For Immediate Distribution
UmmelGroup Provides Advisory Support for State Implementation of Electronic UI Payments
(January 1, 2007) In December 2006, UmmelGroup facilitated a business case, including feasibility study, cost/benefit determination, and implementation rollout strategy, on behalf of a state considering electronic disbursement (both Direct Deposit and Debit Card) options for Unemployment Insurance (UI) benefits payments. Through the supporting research, surveys, and discussions with state unemployment insurance agencies across the nation, a clear picture of this process improvement area has been developed:
There are several compelling factors driving states to explore implementation of electronic benefits disbursement in 2008:
- The changing federal stance on eliminating state funding for postage and mailing expenses, beginning Oct 1, 2007.
- Other state experiences and lessons learned regarding electronic disbursement, and specific approaches for offering both direct deposit (to existing customer accounts) and UI debit cards.
- Overall cost/benefit, in tangible dollars, which can be realistically expected to be achieved in the years following rollout of electronic disbursement
- Leading bank vendors participating in the current market space, and analysis of the most attractive contractual agreements which are negotiable today.
- Current vendor contractual mechanisms available to state government which may be leveraged for program startup.
Our survey of states indicate, as of January 1, 2007:
- 24 states currently offer Direct Deposit, 7 states also provide a UI Debit Card option to their claimants.
- Only 2 states, New York and Indiana, have chosen to rollout a UI Debit Card option exclusively, with New York now also planning to add Direct Deposit option due to customer input.
- The majority of the remaining states are considering, planning, or developing both Direct Deposit and UI Debit Card disbursement capabilities.
Starting in federal fiscal year 2008, states who deploy both direct deposit and debit card options for claimants will realize annual tangible (hard dollar) savings of between $250,000 and $1,000,000 per year through the phase-out of paper UI benefit checks. The bulk of this savings is realized through postage savings, elimination of check stock and MICR printing, and overall elimination of labor- intensive paper check handling processes.
UmmelGroup offers specialized EA consulting and mentoring services, customized to your organization’s needs. UmmelGroup associates, collectively, have successfully delivered dozens of successful EA programs for government and private sector organizations around the world. These consulting and strategy services are delivered using innovative approaches to assure customers receive maximum value from their IT investments.
UmmelGroup International, Inc. (www.UmmelGroup.com) is a privately held Kansas corporation offering IT management consulting services for federal/state/local government and private sector organizations around the world since 2002.