On July 10, 2024, the Chair and ranking member of the US Senate Committee on Finance, Senators Wyden (D-OR) and Crapo (R-ID), introduced bi-partisan legislation, the Unemployment Insurance Integrity and Accessibility Act. The committee press release with links to the section-by-section summary and legislative language is shown below.

The bill extends the period during which civil and criminal actions may be brought through court action to prosecute fraud and recover overpaid benefit amounts. It also includes provisions designed to better enable accessibility to benefits for claimants and expanded waiver of benefit overpayments authority for states. US DOL previously provided an interpretation of the CARES Act overpayment waiver provisions that sought to expand state authority to waive overpayments. UWC provided a review of the Interpretation provided in UI PL 20-21 Chan.

Our initial observation of the new statutory proposal is that it will be difficult to administer new waiver provisions related to the CARES Act years after pandemic related claims determinations have been made in 2020 and 2021. The extension of the period in which to bring court action to prosecute fraud and impose civil penalties is needed given the large amounts of fraud and theft during the pandemic emergency period. Criminal prosecutions in some cases require more time to develop the evidence necessary to proceed.

In most cases, however, claims determinations have become final, and overpayment amounts may already have been waived based on the previous UI – PL and CARES Act agreements between states and US DOL. In some states, overpayment amounts may already have been written off as uncollectible.

An analysis is needed to address how the new statutory language would be applied on top of the CARES Act, UI PLs, and the agreement under which states were obligated to administer the CARES Act and related pandemic programs. There may also be an impact with respect to charges to reimbursing employer accounts and contributing employer contribution rates, if waiver provisions reduce the recovery of overpayment amounts or change charges to employer accounts.

In some cases, claims information from 2020 and 2021 may no longer be available for review. Also, audits of benefit payments under the prior law may already be in progress.

A simple extension of authority to proceed with criminal and civil prosecutions along with enactment of HR 1163 or S 1587 would avoid much of the administrative complexity. To the extent there is a need to address waiver of overpayments, it should be clear that the application of the new statutory requirements would be prospective only.

As introduced, the administration of the new waiver provisions would likely reduce the overpaid benefit amounts recovered, negatively impact state unemployment Insurance trust funds, and there would be additional unfunded administrative expense for state UI agencies, employers, and their representatives.

We are reviewing the details of the legislative language to assist in finalizing bi-partisan agreement later this year.