House Passes Bill to Aggressively Pursue Unemployment Insurance Fraud
Good news! Last week, the Michigan House passed a bill (HB 4408) to require the state to more aggressively pursue unemployment insurance (UI) fraud. This legislation, which requires the state to implement commercial software to better identify fraud and increases penalties on bad actors, could save the state's insolvent UI trust fund upwards of $80 million.
U.S. Department of Labor data reveals that there was $475.6 million of waste and fraud in Michigan's UI system in 2009, with approximately $143 million of that going to people working while fraudulently collecting benefits. HB 4408 requires the state to move outside its current system of tracking fraud, which relies heavily on outside whistleblowers, and implement commercial fraud detection software to take advantage of the best fraud practices employed by other states and industries. Thirteen other states take such an approach to addressing fraud, including Alabama, Alaska, Arizona, Arkansas, Colorado, Illinois, Kentucky, Nebraska, New Jersey, North Carolina, Tennessee, Washington and Washington D.C.
House Bill 4408 passed by a vote of 79 to 31. A record of lawmakers voting "yes" and "no" on this proposal can be found here (See page 347). The Michigan Chamber's testimony in support of this legislation, HB 4408 introduced by Rep. Stamas, can be found here.
We are hopeful that the Michigan Senate will move this legislation quickly, agreeing that job providers, who fund the UI system, deserve better than a $143 million giveaway of their hard-earned tax dollars.
Please contact Wendy Block, Director of Health Policy and Human Resources for the Chamber, if you have any questions at 517/371-7678 or wblock@michamber.com.
