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Michigan Lawmakers Propose Unemployment Reform Bills

State lawmakers have proposed seven ways to fix the state’s unemployment system and help claimants receive better aid. But some of the proposals aren’t feasible and others could be too expensive.

(TNS) — Michigan lawmakers want to create a citizen advocate who would help unemployment claimants if they're unable to find meaningful aid through the Unemployment Insurance Agency.

The creation of an unemployment insurance agency ombudsman was one of seven proposals discussed Thursday at the state House Oversight Committee amid an ongoing review of issues at the jobless agency during the pandemic.

Other bills in the reform package would require the agency to submit monthly reports to the ombudsman on determination appeals; shorten the redetermination period to 10 days between when a claim is first filed and when a determination is made on eligibility; and post daily the amount of money in the unemployment trust fund.

Other proposals include a bill that would shorten the time period for redeterminations from three years to one, require the agency to provide administrative law judges all materials on an appealed case, and prohibit the agency from charging for overpayments employers or the Unemployment Compensation Fund, which is funded by employers.

"This is an opportunity to have someone whose focus is navigating a confusing government system," said Rep. Jack O'Malley, the Lake Ann Republican who sponsored the bill to create a citizens' advocate.

"We just need someone who's on the side of the citizens."

Rachael Wineland, a legislative liaison for the Unemployment Insurance Agency, noted several issues with the legislation, including problems with the brevity of timelines for the submission of appeals reports, determination deadlines and review windows.

"Ten business days is not possible given that the UIA has to give businesses 10 days to protest the claims," Wineland said.

Several aspects of the legislation would cost significant amounts of money, Wineland said. She also noted it's unclear how the citizens' advocate program would overlap with the agency's advocate program.

Rep. Steve Johnson, the Wayland Republican who chairs the committee, noted costs were unlikely to exceed what the agency has already determined it overpaid to claimants during the pandemic.

"I would counter that $4 billion — that's costly," Johnson said.

O'Malley challenged Wineland's concerns over the ombudsmen program.

"You talk about (how) you have an advocacy agency," O'Malley said. "I would say that it has failed. So maybe we could take the funding that your agency uses for your advocacy and put it in (this) and then save money."

The discussion regarding the proposed legislation comes two days after a nearly three-hour joint oversight hearing involving the House and Senate that reviewed a Nov. 18 Office of Auditor General report that estimated at least $3.9 billion in overpayments were paid to 347,437 claimants who were later deemed ineligible under state-developed eligibility criteria.

The agency has paid a total of $39 billion in unemployment aid to 3.5 million Michigan residents since March 2020.

The $3.9 billion paid out included those who were granted automatic waivers because of the agency error without going to the trouble of determining whether that individual would actually have been eligible under separate criteria.

So Democratic lawmakers on Tuesday argued those receiving it should be deemed "potentially ineligible." They also noted the error appeared to occur during a good faith effort to get benefits out to people who sorely needed it.

"It seems to me that these people were overwhelmingly people who were eligible but they just checked the wrong box," Sen. Jeff Irwin, D-Ann Arbor, said during Tuesday's hearing.

Auditors said by the letter of the law they were deemed ineligible, but acknowledge they were working to drill down more details about what led to the $3.9 billion total. They said the data was provided by the agency, at times without detailed explanations.

"UIA could not provide an explanation or would not provide an explanation ... that was the response we received most often," said the OAG's chief investigator Bryan Weiler.

Lawmakers from both sides of the aisle grilled agency leadership during the hearing.

Rep. David LaGrand, D- Grand Rapids, said it wasn't enough for the new director, Julia Dale, to say "trust me." The question that needs to be answered, he said, is what exactly has been changed to ensure the issues don't happen again.

"We are in the business of closing a barn door after the horse has bolted," LaGrand said. "There's got to be some better solution than that. It really doesn't do us much good to close the barn door after the horse has bolted."

The agency developed and used for roughly nine months four unapproved eligibility criteria for Pandemic Unemployment Assistance, despite notices from the federal government indicating the criteria were incorrect. In late June — about a year after the agency first received notice of the error — the agency sent out 648,100 notices informing claimants that they had received benefits under the unauthorized criteria and would have to re-attest to other eligibility criteria.

Whitmer's office granted waivers to many of the individuals impacted by the error.

The audit found the agency was unable to explain its rationale for including eligibility requirements with no link to federal guidance or why it didn't fix the issue when the U.S. Department of Labor identified it in June 2020, the audit said.

At that time, in June 2020, the U.S. Department of Labor notified the agency of "urgent" and "critical" issues involving the unauthorized criteria it developed and its failure to require claimants to self-certify their reason for unemployment, according to the audit.

(c)2021 The Detroit News. Distributed by Tribune Content Agency, LLC.


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