NYS Unemployment Insurance (UI) Direct Payment (Debit) Card Program Plans/Lessons Learned 12/5/06 National Association of ...
RFP/Initial Plans: <ul><li>After 2 year effort, first ever RFP for NYS UI Benefit Banking services (traditional checking a...
Major service improvements that Department of Labor and our Partners envisioned receiving with RFP: <ul><li>Electronic Ban...
Need For Electronic Banking : <ul><li>Problems associated with printing and  issuance of 10M to 14M weekly paper  benefit ...
<ul><li>The Key:  A system less dependent on, and substantially free of, paper checks as soon as feasible.  </li></ul><ul>...
<ul><li>Knew that critical to providing electronic benefit services to our customers would be: 1)  Bank customer service-o...
<ul><li>Visa/ MasterCard logo=wide  acceptance. </li></ul><ul><li>RFP’s Plan: provide secure access to  benefits through  ...
Among RFP Requirements: <ul><li>Bank must deal directly with claimants regarding: </li></ul><ul><li>1)  Issuance of cards ...
<ul><li>Desirable:  Up to 3 ATM withdrawals/  week + balance inquiries at ATMs  at no cost, on a 24 hour/7 day a  week acc...
<ul><li>Method for transferring customer calls  under State’s jurisdiction from  bank’s Customer Call Center to  DOL Call ...
<ul><li>We received better than we imagined –  </li></ul><ul><li>JPMC: Outstanding in its proposal --and  continues to be ...
<ul><li>Lessons Learned: </li></ul><ul><li>***  Don’t underestimate State IT systems requirements!_ -  Thorough  understan...
<ul><ul><li>TEST – TEST – TEST BEFOREHAND! </li></ul></ul><ul><li>Know other resource limitations.   This  includes all re...
<ul><li>Establish  contacts with States already doing electronic  payments--cards and DD as much as you can. -  Proved inv...
<ul><li>-  Assess your own needed levels  of  service to agency and customers (free  ATM withdrawals, over the counter  wi...
<ul><li>Ensure Outreach to All Needed: </li></ul><ul><li>1)  All relevant Departments/ Divisions   are part of developing ...
<ul><li>2)  All  Partner Agencies  are involved to   maximum amount needed (partners with  responsibilities for deposits, ...
<ul><li>--How will this affect processes? </li></ul><ul><li>--Provide input and buy-in early. </li></ul><ul><li>3)  Plan  ...
<ul><li>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- </li></ul><ul><li>  o  NYS surveyed 5,000 claim...
<ul><li>Procurement Pitfalls: </li></ul><ul><li>-  Research on banking industry: balance  finding out about standards in t...
<ul><li>Ensure Understanding of Electronic Banking World: -  Culture change  for staff and   customers (may be more of an ...
<ul><li>-  ACH transmittals:   </li></ul><ul><li>  -- Formatting of ACH payments; </li></ul><ul><li>  -- Storage of accoun...
<ul><li>Steer clear of dealing with claimants regarding:   -  Individual card balances, -  Individual swipe questions, -  ...
<ul><li>How has EBT Changed our Cash Management and Other Activities? </li></ul><ul><li>( Negatives): </li></ul><ul><li>a)...
<ul><li>Positives:  </li></ul><ul><li>1)   Better Management of State Funds/  ‘Just-In-Time’ Funding of Accounts:   Fundin...
<ul><li>2)  Reduced State administrative Costs . </li></ul><ul><li>3)  Faster access to $$ for claimants:   NYSDOL claiman...
Results of Efforts: <ul><li>We’ve entered the electronic age with  outstanding partners   (JPMC + State Treasurer and her ...
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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

  1. 1. NYS Unemployment Insurance (UI) Direct Payment (Debit) Card Program Plans/Lessons Learned 12/5/06 National Association of State Treasurers
  2. 2. RFP/Initial Plans: <ul><li>After 2 year effort, first ever RFP for NYS UI Benefit Banking services (traditional checking and electronic benefits) was issued July 05; </li></ul><ul><li>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). </li></ul>
  3. 3. Major service improvements that Department of Labor and our Partners envisioned receiving with RFP: <ul><li>Electronic Banking (Direct Deposit/Debit Cards) for weekly benefit distribution. </li></ul><ul><li>Lockbox (or alternative) service for receipt of claimant reimbursements to State for overpayment of benefits. </li></ul>
  4. 4. Need For Electronic Banking : <ul><li>Problems associated with printing and issuance of 10M to 14M weekly paper benefit checks/year. </li></ul><ul><li>Cost savings: </li></ul><ul><li>- Staff time associated with lost and replacement checks, taking forgery-related calls & affidavits; - Bank fees for check stock and check processing; </li></ul><ul><li>- Internal printing and mailing costs; </li></ul><ul><li>- Need to safeguard check stock ; </li></ul><ul><li>- Printing equipment failures and delays. </li></ul>
  5. 5. <ul><li>The Key: A system less dependent on, and substantially free of, paper checks as soon as feasible. </li></ul><ul><li>Two mechanisms Per RFP: </li></ul><ul><ul><li>1) Initial distribution of, and subsequent weekly replenishments to, ‘virtual bank accounts’ for those customers opting to utilize debit cards instead of direct deposit. </li></ul></ul><ul><li>- 2) Claimant customers’ personal checking accounts via direct deposit. </li></ul>
  6. 6. <ul><li>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; </li></ul><ul><ul><ul><li>..for up-to-date debit card-related information to customers (current balances, weekly replenishments and other card related information). </li></ul></ul></ul>
  7. 7. <ul><li>Visa/ MasterCard logo=wide acceptance. </li></ul><ul><li>RFP’s Plan: provide secure access to benefits through optional weekly electronic ‘replenishments’ of individual claimant benefit payments. </li></ul><ul><li>With this RFP: NYSDOL was at the forefront of NYS state agencies + most state level Departments of Labor across the country. </li></ul>
  8. 8. Among RFP Requirements: <ul><li>Bank must deal directly with claimants regarding: </li></ul><ul><li>1) Issuance of cards and replacement cards, 2) PIN changes, withdrawals, account balances, 3) Fraudulent use of cards, account overdrafts, etc. </li></ul><ul><li>Minimum: (1) Surcharge-free Automated Teller Machine (ATM) withdrawal of cash per weekly replenishment . </li></ul>
  9. 9. <ul><li>Desirable: Up to 3 ATM withdrawals/ week + balance inquiries at ATMs at no cost, on a 24 hour/7 day a week accessibility basis. </li></ul><ul><li>Wide network of ATM/ POS access . </li></ul><ul><li>Claimants not overdraw their debit card accounts (while not an overpayment on our books – still not encouraged). </li></ul><ul><li>Assist State: Informational and marketing materials for customers, and in training of State staff. </li></ul>
  10. 10. <ul><li>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 . </li></ul><ul><li>--------------------- </li></ul><ul><li>Received 4 bank proposals-- award made 12/05 after lengthy multi-agency proposal review and scoring process; </li></ul>
  11. 11. <ul><li>We received better than we imagined – </li></ul><ul><li>JPMC: Outstanding in its proposal --and continues to be extremely responsive to us and our customers. Finalized contract with JPMC in Summer of 2006; </li></ul><ul><li>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; </li></ul><ul><li>Currently looking to implement direct deposit as an option (via web enrollment) early in 2007 for new claims and weekly certification payments. </li></ul>
  12. 12. <ul><li>Lessons Learned: </li></ul><ul><li>*** 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. </li></ul><ul><li>- Know other touch points in mainframe/ legacy systems affected by this change (such as child support payments, charge back of benefits to employers, codings). </li></ul>
  13. 13. <ul><ul><li>TEST – TEST – TEST BEFOREHAND! </li></ul></ul><ul><li>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. </li></ul><ul><li>Utilize Formal Project Management Experience: </li></ul><ul><li>--Maintain open communication between all parties involved. Make potential problems known to all. </li></ul>
  14. 14. <ul><li>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. </li></ul>
  15. 15. <ul><li>- 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. </li></ul>
  16. 16. <ul><li>Ensure Outreach to All Needed: </li></ul><ul><li>1) All relevant Departments/ Divisions are part of developing RFP, & in reviews of RFP responses and planning discussions-not just ‘Program area’. </li></ul><ul><li>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. </li></ul>
  17. 17. <ul><li>2) All Partner Agencies are involved to maximum amount needed (partners with responsibilities for deposits, reconciliations, disbursements, auditing all payments): </li></ul><ul><li>NYS: Joint Custodians Of UI Accounts: </li></ul><ul><li>o Treasury- Major partner in daily UI benefit payment operations— responsible for deposits, disbursements and reconciliations . </li></ul><ul><li>o State Comptroller’s Office- Audits of payments. </li></ul><ul><li> </li></ul>
  18. 18. <ul><li>--How will this affect processes? </li></ul><ul><li>--Provide input and buy-in early. </li></ul><ul><li>3) Plan Marketing and other outreach early: </li></ul><ul><li>-- 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. </li></ul>
  19. 19. <ul><li>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- </li></ul><ul><li> o NYS surveyed 5,000 claimants: </li></ul><ul><li>-- Huge interest in EBT; </li></ul><ul><li>-- Some unfamiliarity with cards for government programs. </li></ul><ul><li> o Provided valuable feedback early on (check stubs, other concerns). </li></ul><ul><li> </li></ul><ul><li>o Customer service is taken into account (advocacy groups, unions, media) . </li></ul>
  20. 20. <ul><li>Procurement Pitfalls: </li></ul><ul><li>- 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. </li></ul>
  21. 21. <ul><li>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. </li></ul>
  22. 22. <ul><li>- ACH transmittals: </li></ul><ul><li> -- Formatting of ACH payments; </li></ul><ul><li> -- Storage of account information (direct deposit)- -- No longer have paid files returned to agency. - Investigations & Fraud issues: </li></ul><ul><li> 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 . </li></ul>
  23. 23. <ul><li>Steer clear of dealing with claimants regarding: - Individual card balances, - Individual swipe questions, - PINs, lost card— let bank do these – customer-focused bank critical. </li></ul><ul><li>- Fraudulent use of cards is primarily bank issue--but be advised for possible UI fraud investigations. </li></ul><ul><li>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. </li></ul>
  24. 24. <ul><li>How has EBT Changed our Cash Management and Other Activities? </li></ul><ul><li>( Negatives): </li></ul><ul><li>a) Loss of Float: </li></ul><ul><li>- Interest on balance before checks cleared. </li></ul><ul><li>b) Loss of Escheatment: - Written off after 74 days & returned to UI Trust Fund. - Return of unused funds not possible in EBT environment. </li></ul>
  25. 25. <ul><li>Positives: </li></ul><ul><li>1) Better Management of State Funds/ ‘Just-In-Time’ Funding of Accounts: Funding transfers/electronic disbursement: </li></ul>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
  26. 26. <ul><li>2) Reduced State administrative Costs . </li></ul><ul><li>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 . </li></ul>
  27. 27. Results of Efforts: <ul><li>We’ve entered the electronic age with outstanding partners (JPMC + State Treasurer and her staff).— </li></ul><ul><li>Both provided advice, outstanding services and assistance to NYSDOL in countless ways. </li></ul><ul><li>Both were patient with us, too, as we learned (and continue to learn) in the process. </li></ul><ul><li>We’re jointly better meeting customers’ rising expectations, and have improved our services, efficiencies and processes as well. </li></ul>

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