In fiscal year 2011, the UI system paid $117 billion in federal and state UI benefits to 18.7 million beneficiaries. The USDOL estimates that 12 percent of these benefits were paid improperly. Approximately 20 percent of the estimated improper payments are attributable to job separation issues, that is, state determinations concerning the reason why workers are no longer employed. Most states request separation information from employers or their agents via a slow and manual paper-based process through the U.S. Postal Service. Ensuring the state unemployment insurance agency receives accurate and timely information from employers upon request would reduce this type of overpayment.
Responding to paper-based unemployment insurance (UI) information requests fully and within tight deadlines creates a significant and costly administrative burden on companies today, putting a strain on the bottom line. This problem is compounded for employers and third-party administrators (TPAs) with operations in multiple states, since – until recently – no single national standard existed to help states and employers easily and electronically exchange key information about UI claims.
The State Information Data Exchange System (SIDES) is an example of a successful consortium project developed through a strategic partnership between the U.S. Department of Labor (USDOL) and state UI agencies and developed by six states, some large employer/third party administrators (TPAs) and the ITSC. SIDES offers employers and TPAs – free of charge – a secure, electronic and nationally-standardized format in which they can easily respond to UI information requests, attach documentation when needed, and receive a date-stamped confirmation of receipt. Now, employers and TPAs in states implementing the SIDES can adopt an electronic standardized format to better anticipate and supply the data needed for UI information requests, reduce follow-up phone calls and streamline their UI response processes, reducing paper work while saving time and money.
For employers with a limited number of UI claims throughout the year, the SIDES E-Response website provides an easy and efficient portal for electronically posting responses to information requests from state agencies. SIDES
E-Response is available in participating states to any employer or TPA with internet access.
SIDES provides a more automated data-sharing and file-tracking interface between employers' IT systems and state agency networks. SIDES is an integrated computer-to-computer interface designed for employers and TPAs that typically deal with a large volume of UI information requests. SIDES is especially helpful to those that operate in multiple states.
Both options are completely free of charge for employers and TPAs, although there will be internal IT sytem development costs to integrate SIDES. In addition, both options have multiple layers of security that are implemented to the highest standard, given the sensitive data exchanged between state UI agencies and employers and TPAs.
Currently, SIDES has three exchange formats, Separation Information, Earnings Verifications and Monetary and Potential Charge Notices, that are currently in production. In addition, two additional exchange formats, Non- Monetary Determinations/Appeals and Billing or Charge Notices are being developed. When all these formats are developed and adopted by states agencies, employers will be able to do most of their UI benefit communications electronically
As of September 30, 2013, 46 states will be using SIDES and SIDES E-Response. Both systems offer an impressive array of benefits and have the potential to significantly improve the UI information exchange process. SIDES and SIDES E-Response give employers and TPAs an electronic way to simplify and streamline responses to UI information requests, saving time and money by:
- eliminating delays related to paper mail delivery, and allowing more time to gather information and respond;
- ensuring more complete information is provided through standard edits, validations and business rules, reducing time-consuming follow up phone calls;
- reducing paper handling, staff time and postage costs; and
- keeping UI tax rates lower by reducing improper payments.
In addition to the significant administrative cost savings offered by SIDES and SIDES E-Response, both options address two of the largest causes of UI overpayments: incorrect initial eligibility decisions (job separation issues) and working while receiving UI benefits.
Many UI overpayments, which could be prevented by receiving timely and accurate information, negatively impact employers' bottom lines. With this in mind, using SIDES or SIDES E-Response will help employers keep UI rates as low as possible by providing accurate, quality and timely information to state UI agencies.
Additional information is available at http://info.uisides.org.
Training and Outreach
NASWA hosted training sessions on how to connect to and exchange separation requests and responses using the automated option for SIDES in each of the last 3 years. The training is available for state staff, employers/TPAs Software development vendors.
If you are interested in attending an upcoming training event or have questions about training or SIDES in general, contact either Jerry Pectol, SIDES Director, at email@example.com (918) 213-0029 or SIDES Operations Director, Tom Byerley, at firstname.lastname@example.org (503) 303-4156.