Senate Bill Would Spend $500M to Improve State Unemployment Insurance Tech

Sen. Ron Wyden, D-Ore., introduced new legislation on Feb. 10 that would provide $500 million of Federal funding to help states deploy new technologies to improve performance of their unemployment insurance systems – many of which have had trouble dealing with higher demand during the coronavirus pandemic.

“For the past year, states with outdated technology have struggled to distribute jobless benefits,” Sen. Wyden tweeted on Feb. 10. “This crisis has highlighted the urgent need to bring this technology into the 21^st century. Today, I’m introducing legislation to do just that.”

The Unemployment Insurance Technology Modernization Act of 2021 introduced with Sens. Sherrod Brown, D-Ohio, Catherine Cortez Masto, D-Nev., and Mark Warner, D-VA., would require the development, operation, and maintenance of “a modular set of technology capabilities to modernize the delivery of unemployment compensation.”

The legislation states that the modernized technologies must incorporate a modular open systems approach, while including modular components for each function necessary to administer an unemployment compensation program. The tech must be able to accomplish the following:

• Receive, process, and pay claims for unemployment compensation;
• Comply with cybersecurity and privacy best practices and standards, including consulting with the directors of the National Institute of Standards and Technology and Cybersecurity and Infrastructure Security Agency on digital identity proofing services;
• Prioritize end-to-end user experience for claimants, employers, and administrators of unemployment compensation;
• Include centralized Federal technology capabilities allowing for storage, exposure, and exchange of data required by states to administer unemployment compensation;
• Provide states with the option to only use some of the modular components of the Federal technology capabilities while still using state database storage, if those databases meet guidelines enabling machine-to-machine interfaces to facilitate communication among states and between the states and Federal government;
• Allow states to easily adapt modular components to the Federal technology capabilities to meet their unemployment compensation programs requirements;
• Ensure timely and accurate payment of unemployment compensation, and include measures to minimize fraudulent claims; and
• Be available to support other interagency and intergovernmental activities where it is practical.