Division of Employment Security Fraud Prevention, Overpayment - PowerPoint PPT Presentation

Division of Employment Security Fraud Prevention, Overpayment Recovery and UI Tax Collections Status House Select Committee on Legacy Costs from the State Health Plan, Pensions and ESC November 13, 2012

Types of Employers Paying UI Tax  Contributory employers  How contributions determined  Contributory employer accounts based on individual experience/benefits paid  Maximum tax paid per employer – 6.84% ◦ Mandated by NC Legislature

Employer Accounts Contributory Employers  196,000 active accounts  35,000 inactive accounts Reimbursable Employers ◦ Non-Profits  547 active accounts  52 inactive accounts State and Local Government  1,189 active accounts Indian Tribes: Example - Eastern Band of the Cherokees

Experience Rated Balances Active contributing employers(negative balance) — 34,476 Total negative balance $2.5 billion Inactive contributing employers (negative balance) 13,316 Total negative balance $464 million

UI Tax Collections Effort  10 years of active pursuit of collections  Tax liens filed 45 days after assessment  Active judgments - $13.4 million in taxes  Employers - no assets - $10.4 million  Bankruptcy - $2.0 million

Benefit Charges by Industry % of T otal Charges in 2011  Manufacturing 30.8%  Construction 17.2%  Administration 8.7%  Retail Trade 7.8%  Professional 6.7%  Wholesale Trade 5.8%  Healthcare 4.0%  Transportation & Warehouse 3.9%  Other 15.1%  Total 100%

Overpayments Fiscal Year: June 2011-July 2012 Fraud • Number of Cases 5,561 • Overpayments Established $16,825,155.00 • Overpayments Recovered $7,033,548.88 Non Fraud • Number of Cases 35,128 • Overpayments Established $37,998,302.50 • Overpayments Recovered $21,298,069.68

USDOL Estimating Approach  Small Sample — 500 out of 400,000 cases/ per year  Extrapolated approach Percentage of Overpayments July 1, 2008 — June 30, 2011 April 2011 — March 2012 US - 11.05% US - 11.12% NC - 8.6% NC - 10.69% VA - 17.77% VA - 17.42% SC - 17.9% SC - 15.04%

Latest DES Initiatives  Increased Investigative Efforts  Staff adjustments  Interface with district attorneys and OIG  Treasury Offset Program Implementation  Recovery of UI overpayments through IRS  19,065 recipients notified  $50 million — Initially $15 million  Start — January 2013  Increased Use of Technology  National Directory of New Hire  Division of Corrections  NC FACTS

Latest DES Initiatives  Employers are critical to good decisions  Timely responses on all cases  Encourage employers to use electronic system for response  DES staff — more effort to contact employers  More claims in formation to employers  Claimants  Require more accurate information  Better explanation of importance of accurate statements  Consequences explained  Actively seeking work – individual conference required

Latest DES Initiatives  Improved Initial Claims Adjudication  Better Supervision  Added staff to improve timeliness and quality  Upgraded internal procedures following DOL review

Latest DES Initiatives  Improving Business Processes  UI Benefits Information Systems (IS) to be replaced  RFP process to start in December 2012  3 years  Upgrading operating practices  Now — reliance on paper documents – delays in claims care processing  December 2012 thru October 2013 — NCSU/DES  Imaging of documents for quicker access