Record Overpayments Prompt Penalties for Employers and Their Unemployment Vendors

Springfield MA, March 19, 2013 – Billions in Unemployment Insurance overpayments recorded nationwide, have prompted the Federal Government to mandate state agencies to levy significant penalties on employers and their agents.  In an effort to combat egregious claim processing errors and omissions (resulting in overpayments) effective October 21, 2013, employers and TPA’s must ensure claim response protocols meet new standards associated with timeliness and accuracy.  A single failure to do so, or a pattern of failure, will incur loss of account credits or repayment funds currently provided. States have also been granted the ability to assess monetary and criminal penalties against employers and agents alike. 

Changes in the UI marketplace through consolidation and the elimination of competition between agents, has been associated with declining service standards and response failures to state inquiries.  “When other vendors fail to honor their service level agreements and benefits are incorrectly paid to the magnitude we’ve experienced, we all pay.  For too long, unemployment vendors have flown under the radar blaming the economy or state agencies.  Employer’s aren’t sufficiently educated about what goes on when they entrust their business to an agent, this is unfortunate but not unexpected.” stated Suzanne Murphy, CEO of UTCA.

Employers are urged to analyze their process error and omissions incidence to determine risk factors in preparation for the October 21 implementation date. “If you have not reviewed your process and use a vendor who routinely permits no response claims, late claims and unavailable separation information, you are at risk.  Unemployment agents, not equipped to properly manage their book of business have been migrating costs to employers, unchecked, for years. This law will bring much needed sunshine to a murky industry handling a critical segment of our economy” added Murphy.

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About UTCA

UTCA assists clients in reducing the costs and complexities of managing their unemployment compensation programs, utilizing a unique preemptive approach to managing unemployment costs. Our service program provides unparalleled customer solutions earning us the reputation as the “trusted advisor” in the field of unemployment cost management.