  J Dunn Inc.  Recruitment of Additional Employers 20

UI SIDES – Expansion 21  Need to expand participation  Employers & TPAs want to know:  How many States are/will participate?  States want to know:  How many Employers and TPAs are/will participate?  The larger volume reduces cost per transaction needed to operate the system.  Expand the number and types of standard data formats that can be exchanged.

UI SIDES  Early Development was focused on Web Services  Recent focus on Web Site addition to SIDES  States have same interface SIDES Web Service.  State can reach out to smaller Employers/TPAs Lower volume of UI claims Avoids cost of setting up web services Manually access and enter data Same format, validation and business rules Employers/TPAs use a combination of account numbers and Access Code/PIN 22

UI SIDES – Current Schedule 23  SIDES Web Site Software  Requirements completed January 30, 2009  Design completed February 27, 2009  Software development completed May 22, 2009  System Test completed July 31, 2009  Final Testing and debugging - February 28, 2010  Ready for Full Production 

24 UI SIDES – Web Services & Website

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29 Information Technology Support Center (ITSC)

30 Information Technology Support Center (ITSC) V1.0 30

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32 Information Technology Support Center (ITSC)

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Additional Exchange Formats  Additional standard formats for:  Wage Verification (two way communication)  Monetary Determination  Benefit Charge Notice  Nonmonetary Determination  Appeal Decision  Others….(File an Appeal, Appeal a Charge, submit Wage Records) 34

What can your state do?  Consider joining SIDES  Contact the us with your interest and get more detailed information on SIDES  Submit SBR for funding  Get SIDES on your work schedule  State commitment to join will help get more employers and TPAs to participate  For technical information on SIDES:  Go to the ITSC website for the format, requirements and design documentation. 35

Contacts:  John Sharkey or  Joe Vitale, ITSC Director  SIDES Development Consortium –  Hal Bergen, Chairman SIDES and UI Director for WI  US Department of Labor – ETA - OWS:  Dale Ziegler – Deputy Administrator 36