COLLECTING HARD TO COLLECT EARNINGS: FINDING THE RIGHT TOOL FOR THE JOB Moderator: Diane Hogan, Informatix Inc. Speaker: Matt Marsolais, OCSE Speaker: Andrew Szymak, Oklahoma CSS ERICSA 50 th Annual Training Conference & Exposition ▪ May 19 – 23 ▪ Hilton Orlando Lake Buena Vista, Florida

Agenda Multistate Financial Institution Data Match Program Thrift Savings Plan Match Federally Assisted State Transmitted Levy Insurance Match Program Debt Inquiry Service for Insurers 2

Multistate Financial Institution Data Match (MSFIDM) Legislation 1996 – Required state IV-D agencies to enter into matching agreements with financial institutions (FI) conducting business in their state to obtain account information about delinquent obligors 1998 – Authorized OCSE to conduct a centralized match for those FIs conducting business in two or more states 3

MSFIDM Information Over 4,500 financial institutions participate Matches are conducted on a quarterly basis Match data is provided to states through the Federal Case Registry (FCR) States use their freeze and seize procedures to collect past-due support 4

MSFIDM Success FIs return on average 4 million matches per quarter associated with 1.7 million unique SSNs States voluntarily report collections – $ 20.9 million in 2000 – $144 million in 2011 – $110 million in 2012 (still collecting data) $1.31 billion collected since program inception 5

Thrift Savings Plan (TSP) Retirement plan offered to federal civilian employees and members of the military Partnership between OCSE and Federal Retirement Thrift Investment Board (FRTIB) – responsible for administering the TSP Quarterly matches implemented in

TSP Success States have voluntarily reported $20.4 million All but four states garnish TSP accounts! 7 StateCollections Texas$13,577,062 Illinois$ 2,601,662 Tennessee$ 1,651,442 Arizona$ 908,880 Oklahoma$ 672,589 Florida$ 426,981

Federally Assisted State Transmitted (FAST) Levy Pilot Automate freeze/seize process between states and FIs – Process flow – OCSE as the “conduit” Pilot participants – FIs: JPMorgan Chase, Bank of America, Wells Fargo, US Bank, Navy Federal Credit Union – States: California, District of Columbia, New Jersey, Pennsylvania, Tennessee, Washington 8

FAST Levy Pilot Progress to date – Meetings/Conference Calls – Record Layout Timeframe Next Steps 9

Insurance Match (IM) Program Authorized by Section 452(l) [to be redesignated (m)]of the Social Security Act – OCSE works with insurers or their agents and state workers’ compensation agencies to compare information about individuals who owe past-due support with payee information on insurance claims, settlements, payments and awards – Information provided to states so they can intercept payouts and apply to past-due support 10

IM Program Participation is voluntary for states and insurers – Currently matching with 22 State Workers’ Compensation Agencies 756 Insurers through the Insurance Services Office U.S. Department of Labor – Matches since program inception: 351,473 – 25 of the 53 states/territories voluntarily reported collections totaling over $18 million 11

Debt Inquiry Service (DIS) for Insurers Web-based application on the FPLS portal lets insurers report upcoming lump sum and other payments What happens when there’s a match? – Insurers receive information about the state(s) that is responsible for collecting past-due support – States receive match notification so they can take action 12

Questions/Comments Contact Matt Marsolais, OCSE Analyst (202)

MISSED COLLECTION CHALLENGES AND THEIR SOLUTIONS (IN OTHER WORDS, FINDING THE RIGHT TOOL)

WHAT ARE THE MISSED COLLECTION CHALENGES? -FIDM (Financial Institution Data Match) -Instate matching opportunities -Thrift Savings Plan (TSP) -Insurance Matching

-Alaska Permanent Dividend Fund -BP Oil Spill a.k.a. Gulf Coast Cleanup Fund -Interstate Unemployment Insurance Benefit (UIB) Intercept

-Social Security Administration (SSA) Intercepts -Limited Services a.k.a. AEI

FIDM Instate Matching Opportunities -Challenge: A large number of FIDM matches are missed because states are not sharing Instate bank match data -Solution: Make access to Instate bank account data a simple and effective process

Access to Out-of-State FIDM Matches -Two sources of matches -Multi-State FIDM (e.g., Bank of America, Chase, Regions, Wells Fargo) -In-state matches In-house Alliance or consortium

FIDM Alliance -Made up of 18 states entering into an Alliance to outsource in-state FIDM programs. -Formed to cooperatively develop, issue and oversee these FIDM operations. -Cross border FIDM matching done on a state to state agreement basis.

FIDM Alliance (Continued) -Each participating state is responsible for entering into individual contracts with the selected contractor that oversees the program. -Texas is the lead state of the Alliance for the purpose of procurement

Interstate Data Exchange Consortium - IDEC -Oklahoma receives its Interstate FIDM matches through IDEC. What is IDEC? -A partnership of 15 states for the collection and enforcement of child support

Interstate Data Exchange Consortium – IDEC (Continued) -Access to accounts in all member states -Operated as a state-administered, state-owned system -Managed by the State of South Carolina

FIDM Limited Partnerships -IDEC offers a Limited Partnership that allows non-member states to participate in the quarterly interstate matching of Full Member states -Limited Partners become reciprocal partners with IDEC member states

Two types of Limited Partnerships with IDEC -FIDM Alliance member states -Independent FIDM states

Oklahoma and Texas Limited Partnership Collections -Oklahoma is an IDEC member -Overall Oklahoma 2012 FIDM Collections: $3,216,748 Overall Oklahoma Collections from Limited Partnership participation: $580,530

-Texas is a member of the FIDM Alliance -Overall Texas 2012 FIDM Collections: $36,099,858 Texas Overall Collections from Limited Partnership participation: $593,912

Thrift Savings Plan (TSP) -Very good collection tool! -Simple processing Use Income Withholding Order for State Agencies either by itself or as cover letter -Cooperative agency / good customer support

Thrift Savings Plan (TSP) Collections -Oklahoma Overall Collections: $807,053 -Texas Collections: $13,577,062 -Tennessee Collections: $2,015,945

Insurance Matching Personal Injury Claims -Insurance matches are received on a daily basis from Child Support Lien Network (CSLN) or OCSE. -Matches go through an automated analyzer process

-Worker verifies insurance lien printed automatically. Worker may also print out lien form manually - Liens are printed at local offices for attorney signature. -Liens are sent to insurance company NCP, NCP’s attorney.

-56 O.S. Sect 237B – Mandatory matching law. -Claims of $500 or more -Insurers authorized to do business in Oklahoma -Contact OCSS to verify if claimant owes past due support

Workers Compensation Claims -Insurance matches are received on a daily basis from CSLN, OCSE, OK state insurance fund and Workers Compensation Court -Matches go through an automated analyzer process, similar to personal injury cases

-Worker verifies insurance lien printed automatically. Workermay also print forms manually. -Liens are printed at local office for attorney signature. -IWOs are sent to collect on weekly temporary benefit payments

-Liens are sent to insurance company, NCP, NCP’s attorney and filed with workers compensation court by state office personnel. -56 O.S. Sect. 237B – Mandatory matching law also applies to workers compensation claims

-Oklahoma Personal Injury Settlement Intercept 2012 Fiscal Year Collections: $1,339,225 -Workers Compensation Settlement Intercept 2012 Fiscal Year Collections: $,5,697,804 (IWO $1,923,385, Liens $3,774,419)

-Texas Overall Insurance Settlement Intercept 2012 Fiscal Year Collections: $34,511,816 -Tennessee Overall Insurance Settlement Intercept 2012 Fiscal Year Collections: $1,482,123

Attaching the Alaska Permanent Dividend Fund -Alaska citizens’ percentage of state revenues from a variety of sources within the state -To match with Alaska: Send inquiry file with NCP information matched against their Permanent Dividend Fund database. Match information requested is Obligor’s name, SSN and DOB.

-Preferred method of transmitting inquiry file is using FTP, (using encrypted CDs is also possible). -To attach dividend: Send UIFSA transmittal 1, requesting that a garnishment go against the obligor’s dividend. Limited Services requests are sent back to Alaska in August.

-Funds are sent back to requesting state in October. -Oklahoma yearly dividends collections range between $11K to $50K -Texas dividend 2012 collections were $64,869 -Tennessee dividend 2012 collections were $7,817

BP Oil Spill a.k.a. Gulf Coast Cleanup Fund -$20 Billion available for claims associated with the Deepwater Horizon oil spill -Challenge: How to stake claims on money owed to noncustodial parents behind on their child support payments.

-Possible solution: Send an electronic list of NCP’s owing past due support to Gulf Coastal Cleanup Fund (GCFF) -Problem: Out of 200,000 cases Oklahoma could find 21,926 NCPs with possible connections to settlement funds

-Problem: GCFF said they would not take electronic lists so we were looking at subpoenas -A lot of subpoenas. Stack of paper over 70 inches tall filling five paper boxes. They were sent to GCFF on November 12, Fortunately for GCFF we also included an encrypted CD with the same information

-Upon receipt of Oklahoma’s subpoenas and CD we received a call from GCFF telling us they would process our electronic file -GCFF asked for IWOs on the specific matches (81 total). Hard copies and an additional electronic file was sent with the IWO information -Oklahoma referred GCFF to OCSE in order to establish a nationwide procedure to get an electronic matching system in place

-Total payments Oklahoma received to date add up to $56,000. Initial payments were from smaller claims ranging from a few hundred dollars up to $3,500. The largest single payment to date being $16,250 -Total payment Texas received to date add up to $69,000 -Total payment Tennessee received to date add up to $25,163

Interstate Unemployment Insurance Benefits (UIB) Intercepts -Challenge: OCSS received UIB information through the Federal Case Registry (FCR) but the data would sit on FCR until discovered by a child support specialist -Solution: Automate the process to intercept Interstate UIB

How The Process Works -Two analyzers are involved in the automated process -UIB Analyzer: Program runs on a daily basis looking for matches between FCR UIB claims and open OCSS cases in our system -IWO Analyzer: If appropriate sends an Income Withholding Order to another state’s Employment Security Commission

State Classifications; Easy, Medium and Hard -Easy: Direct Income Withholding Order (IWO) (10 states and one territory currently allow this). IN, MI, MN, NY, ND, OH, OK, PA, PR, TN and WI. -If a state accepts IWOs directly, the system automatically sends an IWO to that state’s State Employment Security Commission (SESC).

-Medium: Limited Services Interstate Referral -If a state does not accept IWOs but does accept Limited Services Interstate Referrals, the system prints a Limited Services Interstate Referral document (UIFSA Transmittal 1) at the district offices printer. -Worker sends the Limited Services referral with any other necessary documents to the other state’s interstate central registry.

-Hard: Full Service Interstate Referral. -If a state does not accept direct IWOs or Limited Services Interstate Referrals, the system can not automate the process. -The worker must prepare a Full Service Intergovernmental Referral and forward it to the appropriate state’s Interstate Central Registry.

2012 Interstate UIB Collections -1,520 IWO’s were issued to direct UIB withholding states Interstate UIB collections: $163,647

SSA Intercept Process -Two types of collections from SSA -Use e-IWO to intercept Social Security benefits -Collect on lump sum payments

SSA IWO Process -Process list of pending claims provided by SSA using automated process -Only go after claims with Title 2 (SSD) benefits -Presently send average of 950 IWOs to SSA each month

SSA Lump Sum Process -OCSS receives or call from SSA payment center about lump sum payment. Average of 50 to 60 lump sum contacts per month. -OCSS state office and Oklahoma Employer Services Center (OKESC)review case to verify principal and interest balances.

-We can ask for 100% of lump sum -CCPA does not apply. -50% already goes to beneficiary -Confirmation by phone from OCSS office regarding case status and balances. -Key to success with SSA: Establish a solid working relationship with local SSA offices.

-Oklahoma Social Security Administration (SSA)Intercept 2012 Collections: $12.5 Million.

Limited Services a.k.a. AEI -What can Limited Services requests be used for: -FIDM -Unemployment Insurance Benefit (UIB) Intercepts -Personal Injury claims -Workers Compensation claims -Liens in Probate cases

-Service of Process -State Tax Intercept -Other types of assess (you name it and we will try to collect it).

How to Work Incoming Limited Services Referrals (Oklahoma’s Perspective) -Build case and obligation in our system -Most cases will require UIFSA Transmittal 1, copy of arrearage computation and order. Also specific information on asset to be attached. -Note: Some states may only require the use of the UIFSA Transmittal 3 form.

-Prepare and send appropriate notices and other documents to all necessary parties -If contacted by obligor, work with the Requesting State to assist with review and hearing request -Receive attached funds and forward to Requesting State and close case. -Both states will be able to report the collection

2011 Limited Services Collections -Oklahoma received 46 limited services requests. 32 actions were successful with $106,449 in collections. -Texas collected $374,558 in outgoing referrals.

Contact Andrew Szymak Oklahoma Child Support Services FIDM Coordinator Phone: (405) Fax: (405)