New Developments in Unemployment Insurance Modernization

Recap and Replay of Event Hosted by the UI Technology Coordinating Coalition

The UI Technology Coordinating Coalition, part of the Digital Benefits Network at the Beeck Center for Social Impact + Innovation at Georgetown University, hosted a virtual conversation on April 13, 2023 focused on recent developments in unemployment insurance (UI) modernization efforts. 

The American Rescue Plan Act (ARPA) appropriated $2 billion to improve timeliness, increase equity, and prevent fraud in the UI system by offering grants to states to modernize their UI systems and for developing shared services and systems for use across the nation. The U.S. Department of Labor (DOL) established the new Office of UI Modernization (OUIM) to administer those funds and help states adopt improved technology practices. For the conversation, Andrew Stettner, the Deputy Director for Policy and Larry Bafundo, the Deputy Director for Technology of OUIM joined to discuss their efforts and progress in advancing UI technology modernization. In addition, Jennifer L. Phillips, the Assistant Deputy Director of Service Delivery at the Illinois Department of Employment Security (IDES) joined to discuss updates to their UI system. The call was moderated by Adam Bobrow and Marcus Courtney, co-convenors of the UI Technology Coordinating Coalition. 

With panelists from the state and federal government, attendees were able to hear first-hand from people who are working to implement modernization efforts, including insights they’ve uncovered. We have included edited highlights from the conversation below. Please watch the recording for a full playback.

What is OUIM’s policy vision? How have they already allocated the $2 billion from ARPA, and how do they plan on using the rest? 

Stettner emphasized that they are focused on making technology updates towards building a system that will be more resilient to the next economic downturn. The goal of distributing the funds is to address three pillars of UI modernization: the timeliness of benefits, equity in delivery, and integrity and fraud prevention.  

By June 2023, $1.6 billion of the funds will have been deployed: $340 million will go towards fraud prevention detection and recovery; $250 million towards an equity grant initiative spurring states to do equity data analysis; $246 million has gone towards a Tiger Team grant initiative, such as improving the online experience and mapping customer journeys with state agencies; and $18 million for a navigator program operating in seven states to meet workers where they are. Another $200 million grant program coming out in several weeks will focus on what good looks like in identity verification, including other forms of recommended and required fraud prevention strategies; and a $600 million investment that has been set aside for IT modernization. 

What is OUIM’s technology vision? 

Bafundo emphasized that OUIM is focused on enabling a UI system that not only works for the people that it was designed for, but is also more resilient and responsive to changing needs. This means that our work is not just about replacing legacy technology; it’s also focused on helping states adopt new ways of working, such as agile software development and procurement practices, modular system design, and modern tools and infrastructure that enable states to adopt a continual approach to modernization and which lower the cost of IT systems change.

The reality is that this is a long-term effort that requires sustained investment in the UI system beyond OUIM, and so we need to think about this work in the context of a “relay race”, where ARPA helps establish a foundation for a broader ecosystem of actors to work towards this vision and identify and share best practices along the way. 

That being said, Bafundo outlined 5 key areas related to technology that their office is focused on:  

  1. Customer experience (CX) While many states are already working to improve their customer experiences, CX is not yet a defined aspect of the UI program. As a result, the OUIM team is working to define guiding principles, approaches, and metrics for states to look to as they evolve their IT systems, with a focus on enabling greater self-service and minimizing the need for manual state intervention, on top of ensuring that multiple pathways to service, including digital and non-digital channels, exist to equitable access to benefits. As part of this area, OUIM is also working with states to help them better leverage data and feedback from claimants to drive insights and IT modernization strategy. 
  2. Plain language  The UI system is inherently complex and rules vary across states. At the same time, a significant percentage of errors and improper payments could be attributed to people not understanding the materials they need to navigate the program. OUIM is helping states adopt plain language techniques to simplify complexity, starting with common forms and notices. OUIM is also making centrally-provided resources available so that states and other groups can leverage in building their communications. 
  3. Emerging technology  OUIM is working to help states adopt tools, like robotic process automation and chatbots to streamline workflows and create efficiencies that improve accuracy and timeliness. 
  4. Flexible technology  As described earlier, a key constraint states face in modernizing is inflexibility of their IT systems, where even simple changes can be prohibitively costly and risky to make. As a result of this, OUIM is helping states improve the modularity of their system architecture so that various components can be managed more easily, expand the use of APIs, and adopt open source technology to lower the need for custom software development. 
  5. Effective ID verification OUIM wants to help states acquire effective ID verification solutions that protect against fraud while also ensuring equitable access. As part of this, OUIM is offering access to both in-person and remote ID proofing and is working with states to leverage data, better understanding how these tools affect different demographics. As part of the new grant program, they plan to develop new partnerships with public options for identity verification, such as the General Services Administration’s (GSA), and offering in-person identity verification at post offices. 

How has the help from OUIM been helpful for Illinois?

Sharing the state perspective, Phillips spoke about how OUIM best practice and technical assistance resources have been “instantly illuminating” for Illinois. OUIM has boosted IDES’ capacity for customer experience analyses. During the COVID-19 pandemic from April 2020 to April 2022, Illinois set up an pop-up survey including open-ended questions on the UI application that received over 75,000 voluntary responses. They did not have the internal capacity to analyze the data, but within weeks, OUIM was able to successfully analyze the data, helping IDES create better questions, methodologies, and a high-level observational analysis. 

With the information, the IDES team has been able to pinpoint where to implement changes within the benefit information system. OUIM is helping Illinois learn how to build customer experience analysis into its work, improving claimant access and experience. 

Looking Ahead

Bafundo concluded with five types of support OUIM is providing for states: 

  1. Reusable and tangible technology solutions. For example, NJ is launching a new claims intake experience this summer that leverages best practices in form design and in partnership with the DOL, while making it available as an open-source component.
  2. The UI Lexicon Project: a glossary of terms common in the UI space, written in plain language, that states and other groups can use in the development of more effective, claimant-facing communications.  
  3. Establishing guiding principles, approaches, and measures to help states improve their customer experiences (CX) and providing states with hands-on assistance to improve towards these goals, including assistance with user research and testing and improving the mobile responsiveness of claimant portals.
  4. Creating useful resources, such as the claim status playbook and other models, or reference implementations, that states can use as a guide for their own modernization efforts.
  5. Directing services with the $600 million OUIM plans to invest into the UI system in order to reduce costs for IT system changes.  

Brief Q&A Summary and Ending Remarks

During the Q&A session, the panelists used the remaining time allocated towards questions posed by the audience. The questions and answers have been edited for length and clarity.

  • Q: What is the potential for increased UI and employment service staffing to facilitate in-person services?

A (Stettner): With part of the FY23 budget allocated towards UI administration, DOL has reinforced the importance of having multiple methods for ID verification — a digital solution in addition to an in-person solution, especially for those who may have trouble using technology. 

  •  Q: What have been the most helpful tools or software panelists have leveraged to modernize their UI systems or have seen others use effectively?

A (Phillips): IDES is leaning into all the OUIM resources because states don’t have time to gather and synthesize best practices the same way DOL can.

Additionally, we partnered with the Illinois Department of Innovation and Technology (DoIT) to create ILogin, similar to Integrated in September 2021, this multi-factor, identity proofing system is like a gate before accessing the UI claim application. However, the intention is for additional State of Illinois departments to utilize ILogin so that claimants only need to complete the process once and then use it across other State of Illinois applications. The next state agencies to come onto the system are the Department of Human Services (IDHS) and Department of Revenue (IDOR).

  • Q: What type of role private vendors should play in UI and IT modernization efforts versus developing systems and expertise within agencies?

A (Bafundo): It’s important that states have some layer of in-house technology expertise. For those in service delivery, it’s crucial for people to have a sense of what the technical capabilities are needed to successfully implement services.  

A (Phillips): Illinois believes that vendors are essential but should be used to help build state capacity and for joint learning not just coming in to problem-solve; it’s a both/and approach. 

  • Q: How is OUIM planning to use the $600M towards IT modernization, and how can we track and take advantage of it?

A (Bafundo): We want states to incentivize API-driven approaches and work towards measurable outcomes. To follow our work, go onto the Office of UI Modernization website. We want to help you generate outcomes and if you need help using tangible technology solutions, we’ll help or propose an alternative.

Phillips shared that Illinois’s partnership with DOL has been helpful; they are leaning on resources from their partner organizations across the country, within their state, DOL regional meetings, and peer-to-peer with other states to better this work. Stettner and Bafundo hope that various groups working with UI modernization will take advantage of the resources that they provide, build it into systems, and share any learnings or observations with those in the space. 

For detailed panelist bios, resources, and links shared by the audience during the virtual conversation, check out this resource document.

The Unemployment Insurance Technology Coordinating Coalition is a community of practice of the Digital Benefits Network of the Beeck Center for Social Impact + Innovation at Georgetown University that engages cross-sector practitioners, including states, legal advocates, labor unions, technologists, think tanks, and other nonprofits through bi-weekly calls, annual convenings, closed-door sessions, research, and technical assistance in order to improve the technology delivery of the UI system. Subscribe to our  UI Quarterly Research Round Up and monthly Digital Benefits Digest newsletter. You can get in touch with us at