COLUMBUS, Ohio – Banks and insurance companies have loaned executives to the state to help improve the overwhelmed unemployment system that has been hit by hundreds of thousands of fraudulent claims in addition to legitimate claims filed.
Fifth Third Bank, Nationwide Insurance, Western & Southern Financial Group, Encova Insurance, and KeyBank are hiring executives to work on efforts designed to examine short and long-term corrections.
“We have a laser focus on it and will stick with it,” said Governor Mike DeWine on Thursday and announced the partnership.
The experts will help the state recruitment agency address problems with the unemployment claims system. The salaries of the 16 people in the public-private partnership are paid by their employers.
In the past 45 weeks, the state Human Services Agency has distributed more than $ 8 billion in unemployment benefits to more than 908,000 Ohioans. However, the system was also plagued by hours of delays and complaints from people on the phone unable to get help.
The 3.6 million jobless claims filed during the pandemic are more than the 1991, 2002 and 2009 recessions combined, said Kimberly Henderson, director of the Ohio Department of Job and Family Services.
“We strive to give every eligible Ohioan the unemployment benefits they need,” Henderson said Thursday. “This new partnership will allow the Labor Office to improve in the most critical areas we currently face: answering every call, processing claims and fighting fraud.”
The partnership is led by Ohio Business Roundtable CEO, former Ohio Congressman Pat Tiberi. The team will report back to Henderson.
The state needed experts with experience in call center operations and others with experience in fraud detection, DeWine said.
In a statement made ahead of DeWine’s announcement, the union that represents workers in the human services field accused private contractors hired during the pandemic of overpayments and fraudulent claims. This in turn resulted in more work for government employees, the union said.
“The slowdown in unemployment claims is right on the shoulders of these private providers,” said Chris Mabe, president of the Ohio Civil Service Employees Association.
The state contracts with private providers and employs an in-house IT team to help manage its unemployment schemes. The regular unemployment system is based on COBOL and does not work with cloud technology. PUA (Pandemic Unemployment Assistance) applications are processed in a separate cloud-based system that is provided under a contract with Deloitte Consulting. More than $ 332 million in fraudulent overpayments have been reported between the two systems, of which $ 330 million came from PUA claims.
Although the state is conducting fraud reviews and audits in both systems, private sector experts said more could be done to protect Ohioans’ data and drastically reduce fraud. Haywood Talcove, LexisNexis Risk Solutions government chief executive officer, works with public and private organizations on risk aversion and fraud prevention. According to Talcove, fraud prevention technology already exists in banking and online retail.
“The key to this, and every state that has to do this, is a front-end filter for identity fraud. It is inexpensive,” said Talcove, whose company offers such solutions to government and private organizations. “It’s quick and allows citizens to get their benefits really quickly.”
Front-end identity filters use public record information to validate users in real time. They are widely used when purchasing items online or doing online transactions with financial institutions. Haywood estimates that states that implemented the technology could have saved about $ 100 billion in cross-border financial fraud.
“I don’t think they ever expected unemployment to rise from 3.5% to 15% in less than a week,” said Talcove, who estimates that the implementation of the identity verification technology will cost about US $ 1 million. Would cost dollars. “And that’s why they didn’t necessarily use those tools that citizens are used to when you go to Amazon and make a purchase, or when you go to your bank and try to transfer money or see what your balance is . “
The state said Thursday that initial unemployment claims fell slightly last week. But continued unemployment claims, still a more accurate indicator of the strength of the economy, rose.
This week the state paid nearly $ 100 million in unemployment to more than 110,000 people and residents received unemployment benefits they owe from federal aid approved in late 2020, DeWine said.
“That means some extended weeks of performance plus an additional $ 300 per week that was included in a new federal bill signed in December,” DeWine said.
As of February 6, more than 155,000 Ohioans will receive funding from the latest unemployment package, DeWine said.
By the end of February, all residents can expect to receive the benefits they owe, the governor said.
Pete Grieve and Orie Givens contributed to this report.