POLITICS

How to fix Ohio's unemployment compensation woes: ID checks? Million-dollar fraud contracts?

Jessie Balmert
Cincinnati Enquirer

COLUMBUS – Ohio has an unemployment compensation fraud problem. 

Since mid-January, more than 182,000 Ohioans, including Gov. Mike DeWine and Lt. Gov. Jon Husted, reported identity theft and fraud related to unemployment compensation claims, according to the Ohio Department of Job and Family Services.

At one point, half of the unemployment claims for Ohio's self-employed and part-time workers were being flagged for fraud: more than 796,000 claims. Last year, Ohio paid at least $330 million in fraudulent claims

Meanwhile, Ohioans desperately seeking assistance are struggling to access that money, caught up in a bureaucratic mess. 

What is Ohio doing to fix the problem?

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For one, the state doling out millions to private companies to fix its woes. Ohio Department of Job and Family Services recently signed contracts with IBM, Experian and LexisNexis worth $12.7 million collectively. 

Experian, which will receive $8.6 million over six years, and LexisNexis, which will receive $2 million, will focus on fraud detection and security for traditional unemployment and the new pandemic unemployment assistance. IBM's $2.1 million contract is to improve claims processing.

Ohio lawmakers are pitching other ideas. Sen. Bill Reineke, R-Tiffin, introduced Senate Bill 116 to require anyone seeking unemployment benefits to provide proof of their identity, either a driver's license or two other documents, such as a birth certificate, social security card or tax form.

Unemployment compensation fraud is a problem in Ohio. But what solutions are being proposed?

The Department of Job and Family Services would decide how to review those documents and where, Reineke said. 

"As an employer, I was receiving comments from my employees who were obviously still employed," Reineke said. "They were concerned about their identities being stolen and used for fraudulent purposes."

Nearly all of Ohio's unemployment application process is done either online or over the phone. Many public buildings are still closed because of the COVID-19 pandemic, said Lisa Hamler-Fugitt, executive director of the Ohio Association of Foodbanks. 

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"Do they even understand how the system works?" Hamler-Fugitt asked. "Where are people supposed to take their information?"

Another anti-fraud proposal from Sen. Tim Schaffer, R-Lancaster, would check unemployment claims against other state databases, such as new hire filings, prison records and death certificates, to ensure only those in need receive benefits. 

Senate Bill 17 would also run Medicaid and Supplemental Nutrition Assistance Program, previously known as food stamps, applications through those same systems. That has advocates for Ohio's neediest citizens worried that legislators are making it more difficult to access needed food. 

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Meanwhile, a newly created panel called the Unemployment Compensation Modernization and Improvement Council is digging into why Ohio's unemployment system isn't working for everyone.

Between new contracts and new legislative proposals, a lot of people are working on possible solutions. It's not clear whether everyone is talking to one another, Hamler-Fugitt said. "We need to unravel the mess."

Reineke, who is part of that panel, said it makes sense to tackle Ohio's unemployment problems from multiple angles: "It’s a huge issue and it’s a lot of money."