Five Methods Through Which ARPA Funds Are Revamping the Unemployment Benefits System

Evmark Business Solutions

During the COVID-19 pandemic, unemployment insurance benefits provided crucial support to over 53 million workers, mitigating the impact of job loss and injecting an estimated $880 billion into the economy. However, the pandemic also exposed weaknesses in the unemployment insurance program, as state agencies struggled to handle the unprecedented surge in claims and the creation of new unemployment programs.

To address these shortcomings, the American Rescue Plan Act (ARPA) initially allocated $2 billion to modernize the unemployment insurance system. Although this amount was later reduced to $1 billion, the Department of Labor strategically invested these funds to address critical issues and strengthen the program. As a result, $782.9 million has been delivered to 52 of 53 jurisdictions to help them achieve these goals. Here are five ways in which ARPA funding is modernizing the unemployment insurance system.

1. Safeguarding against identity fraud

One of the key uses of ARPA funding is to help states better use data and technology to confirm identities and prevent fraud. This includes the implementation of a National Identity Verification Offering, which provides both online and in-person verification services through the U.S. General Services’ Login.gov and the U.S. Postal Service. If you suspect that you may be a victim of unemployment identity fraud, you can learn how to report this information at dol.gov/agencies/eta/UIIDtheft.

2. Promoting equitable access through plain language and customer assistance

ARPA investments are also supporting efforts to ensure equitable access to unemployment insurance benefits and services. This includes initiatives to promote the use of plain language in communications with claimants. For example, Montana has streamlined its claimant notices, removing over 500 and simplifying the language of the remaining 175. This change is expected to benefit all claimants, but it is especially helpful for those with lower levels of education who may have difficulty understanding their rights. It also saves money by reducing the need for call center inquiries.

3. Accelerating payment timeliness

ARPA funding is also being used to support the adoption of modernized technologies that streamline manual processes and information exchange between states, employers, and their representatives. This ensures that eligible claimants receive benefit payments without delay. For instance, Connecticut is using funds to promote the State Information Data Exchange System, which reduces the time spent validating claims and allows benefits to be paid more quickly.

4. IT modernization for improved claimant experiences

Comprehensive IT modernization initiatives are also being driven by ARPA investments, resulting in improved claimant experiences. For example, the Department of Labor worked with New Jersey to develop a more intuitive online application that takes claimants at least 30 minutes less to complete than the previous application.

5. Collaboration and innovation

Finally, ARPA funding is fostering collaboration and innovation among states as they work to modernize their unemployment insurance systems. By sharing best practices and learning from each other, states are able to make significant improvements to their programs and better serve their residents.

In conclusion, the American Rescue Plan Act has provided crucial funding to modernize the unemployment insurance system and address the shortcomings exposed by the COVID-19 pandemic. Through strategic investments, the Department of Labor is working with states to strengthen fraud detection and prevention, promote equitable access, accelerate payment timeliness, improve claimant experiences, and foster collaboration and innovation. These efforts will not only benefit current claimants, but also help prepare the system for any future crises. 

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