Modernizing the Unemployment Insurance Systems: What Should States Consider
State Workforce agencies have been using outdated mainframe-based computer systems and software for the administration of unemployment benefits. This was flagged back in 2010 by a study conducted by the National Association of State Workforce Agencies (NASWA).
Shortcomings in unemployment insurance systems became apparent when, in early April 2020 due to pandemic related layoffs, 6.2 million unemployed Americans filed initial claims for unemployment benefits in a span of one week. The massive surge in initial claims overwhelmed the aging systems that State Workforce agencies across the country depended on. The result was millions of jobless and desperate Americans left to deal with unresponsive governmental websites and the uncertainty of if, and when, they would receive their benefits. The chaotic situation was compounded by several fraudulent claims, which were almost impossible to detect with the already struggling computer systems. For example, the Ohio Department of Jobs and Family Services (ODJFS) stated about $506 million were spent on fraudulent pandemic unemployment claims.
With the height of the pandemic crisis over and weekly initial claims down to about 250,000 as of July 2022, a few states are reviewing the situation and have initiated unemployment insurance technology modernization.
Unfortunately, many others are still using aging systems that won’t stand up to another unemployment crisis, should we face one in the future. Now is the time for states to overhaul their unemployment insurance systems with cutting-edge technology. The adoption of cloud-native applications, automation, artificial intelligence, machine learning, blockchain, and other modern technologies can transform the unemployment insurance system and make processes and operations easier for staff, workers, and employers.
Below are a few key points for states to focus on while developing an unemployment insurance modernization plan to get the most out of next-gen digital systems.
Take advantage of modern cloud infrastructure when upgrading systems. One of the primary reasons the existing unemployment insurance operating systems crumbled under the surge of initial claims is that they were confined to rigid, legacy mainframe systems. Cloud-native solutions in UI system offer significant levels of flexibility and scalability, and bring with it several cutting-edge features, such as chatbots that provide predictive capabilities for the next course of action, or the low-code or no-code capabilities that can help deploy new features at speed. What State Workforce agencies should look for in a cloud-native UI solution are key features that redefine and transform their existing unemployment insurance applications into a truly digital and resilient system. These include:
- A single system (bringing together tax, benefits, appeals, job services, and call center) to meet the needs of our constituents.
- Customer-centric with one update everywhere as a native capability.
- Machine learning for fraud detection and tracking trends in the labor market.
- Industry-specific data models
- An all supporting infrastructure, from storage, servers, OS, networking, and virtualization/containerization.
Round-the-clock Online and Mobile Support
Modern technology allows us to shop, order meals, book movie tickets, or access customer support for a variety of services, with little effort, at any time of the day or night. It seems odd then that the unemployed who need to submit a query or file a claim are restricted to office hours to do so. Providing round-the-clock support should be a central feature of a modernized unemployment insurance system.
Mobile-optimized Websites and Applications
Low-wage and immigrant workers mostly depend on their phones for internet usage. States considering modernization of their unemployment insurance systems must ensure that they provide an intuitive user experience that can be accessed from a mobile device. This will make it easier for unemployed workers to file a claim, access their benefits, or upload documents directly from their phones.
Simple Password Reset Procedures
With so many online accounts these days, passwords are often forgotten. Resetting a password and regaining access to account should be a swift and painless self-service authentication process. Unfortunately, legacy unemployment insurance systems in some states still require that new passwords be physically mailed to users, while others require administrative involvement on part of the agency to issue new passwords. Modern self-service password reset and blockchain authentication procedures are highly secure, saving a great deal of time and effort. Incorporating such features not only ensures that unemployed workers (with bills to pay and families to feed) receive their benefits on time but also allows agency staff to focus on processing claims rather than fielding password-related calls and queries.
Call Back and Chat Technology
Rather than keeping callers on hold for extended periods during busy hours, State Workforce agencies should adopt call-back procedures to return calls. AI-enabled chatbots can be incorporated to answer routine questions and inquiries, reducing the volume of calls coming in and allowing staff to concentrate on more complicated issues.
State Workforce agencies that transform and modernize their systems will be better placed to face future challenges while providing constituents with efficient service and timely access to their benefits. Next-gen unemployment insurance claims management software for government agencies has the power to eliminate fraud, automate processes, protect against cyberattacks, boost agency staff productivity, reduce costs, and even guide unemployed workers on acquiring in-demand skills so they may find gainful employment.
A platform-driven approach to modernization for unemployment insurance claims, benefits, tax and appeals system has the potential to enhance the efficiency of handling increased workloads, leverage artificial intelligence to deliver personalized interventions, and even use unemployment insurance programs as a catalyst for driving broader transformation in the workforce.
It’s time to reimagine the delivery of unemployment insurance with a renewed focus on the claimant experience.
- What is an Unemployment Insurance System
- Using AI To Modernize the Unemployment Insurance System
- Building a Future-Proof Unemployment Insurance System
Stephanie Puryear, Principal Consultant – National Labor Practice, Infosys Public Services
Stephanie has 20 years of experience helping Labor and Workforce Departments administer Unemployment Insurance (UI) programs effectively. She has delivered UI solutions in 5 states and is the Manager for Business Analysis and the UI PMO for LaborForce. Stephanie has designed highly user-friend systems and is expert on helping agencies fight UI fraud.