Guiding the Digital Evolution of Unemployment Insurance Systems

States have established their unemployment insurance (UI) systems through various methods.

April 9, 2022
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Sidhartha Meka

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The pandemic revealed the shortcomings of UI systems, leading states to implement short-term fixes. Although these fixes have been helpful, they cannot handle the constantly changing and expanding scale and scope of the program.

This paper presents a novel method for states to construct a UI system that is fully digital, robust, and suitable for future use.

For almost two decades, states have been upgrading their unemployment insurance (UI) systems by incorporating various changes in taxes, benefits, appeals, call center, and workforce systems. The majority of these UI systems have been developed through the integration of transfer systems from other states, modifications of revenue tax or pension systems, or by converting older client/server technologies into cloud-based systems that are accessible through the web.

The COVID-19 pandemic highlighted the deficiencies of the unemployment insurance (UI) systems. From portal access problems, overreliance on manual procedures, late payments, and infrastructure failures to fraud, waste, and abuse, most of the UI systems crumbled under the sudden surge in claims due to the pandemic. It is evident that the current solutions and efforts to modernize the UI systems have been insufficient.

Key characteristics of truly digital and resilient UI systems 

Scalability to handle increased volumes is not solely dependent on infrastructure, but also encompasses various other aspects such as software design, screen functionality, data storage and retrieval methods, triage of customer requests, routing policies for workflow, and engagement protocols with businesses. These elements are just as crucial to scalability as infrastructure.

The National Employment Law Project report concluded that the failure of UI systems is a result of various factors, including infrastructure, technology, design, and processes. All of these elements are inefficient and consume staff time, negatively affecting the user experience.

Scalability is a key aspect of modern UI systems, as it allows for the system to grow and evolve alongside the needs of the state and its citizens. This means that the system must be able to accommodate increased caseloads, data management requirements, and infrastructure upgrades. AI-based technologies can also help streamline the adjudication process and improve workflow routing.

Conversational AI-based virtual assistants can provide an additional layer of support for customers, triaging their queries and addressing their needs. This enhances the overall customer experience and reduces the workload for human representatives.

Agility is also crucial for modern UI systems, as changing rules and compliance requirements require a system that can adapt and evolve quickly. 

A human-centric design with an intuitive UI and predictive guided data entry processes can make the system more user-friendly and accessible for everyone.

Multi-lingual support and accessibility standards compliance are also important considerations for modern UI systems, as it ensures that everyone has access to the resources they need. Automation can also help accelerate processes like data management, freeing up time for other tasks.

Finally, a modern UI system should be device-agnostic and available 24X7, making it more accessible and convenient for users. A dedicated and experienced UI team leveraging proven delivery models can also ensure that the system is reliable, efficient, and effective.

Tackling just symptoms won't resolve underlying UI issues, but full digitization of UI systems using a commercially-ready, SaaS solution built on PaaS and delivered by experts will. This approach allows for scalability and agility with a modern, modular architecture utilizing APIs and microservices for quick expansion, providing optimal performance and customer service by integrating new and legacy processing options.

The modular modern architecture will enable states to implement major functions like tax, appeals, and workforce incrementally, with no loss of efficiency. This solution has been adopted by states to modernize their unemployment insurance systems over the past two decades, covering areas such as tax, benefits, appeals, call center, and workforce. These systems have been constructed through transferring systems from other states, adapting revenue tax or pension systems, or updating older client/server technologies and moving them to a cloud environment.

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