Modernizing Unemployment Insurance: Lessons From The Tiger Teams

The unprecedented volume of unemployment insurance (UI) claims during the COVID-19 pandemic highlighted significant shortcomings in the administration of unemployment benefits. As job losses mounted, overwhelmed state UI programs failed to promptly provide benefits to affected workers. Criminal actors, meanwhile, exploited vulnerabilities in outdated IT systems and ineffective fraud detection and prevention methods within state programs, resulting in an unprecedented rise in fraud that the Government Accountability Office (GAO) estimates amounted to at least $100 billion stolen during the pandemic.

To begin addressing these issues, the U.S. Department of Labor (DOL) used UI modernization funds from the American Rescue Plan Act (ARPA) to deploy “Tiger Teams,” composed of operations, technology, and UI experts, to consult with interested states to improve the administration of unemployment insurance. This report presents findings from a review by the Bipartisan Policy Center of DOL’s Tiger Teams initiative. To conduct the review, BPC held a series of interviews from February to June 2023 with UI officials from 11 of 36 participating states, DOL officials responsible for overseeing the initiative, and state-level claimant advocacy groups that contributed to the initiative. BPC’s primary aim was to assess the state of UI administration today and identify opportunities to boost the integrity, equity, and timeliness of the UI system.

Through this effort, BPC learned that states’ views of the Tiger Teams initiative were largely positive. Participants welcomed the expertise of the Tiger Teams, their ability to adapt to each state’s circumstances, and the federal funding that came with participating in the initiative. However, some states expressed concern and confusion around the timeline and funding levels for Tiger Team recommendations, guidelines for grant modifications, and state autonomy in determining the prioritization of various reforms.

In addition, BPC compiled 14 key lessons for updating UI benefits administration. A central theme is how closely tied integrity, equity, and timeliness are to improving the administration of UI benefits. In particular, BPC’s review found that preventing fraud is crucial for giving states the capacity to create a resilient, equitable, and timely safety net moving forward. Reforms that make state UI programs more user-friendly limit application errors, curtail the volume of suspicious claims states need to investigate, reduce improper payments, and enhance the timeliness of benefits processing.

These lessons include takeaways on the role of technology and resources in state UI programs and insights concerning DOL’s three pillars of UI modernization. The lessons also shed light on long-standing inefficiencies in the UI system and underscore common themes across states. Those engaged in modernizing state UI administration should take note of these lessons to improve the effectiveness of the programs and ensure that they are ready to weather economic crises.

Summary of Lessons Learned

Technology and Resources

1) States face challenges stemming from a reliance on outdated IT systems.
2) Modernizing IT systems requires considerable resources and effort.
3) The framework used to allocate federal resources to state UI programs does not properly enable states to improve benefits administration.
4) As UI rebounds from the pandemic, the efficient utilization of staff time is a primary focus.

Fraud

5) Enhanced digital identity proofing methods are crucial to combat fraud.
6) Although digital identity proofing methods help combat fraud, they might also restrict access to benefits among eligible claimants.
7) Collecting and sharing data between states is pivotal to enhancing program integrity.

Equitable Access

8) The lack of translation services restricts access for non-English speakers.
9) Complex language used in the claims process impedes claimants’ ability to understand requirements.
10) State UI websites are often out of date and difficult to navigate.
11) Providing claimants with multiple pathways to access UI benefits is important to ensuring equitable access.
12) Data collection and community outreach help states identify and eliminate barriers to access.

Timeliness

13) Case management systems effectively aid in processing claims.
14) An increasing number of innovative technology tools are available to re-engineer UI processes.