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Agency looks at end of year to resolve 40,000 claims caught up in verification process.

Employment Department officials have started a new effort to resolve more than 40,000 claims that are in adjudication.

It is a process to ensure that people are eligible for benefits in the first place and draw money first from the state trust fund, instead of one of several federal programs that Congress created in response to the coronavirus pandemic and the resulting economic downturn. Congress put that requirement into the CARES Act, a coronavirus aid plan that became law March 27.

Acting Director David Gerstenfeld says he hopes to set a specific target date soon, as the agency has done with two previous efforts to eliminate backlogs.

"The targets we are putting out there are very aggressive," he said Wednesday, Oct. 28, during a weekly conference call with reporters. "They rely on us to do work not continuing at the same pace, but to keep speeding up significantly. We know there are a lot of people waiting. I believe the anticipated target would be to get through the 41,700 claims remaining to be done pretty close to the end of the year.

"But we don't want to give a false expectation."

On Sept. 30, the agency reported that 52,000 people had claims in adjudication, but the number has dropped steadily to 41,700 as of Oct. 28. Gerstenfeld said about a third of them (18,000) have received some money under a benefits-while-you-wait program.

The new effort comes as the state faces a potential class-action lawsuit from claimants, who seek a ruling in Multnomah County Circuit Court to compel the department to pay benefits within four weeks of receiving claims. Gerstenfeld said new claims for regular benefits, if they do not have to go through adjudication, are being processed now within days of their receipt.

A judge will have to consider whether such payments comply with federal requirements for states to verify eligibility, particularly for the newly created federal benefits for self-employed and gig workers under the CARES Act. They had not been eligible previously.

Caught in process

"We first have to determine whether they are eligible for regular benefits before they can receive PUA (federal) benefits," Gerstenfeld said. "We want people to know we are doing everything we can to speed up the adjudication process and to resolve these claims as quickly as possible."

Adjudication can delay payment of benefits by many weeks, although the Employment Department has implemented a benefits-while-you-wait program for people it determines are likely to qualify for either regular or federal benefits. The U.S. Department of Labor, which oversees how states administer unemployment claims, has restricted Oregon's use of that program so that fewer people can obtain benefits in advance.

Gerstenfeld said the agency now has 300 adjudicators to work on claims. He said many of them, and other agency employees, are working overtime to do so.

"Before we pay anyone benefits, federal law requires us to make sure they meet the eligibility requirements," he said. "Any number of things can come up that we have to do adjudication on so that we can meet that federal standard."

Under the law, people are ineligible for any benefits if they quit their jobs voluntarily, if their employers fire them or they leave the state for a specified period, among other reasons.

Typically, about two-thirds of people filing claims end up receiving benefits.

Two previous efforts

This is not the first time the Employment Department has announced a "focus" effort to eliminate backlogs.

On May 28 — three days before Gov. Kate Brown fired director Kay Erickson and named Gerstenfeld as acting director — the agency announced an effort to eliminate a backlog of 38,000 claims for regular benefits and set a target of June 12. Just under 1,000 claims were unresolved by then.

On June 17, the agency announced another effort to eliminate a backlog of 70,000 claims from people newly eligible under the CARES Act for federal benefits for self-employed and gig workers. The agency met its goal by Aug. 4, a few days before the target of Aug. 8.

But many of those claims for benefits under what is known as Pandemic Unemployment Assistance required adjudication. Regular-benefit claims can be verified through payroll records kept by employers that pay taxes into the state trust fund. But the CARES Act requires states to verify that claimants do not qualify for regular benefits — usually by checking information on their income tax returns, which are confidential — before they can obtain the federal pandemic benefits.

The Department of Revenue does share information with the Employment Department. But an Aug. 10 special session of the Oregon Legislature passed a bill to make clear there are no legal barriers to information-sharing.

"We will be reporting our progress (on the new effort) on a regular basis," Gerstenfeld said.

Billions paid out

Between March 15, when the pandemic started, and Oct. 24, Oregon has paid out $5.4 billion in benefits, including federal money that does not affect the state trust fund.

Gerstenfeld said the $5.4 billion paid out so far is equal to what was paid during the past nine years. He was director of the unemployment benefits division from 2011 until he took a different job within the agency in 2019.

That money went to 593,000 claims for regular benefits, 70,000 claims for federal benefits for self-employed and gig workers and 66,000 claims for federal benefits for people enrolled in WorkShare programs. Most also qualified for extra $600-per-week payments that came to an end July 25, and $300-per-week payments for eligibility between July 26 and Sept. 5.

Federal benefits for the two latter programs end Dec. 26 under the CARES Act. Whether additional benefits are forthcoming is in dispute in Congress. The Democratic-led House has passed two follow-up pandemic aid plans, one totaling $3.4 trillion and the other $2.2 trillion, that extend a $600-per-week extra payment for unemployed workers. The Republican majority in the Senate has failed to advance a smaller $500 billion plan, which offered far less for unemployed workers.

Unlike at least 21 other states, Gerstenfeld said he does not anticipate that Oregon will have to borrow from the federal government to pay unemployment benefits from its trust fund. He said that employer tax rates, which the agency must set soon for 2021, are likely to be in the mid-range.

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