UIPL_28-20_Change_1_acc.pdf

ETA Advisory File Text

EMPLOYMENT AND TRAINING ADMINISTRATION ADVISORY SYSTEM U.S. DEPARTMENT OF LABOR Washington D.C. 20210 CLASSIFICATION UI CORRESPONDENCE SYMBOL OUI DPM DATE January 15 2021 RESCISSIONS None EXPIRATION DATE Continuing ADVISORY UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 28-20 Change 1 TO STATE WORKFORCE AGENCIES FROM JOHN PALLASCH s Assistant Secretary SUBJECT Additional Funding for Identity Verification or Verification of Pandemic Unemployment Assistance PUA Claimants and Funding to Assist with Efforts to Prevent and Detect Fraud and Identity Theft as well as Recover Fraud Overpayments in the PUA and Pandemic Emergency Unemployment Compensation PEUC Programs 1. Purpose. To inform states regarding i the availability of additional funding and how to apply for the funding to cover administrative expenses and solutions that can be used to support the identity verification or validation of PUA claimants ii to assist with efforts to prevent and detect fraud and imposter claims resulting from identity theft in the PUA and PEUC programs and iii to recover fraud overpayments in the PUA and PEUC programs. 2. Action Requested. The U.S. Department of Labor s Department Employment and Training Administration ETA requests that State Workforce Agency Administrators provide information contained in this Unemployment Insurance Program Letter UIPL to appropriate staff. 3. Summary and Background. a. Summary On August 31 2020 ETA issued UIPL No. 28-20 to remind states of their roles and responsibilities in addressing fraud in the UI system and the techniques and strategies available to assist states with their fraud management operations and provided states with 100 million in funding to assist with efforts to prevent and detect fraud and identity theft and recover fraud overpayments in the PUA and PEUC programs using many of the tools and resources already available to states. This Change 1 to UIPL No. 28-20 informs states regarding the availability of additional funding and how to apply for funding to cover administrative expenses and solutions that can be used to support the identity verification or validation of PUA claimants to assist with efforts to prevent and detect fraud and imposter claims resulting from identity theft in the PUA and PEUC programs and to recover fraud overpayments in the PUA and PEUC programs. On 2 December 27 2020 the President signed the Consolidated Appropriations Act 2021 Public Law Pub. L. 116 -260 which includes in Division N Title II Subtitle A the Continued Assistance for Unemployed Wor kers Act of 2020 Continued Assistance Act . For states to have an adequate system for administering the PUA program Section 242 of the Continued Assistance Act requires that states include procedures for identity verification or validation and for timel y payment to the extent reasonable and practicable by January 26 2021 30 days after the enactment of the Continued Assistance Act . b. Background Since the enactment of the Coronavirus Aid Relief and Economic Security CARES Act of 2020 which cr eated several new temporary unemployment compensation UC programs including PUA and PEUC UI fraud has increased significantly further testing the integrity of individual state systems and the UI program as a whole. Since the unprecedented increase i n claims resulting from the economic impact of the Coronavirus Disease 2019 COVID -19 pandemic UI programs have become a target for fraud with states experiencing a significant amount of imposter claims filed with stolen or false identities. The Unemplo yment Insurance Fraud Protection Guide issued by the U.S. Department of Justice on September 21 2020 states Fraudsters some of which are transnational criminal organizations are using stolen identities of U.S. citizens to open accounts and file fraud ulent claims for UI Benefits exploiting the unprecedented expansion of these benefits provided in response to economic disruption caused by the COVID -19 pandemic. Addressing improper payments and fraud remains a top priority for the Department and the entire UI system. It is critical that states implement UI programs and provisions to ensure that payments are being made to eligible individuals and that states have aggressive strategies and tools in place to prevent detect and recover fraudulent payme nts with a particular emphasis on imposter fraud by claimants using false identities. The programs and provisions within the Continued Assistance Act the Emergency Unemployment Insurance Stabilization and Access Act and the CARES Act operate in tandem with the fundamental eligibility requirements of the Federal -State UI program. These requirements include that an individual file certification with respect to each week of unemployment paid and be able and available and active ly seeking work where applic able except as specifically provided for in statute. In addition the Continued Assistance Act includes new program integrity requirements for the PUA and PEUC programs with which states must comply. Some states remain in the midst of managing extraordi nary workloads due to the effects of the spread of COVID -19. During this time there is a heightened need for states to maintain a steadfast focus on UI functions and activities that ensure program integrity and the prevention and detection of improper pa yments and fraud across all programs operated within the UI system. UIPL No. 23 -20 published on May 11 2020 also discusses program integrity for the UI system. 3 States play a fundamental role in ensuring the integrity of the UI system. While states have been provided some flexibilities as a result of the COVID -19 pandemic those flexibilities are generally limited to emergency temporary actions as needed to respond to the spread of COVID -19. States must ensure that individuals only receive benefits in accordance with federal and state law. ETA strongly encourages states to utilize the tools resources and services of the UI Integrity Center funded by the Department and operated in partnership with the National Association of State Workforce Agenci es. One of the UI Integrity Center s key assets to support addressing fraud is the Integrity Data Hub IDH which includes a variety of data sets to prevent and detect fraud based on identity theft at the time of application including an identity verifi cation solution. ETA also encourages states to consult with the UI Integrity Center on data analytics to prioritize IDH cross -match es and risk scoring results and to explore other tools and solutions available through the private sector that complement the IDH. Refer to Training and Employment Notice TEN No. 4 -20 for details. The IDH is a secure robust centralized multi -state data system that allows participating state UI agencies to submit claims for cross -matching and analysis to support the pre vention and detection of improper payments fraud and identity theft. The IDH contains an expanded set of data sources and new functionality continues to be explored and added. Currently the IDH offers the following capabilities Suspicious Actor Repos itory SAR Suspicious E -Mail Domains Foreign IP Address Detection Multi State Cross -Match MSCM Data Analytics Fraud Alert System and Identity Verification IDV . The IDH is available to participating states at no cost and is an effective tool in preventing and detecting improper payments and combatting imposter fraud and identity theft. Additionally i n UIPL No. 28 -20 the Department explained its expectation that states connect to the IDH no later than March 31 2021 and encouraged states to u se their share of the funding provided through that UIPL to support IDH connection as soon as possible. In addition to implementing the IDH s IDV solution states are encouraged to use these funds to implement other identity verification processes proced ures or tools to complement the IDV solution. States may also use these funds for other identity verification tools processes or procedures available on the market to support the identity verification or validation of PUA claimants as required in the Co ntinued Assistance Act. Because the Pacific territories Guam American Samoa the Commonwealth of the Northern Mariana Islands the Federated States of Micronesia the Republic of the 4 Marshall Islands and the Republic of Palau do not have access to the IDH ETA will provide targeted technical assistance to t he Pacific territories to assist with the exploration of solutions processes and procedures to support the identity verification or validation of PUA claimants and to identify options available to support enhanced fraud prevention and detection . The Department s Office of the Inspector General OIG Office of Investigations Labor Racketeering and Fraud Department of Justice and other federal state and local law enforcement agencies inv estigate and prosecute fraud and identity theft. In addition financial institutions and banks have ramped up their efforts to stop fraudulent payouts and detect fraudulent activity as a result of their own data analytics. It is critical for states to en gage appropriate law enforcement agencies as soon as emerging and identified fraud schemes are detected as well as to be proactive in working collaboratively with financial institutions and banks to detect fraud and recover overpayments. State Benefit Pa yment Control BPC staff or other designated state staff have the primary responsibility for these activities. Finally f raud detection operations and procedures coupled with front -end identity verification tools are critical in ensur ing payment is m ade timely and only to individuals entitled to receive benefits. As discussed in UIPL No s. 23 -20 and 28 -20 the Department strongly encourag es states to adopt multiple strategies and techniques to validate UI claims and detect and share suspicious claim a ttributes between states and consider a range of other tools available in the market when combating fraud and ensuring program integrity. 4. Funding for States to Address Fraud in the PUA and PEUC Programs . Section 242 of the Continued Assistance Act req uires states to have an adequate system for administering the PUA program including procedures for identity verification or validation and for timely payment to the extent reasonable and practicable for claims filed on or after January 26 2021. As part of its ongoing monitoring efforts of state implementation of the CARES Act programs ETA will ensure state s have adequate procedures in place to meet this requirement . To assist states with administrative expenses and solutions that can be used to suppor t the identity verification of PUA claimants and the need for states to have additional funding to support ongoing and new fraud prevention detection and investigation activities the Department is providing a n additional 100 million in administrative funding targeted specifically at addressing fraud and identity theft in the PUA and PEUC programs as part of its responsibility to provide such sums as necessary for administration of the CARES Act programs. Attachment I State Size Classifications and Funding Allocation for Identity Verification of Pandemic Unemployment Assistance PUA Claimants and Funding to Assist with Efforts to Prevent and Detect Fraud and Identity Theft as well as Recover Fraud Overpayments in the PUA and Pandemic Emergency Unem ployment Compensation PEUC Programs lists the amounts of PUA and PEUC funding for 5 each state provided for assistance with PUA identity verification or validation and for PUA and PEUC fraud investigation activities. The methodology for state funding levels is based on state size.1 For purposes of this methodology states are assigned to three groups Small Medium and Large based on the 12-month average of UI covered employment for the four quarters in calendar year 2019 reported on the ES 202 Employment Wages and Contributions report published by the Bureau of Labor Statistics. States are assigned to the size groups as follows Small covered employment under 1 million employees Medium covered employment between 1 million and 2 million employees Large covered employment greater than 2 million employees 1 The Pacific territories are included in PUA pursuant to CARES Act Section 2101 a 5 but not in PEUC. Since the Pacific territories have relatively small populations and do not operate regular UI programs and therefore lack data on employment their PUA funding is based on estimated claims workloads. a. Use of Funds. States may use the funds made available under this UIPL to cover administrative expenses and solutions that can be used to support the identity verification or validation of PUA claimants to assist with efforts to prevent and detect fraud and imposter claims resulting from identity theft in the PUA and PEUC programs and to recover fraud overpayments in the PUA and PEUC programs. Examples of permissible uses of these funds include but are not limited to i Implement one or more tool s strategy ies providing the front -end identity verification or validation of PUA claimants as required in Section 242 of the Continued Assistance Act. States may fulfill the new requirement to verify or validate the identity of PUA claimants by implementing the IDV solution available through the UI Integrity Center s IDH or an equivalent tool and may use funds provided to cover any administrative costs associated with establishing the IDV connection. The IDH s IDV solution is provided at no cost to the states. The IDH s IDV solution provides centralized identity verification powered by Experian s Precise ID solution. The IDV component offers states advanced fraud risk scoring to maximize front-end identity verification enabling states to assess whether an individual is using a false stolen or synthetic identity. In addition to implementing the IDH s IDV solution states are encouraged to use these funds to implement other identity verification processes procedures or tools to complement the IDV solution. States may also use these funds for other identity verification tools processes or procedures available on the market to support the identity verification or validation of PUA claimants as required in the Continued Assistance Act. 6 ii Staff or contract services to conduct fraud investigations and other fraud and identity theft detection -related activities or to implement tools to increase prevention detection and recovery of fraudulent im proper payments in the PUA and PEUC programs. Examples of activities that these funds may be used for include but are not limited to Funding for staff to conduct fraud prevention detection and investigat ion activities. Accessing and utilizing the priv ate or public data sets available through the IDH see Section 3 b above for IDH details . As indicated in UIPL No. 28 -20 ETA expects that all states will be positioned to use the IDH data sets as soon as administratively feasible and no later than Mar ch 31 2021. Implementing data mining tools including the use of staff or contractor services for prioritizing and managing cross -match hits and conducting data mining activities. Implementing software tools to conduct data analytics including the use o f staff or contractor services for conducting data analytics activities. b. Application Instructions. States are required to submit an SF -424 for each funding allotment i.e. one SF -424 for the PUA funding and a second SF -424 for the PEUC funding . ETA e ncourages states to submit these forms as soon as possible but no later than February 15 202 1 by electronic submission to the National Office at covid -19 dol.gov with a c opy to the appropriate ETA Regional Office. For additional information on completing the SF -424 please refer to Attachment II Instructions for Completing the SF -424 . Attachment I State Size Classifications and Funding Allocation for Identity Verificat ion of Pandemic Unemployment Assistance PUA Claimants and Funding to Assist with Efforts to Prevent and Detect Fraud and Identity Theft as well as Recover Fraud Overpayments in the PUA and Pandemic Emergency Unemployment Compensation PEUC Programs whi ch lists the funding allotment s for both the PUA and PEUC programs for each state. c. Reporting Requirements. States will report quarterly progress on the form ETA 9178 -F that will be used by ETA to track each state s progress on activities and ensure that a state s use of funds is consistent with the permissible activities outlined in section 4.a. of this UIPL. Please refer to Attachment III in UIPL No. 28 -20 for instructions for completion and the timeline of submission for the ETA 9178 -F. 5. Inquiries . States should direct inquiries to covid -19 dol.gov and copy the appropriate ETA Regional O ffice . 6. References . Consolidated Appropriations Act 2021 including Division N Title II Subtitle A the Continued Assi stance for Unemployed Workers Act of 2020 Pub. L. 116 -260 7 Coronavirus Aid Relief and Economic Security CARES Act Pub. L. 116 -136 Title II Subtitle A Relief for Workers Affected by Coronavirus Act Families First Coronavirus Response Act Pub. L. 116 -127 including Division D Emergency Unemployment Insurance Stabilization and Access Act of 2020 EUISAA Section 303 of the Social Security Act 42 U.S.C. 503 Unemployment Insurance Program Letter UIPL No. 9-21 Continued Assistance for Unemp loyed Workers Act of 2020 Continued Assistance Act Summary of Key Unemployment Insurance UI Provisions issued December 30 2020 https wdr.doleta.gov directives corr doc.cfm D OCN 3831 UIPL No. 28 -20 Addressing Fraud in the Unemployment Insurance UI System and Providing States with Funding to Assist with Efforts to Prevent and Detect Fraud and Identity Theft and Recover Fraud Overpayments in the Pandemic Unemployment Assi stance PUA and Pandemic Emergency Unemployment Compensation PEUC Programs issued August 31 2020 https wdr.doleta.gov directives corr doc.cfm DOCN 8044 UIPL No. 23 -20 Progra m Integrity for the Unemployment Insurance UI Program and the UI Programs Authorized by the Coronavirus Aid Relief and Economic Security CARES Act of 2020 - Federal Pandemic Unemployment Compensation FPUC Pandemic Unemployment Assistance PUA an d Pandemic Emergency Unemployment Compensation PEUC Programs issued May 11 2020 https wdr.doleta.gov directives corr doc.cfm DOCN 4621 UIPL No. 16 -20 Coronavirus Aid Relief and Economic Security CARES Act of 2020 Pandemic Unemployment Assistance PUA Program Operating Financial and Reporting Instructions issued April 5 2020 https wdr.doleta.g ov directives corr doc.cfm DOCN 4628 UIPL No. 16 -20 Change 1 Coronavirus Aid Relief and Economic Security CARES Act of 2020 Pandemic Unemployment Assistance PUA Program Reporting Instructions and Questions and Answers issued April 27 2020 https wdr.doleta.gov directives corr doc.cfm DOCN 5899 UIPL No. 16 -20 Change 2 Coronavirus Aid Relief and Economic Security CARES Act of 2020 - Pandemic Unemployment Assistance PUA Additional Questions and Answers issued July 21 2020 https wdr.doleta.gov directives corr doc.cfm DOCN 5479 UIPL No. 16 -20 Change 3 Coronavirus Aid Relief and Economi c Security CARES Act of 2020 - Eligibility of Individuals who are Caregivers for Pandemic Unemployment Assistance PUA in the Context of School Systems Reopening issued August 27 2020 https wdr.doleta.gov directives corr doc.cfm DOCN 3849 UIPL No. 16 -20 Change 4 Continued Assistance to Unemployed Workers Act of 2020 Pandemic Unemployment Assistance PUA Program New Operating Instructions and Reporting Changes issued Jan uary 8 2021 https wdr.doleta.gov directives corr doc.cfm DOCN 6973 UIPL No. 01 -16 Federal Requirements to Protect Individual Rights in State Unemployment Compensation Overpaymen t Prevention and Recovery Procedures issued October 1 2015 https wdr.doleta.gov directives corr doc.cfm DOCN 5763 8 UIPL No. 01 -16 Change 1 Federal Requirements to Protect Claim ant Rights in State Unemployment Compensation Overpayment Prevention and Recovery Procedures - Questions and Answers issued January 13 2017 https wdr.doleta.gov directives corr do c.cfm DOCN 7706 UIPL No. 19 -11 National Effort to Reduce Improper Payments in the Unemployment Insurance UI Program issued June 10 2011 https wdr.doleta.gov directives corr d oc.cfm DOCN 3036 UIPL No. 29 -05 Memorandum of Understanding Regarding Unemployment Insurance Criminal Investigations Between the U.S. Department of Labor s Office of Inspector General and the Employment and Training Administration issued August 2 200 5 https wdr.doleta.gov directives corr doc.cfm DOCN 2104 UIPL No. 04 -01 Payment of Compensation and Timeliness of Determinations during a Continued Claims Series issued October 27 2000 https wdr.doleta.gov directives corr doc.cfm DOCN 1746 TEN No. 3 -20 Unemployment Insurance UI Integrity Center s Integrity Data Hub IDH Fraud Alert System issued Au gust 31 2020 https wdr.doleta.gov directives corr doc.cfm DOCN 5585 TEN No. 4 -20 Encouragement for States to Use the Integrity Data Hub IDH available through the Unemployment Insurance UI Integrity Center issued August 31 2020 https wdr.doleta.gov directives corr doc.cfm DOCN 3588 and Employment Security Manual Section 7511 The Secretary s Inter pretation of Federal Law Requirements available at 20 C.F.R. Part 614 Appendix C Standard for Fraud and Overpayment Detection . 7. Attachment s . Attachment I State Size Classifications and Funding Allocation for Identity Verification of Pandemic Unem ployment Assistance PUA Claimants and to Assist with Efforts to Prevent and Detect Fraud and Identity Theft as well as Recover Fraud Overpayments in the PUA and Pandemic Emergency Unemployment Compensation PEUC Programs Attachment II Instructions for C ompleting the SF -424