Nys Unemployment Insurance (Ui) Direct Payment (Debit) Card Program
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Nys Unemployment Insurance (Ui) Direct Payment (Debit) Card Program

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Nys Unemployment Insurance (Ui) Direct Payment (Debit) Card Program Nys Unemployment Insurance (Ui) Direct Payment (Debit) Card Program Presentation Transcript

  • NYS Unemployment Insurance (UI) Direct Payment (Debit) Card Program Plans/Lessons Learned 12/5/06 National Association of State Treasurers
  • RFP/Initial Plans:
    • After 2 year effort, first ever RFP for NYS UI Benefit Banking services (traditional checking and electronic benefits) was issued July 05;
    • RFP contained plan for initially changing over to new bank for checks, working with the State to implement debit cards and direct deposits as State was ready (Plan: multi-year, phased changeover to EBT).
  • Major service improvements that Department of Labor and our Partners envisioned receiving with RFP:
    • Electronic Banking (Direct Deposit/Debit Cards) for weekly benefit distribution.
    • Lockbox (or alternative) service for receipt of claimant reimbursements to State for overpayment of benefits.
  • Need For Electronic Banking :
    • Problems associated with printing and issuance of 10M to 14M weekly paper benefit checks/year.
    • Cost savings:
    • - Staff time associated with lost and replacement checks, taking forgery-related calls & affidavits; - Bank fees for check stock and check processing;
    • - Internal printing and mailing costs;
    • - Need to safeguard check stock ;
    • - Printing equipment failures and delays.
    • The Key: A system less dependent on, and substantially free of, paper checks as soon as feasible.
    • Two mechanisms Per RFP:
      • 1) Initial distribution of, and subsequent weekly replenishments to, ‘virtual bank accounts’ for those customers opting to utilize debit cards instead of direct deposit.
    • - 2) Claimant customers’ personal checking accounts via direct deposit.
    • Knew that critical to providing electronic benefit services to our customers would be: 1) Bank customer service-oriented Call Center; 2) Bank Interactive Voice Response (IVR) system; 3) Bank website;
        • ..for up-to-date debit card-related information to customers (current balances, weekly replenishments and other card related information).
    • Visa/ MasterCard logo=wide acceptance.
    • RFP’s Plan: provide secure access to benefits through optional weekly electronic ‘replenishments’ of individual claimant benefit payments.
    • With this RFP: NYSDOL was at the forefront of NYS state agencies + most state level Departments of Labor across the country.
  • Among RFP Requirements:
    • Bank must deal directly with claimants regarding:
    • 1) Issuance of cards and replacement cards, 2) PIN changes, withdrawals, account balances, 3) Fraudulent use of cards, account overdrafts, etc.
    • Minimum: (1) Surcharge-free Automated Teller Machine (ATM) withdrawal of cash per weekly replenishment .
    • Desirable: Up to 3 ATM withdrawals/ week + balance inquiries at ATMs at no cost, on a 24 hour/7 day a week accessibility basis.
    • Wide network of ATM/ POS access .
    • Claimants not overdraw their debit card accounts (while not an overpayment on our books – still not encouraged).
    • Assist State: Informational and marketing materials for customers, and in training of State staff.
    • Method for transferring customer calls under State’s jurisdiction from bank’s Customer Call Center to DOL Call Centers (or alternate State offices designated)--seamless and customer service oriented fashion .
    • ---------------------
    • Received 4 bank proposals-- award made 12/05 after lengthy multi-agency proposal review and scoring process;
    • We received better than we imagined –
    • JPMC: Outstanding in its proposal --and continues to be extremely responsive to us and our customers. Finalized contract with JPMC in Summer of 2006;
    • Decision to eliminate checks altogether-- NYSDOL mandated direct payment cards for all claimants as of 9/10/06; required mass conversion of ~ 160,000 claimants that had been receiving checks, and large mailing of cards on part of bank and its subcontractor card vendor;
    • Currently looking to implement direct deposit as an option (via web enrollment) early in 2007 for new claims and weekly certification payments.
    • Lessons Learned:
    • *** Don’t underestimate State IT systems requirements!_ - Thorough understanding of agency programming resources , systems changes needed, and what you’ll need the bank to assist with-- before you finalize the RFP . - Plan around IT resources-vs. catching-up.
    • - Know other touch points in mainframe/ legacy systems affected by this change (such as child support payments, charge back of benefits to employers, codings).
      • TEST – TEST – TEST BEFOREHAND!
    • Know other resource limitations. This includes all relevant staffing (not only quantity of staff but quality of knowledge) in all affected areas and offices as well as equipment, software, etc.
    • Utilize Formal Project Management Experience:
    • --Maintain open communication between all parties involved. Make potential problems known to all.
    • Establish contacts with States already doing electronic payments--cards and DD as much as you can. - Proved invaluable as we reached out to Utah and Oregon as the first 2 states doing cards. - Other states’ RFPs/contacts may be helpful; - With changes in USDOL’s handling of postage and mailing costs--accelerated state efforts are likely.
    • - Assess your own needed levels of service to agency and customers (free ATM withdrawals, over the counter withdrawals ?,…) (Per Interstate Technology Service Center (ITSC) website:) - 11 states now doing debit cards or testing/piloting (another 32 planning). - 23 states doing DD, another 16 planning/developing.
    • Ensure Outreach to All Needed:
    • 1) All relevant Departments/ Divisions are part of developing RFP, & in reviews of RFP responses and planning discussions-not just ‘Program area’.
    • Other offices within just NYSDOL: - Planning Office - Technology Office - Finance Office - Research and Statistics - Communications - Legal – Counsels Office Staff of these offices needed to be familiar with RFP provisions & bank proposals- knowledge not centered with selected staff.
    • 2) All Partner Agencies are involved to maximum amount needed (partners with responsibilities for deposits, reconciliations, disbursements, auditing all payments):
    • NYS: Joint Custodians Of UI Accounts:
    • o Treasury- Major partner in daily UI benefit payment operations— responsible for deposits, disbursements and reconciliations .
    • o State Comptroller’s Office- Audits of payments.
    • --How will this affect processes?
    • --Provide input and buy-in early.
    • 3) Plan Marketing and other outreach early:
    • -- What should the State do – website alerts, check stub announcements, separate mailings, press releases; - Remember the politics--initial discussions with Governor’s Office, outreach to legislature, advocacy groups, unions; - What want bank to provide in terms of marketing & training material.
    • C o n si der a C u s t o m e r I n t e r es t S u r v e y-
    • o NYS surveyed 5,000 claimants:
    • -- Huge interest in EBT;
    • -- Some unfamiliarity with cards for government programs.
    • o Provided valuable feedback early on (check stubs, other concerns).
    • o Customer service is taken into account (advocacy groups, unions, media) .
    • Procurement Pitfalls:
    • - Research on banking industry: balance finding out about standards in the industry vs. making outreach to banks that may be bidders; - RFP Requirements vs. ‘Nice to Have’s’--can make or break proposals; - Allowable flexibility in scoring, asking follow up questions of entities responding to RFP, fine-tuning plans after award is made, etc. - Some states more restrictive than others- NYS has lobbying laws, procurement laws.
    • Ensure Understanding of Electronic Banking World: - Culture change for staff and customers (may be more of an issue for staff than customers!) - RFP terminology must be precise: for example, ‘surcharges’ vs. ‘transaction fees’, EReg, NACHA standards, - What are standards in the industry in terms of bank holds on accounts, minimum/ maximum withdrawals, etc.
    • - ACH transmittals:
    • -- Formatting of ACH payments;
    • -- Storage of account information (direct deposit)- -- No longer have paid files returned to agency. - Investigations & Fraud issues:
    • o No more endorsed checks; o Patriot Act/Know your Customer ID issues o Discuss what information should be forthcoming from bank without subpoenas. o Claimant swipes issues confidential .
    • Steer clear of dealing with claimants regarding: - Individual card balances, - Individual swipe questions, - PINs, lost card— let bank do these – customer-focused bank critical.
    • - Fraudulent use of cards is primarily bank issue--but be advised for possible UI fraud investigations.
    • Nuances of Your Specific Contract: - May contain relatively new service from viewpoint of bank (and other banks) staff; - Card Customer Call Center staff may not always be special dedicated staff.
    • How has EBT Changed our Cash Management and Other Activities?
    • ( Negatives):
    • a) Loss of Float:
    • - Interest on balance before checks cleared.
    • b) Loss of Escheatment: - Written off after 74 days & returned to UI Trust Fund. - Return of unused funds not possible in EBT environment.
    • Positives:
    • 1) Better Management of State Funds/ ‘Just-In-Time’ Funding of Accounts: Funding transfers/electronic disbursement:
    DOL funds total of disbursement JPMC sends tran pay file to NYSDOL detailing payments initiated to ACH network Direct Deposit funds available to claimant Claimant receives funds by 6:00 a.m. Initiate payment of ACH Network Review by OSC/ Treasury Payment initiated Claimant certifies (Weekly cert-not Orig. claim) Wed a.m. Tuesday Monday Evening to Bank Monday Business Day Monday a.m. Sunday
    • 2) Reduced State administrative Costs .
    • 3) Faster access to $$ for claimants: NYSDOL claimants can, depending on their geographic location in NYS, have access to their funds sooner. Checks were mailed Monday afternoon from Albany – could take 2-3 days to be received in outlying parts of state such as Buffalo. Now all claimants should have access on Tuesday. 4 ) More flexible access to benefits for customers .
  • Results of Efforts:
    • We’ve entered the electronic age with outstanding partners (JPMC + State Treasurer and her staff).—
    • Both provided advice, outstanding services and assistance to NYSDOL in countless ways.
    • Both were patient with us, too, as we learned (and continue to learn) in the process.
    • We’re jointly better meeting customers’ rising expectations, and have improved our services, efficiencies and processes as well.