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UIA clean-up bills keep eyes on future, not past

October 24, 2017

Article courtesy of MIRS News Service

Legislation designed to clean up the inner workings of the maligned Unemployment Insurance Agency (UIA) emerged from a bipartisan workgroup Thursday.

The bills scale back the penalties of those who improperly collect UIA benefits and create a quicker system by which the state can slam the brakes on any payments to identity thieves caught trying to scam the system. 

Some Democrats quickly pointed out, however, that the package does not attempt to reimburse those who were falsely accused of fraud through the automated computer system called the Michigan Data Automated System of MiDAS. 

The UIA announced two months ago it would refund $20.8 million to those falsely accused of fraud, which was caused when MiDAS was allowed to auto-adjudicate issues it spotted in UIA cases without human checks.

Around 44,000 were accused of UIA fraud, even though only a fraction actually did anything wrong. 

Making people “whole” was not the purpose of the UIA workgroup. It was how to make a better UIA system — one that creates a fairer process for consumers accused of fraud while giving businesses some safeguards, too. 

The legislative leader of the workgroup, Joe Graves (R-Argentine Twp.), said the group started with a blank white board. Anyone who had a suggested improvement added their ideas. A matrix was developed, a report written and proposals made. 

After 900 hours of work, the workgroup came out with what amounts to eight bills. 

“If you put people in a room, lock the doors and don’t feed them, good things happen,” Graves said. 

Those getting bills include Graves, Reps. Kevin Hertel (D-St. Clair Shores), Wendell Byrd (D-Detroit), Diana Farrington (R-Utica), Beau LaFave (R-Iron Mountain), Joe Bellino (R-Monroe), Phil Phelps (D-Flushing) and Marty Howrylak (R-Troy). 

The bills create a new identity theft verification structure within the UIA that have new checks to verify that those who are applying for unemployment benefits are legit. They create an advocacy program for the accused, stop the UIA from being able to charge interest when the state overpays someone, cuts down on the penalties from 400 percent to 100 percent and create some waivers for economic hardships. 

“We learned through the failure of the MiDAS system how to address claimants’ concerns when they are accused of fraud. We created some great policy that will help individuals work through this process,” Hertel said. 

Steve Gray, the director of the University of Michigan’s Law Unemployment Insurance Clinic, and members of the business community were on hand to support the redo of the UIA’s administrative system. 

The UIA was not at Thursday’s press conference, although a representative was active in the workgroup. The agency isn’t taking a formal position on the bills at this time, but early indications are the UIA will be supportive as long as the U.S. Department of Labor doesn’t have a problem with the proposed changes. 

“We appreciate the efforts of Rep. Graves and his workgroup to strengthen TIA-Unemployment Insurance,” said Wanda Stokes, director of the Talent Investment Agency in a statement. “We share common goals of restoring public trust in the system and improving customer service so we can continue to be a resource for Michigan residents going through a difficult time in their lives. 

“We were pleased to be included in the discussions with lawmakers and stakeholders leading up to these bills, and the efforts will build on the work we already are doing to make TIA-UI more effective. We are glad that we will be partners with the workgroup moving forward.” 

House Minority Leader Sam Singh (D-East Lansing) said he appreciated that the bills will help ensure “this sort of disaster never occurs again,” but he feels the bills fall short in addressing “the wrong already done to families the state has falsely accused of fraud.” 

“Democrats have offered legislation that would make these families whole, address security breaches in the state’s unemployment computer system and restore unemployment benefits to 26 weeks,” Singh said. 

Rep. John Chirkun (D-Roseville), Rep. Bill Soberby (D-Clinton Twp.) and Rep. Tim Sneller (D-Burton) were among those Democrats who put out similar statements.

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