ARIZONA HOUSE OF REPRESENTATIVES

Fifty-fifth Legislature

First Regular Session

HB 2397: unemployment insurance; fraud prevention

Sponsor: Representative Cobb, LD 5

Committee on Health & Human Services

Overview

Establishes requirements for the Arizona Department of Economic Security (DES) in order to enhance the integrity of Arizona’s Unemployment Insurance Program (UI Program).

History

The UI Program is administered by DES to provide security to an individual worker when unemployment occurs beyond the worker’s control. Monetary eligibility for UI benefits is based on the unemployed worker’s insured wages paid during a one-year period. The statutory maximum weekly UI benefit in Arizona is $240. (A.R.S. § 23-779)

According to DES, there has been a significant surge in UI benefit fraud, largely associated with identity theft. Phishing scams, previous corporate data breaches and other tactics are currently being used by fraudsters to collect information from individuals and file for UI and Pandemic Unemployment Assistance benefits.

Provisions

1. Requires DES, in order to enhance the integrity of Arizona’s UI Program, to perform the following:

a) Engage with and use an integrity data hub;

b) Check the unemployment insurance rolls against the state department of corrections list of incarcerated individuals on a weekly basis to verify eligibility; and

c) Check new hire records against the national directory of new hires on a weekly basis to verify eligibility. (Sec. 1)

2. Requires the integrity data hub to meet both of the following:

a) Be designed by the leading unemployment insurance experts at an unemployment insurance integrity center that provides information on the prevention, detection and recovery of improper payments, fraud and delinquent employer contributions; and

b) Provide critical cross-matching functionality to combat the challenges and urgencies of unemployment insurance fraud. (Sec. 1)

3. Permits DES to execute a memorandum of understanding with any department, agency or division for any information required to be shared between agencies. (Sec. 1)

4. Instructs DES to review the case of an individual enrolled in the UI Program upon the receipt of any information indicating a change in circumstances that may affect eligibility. (Sec. 1)

5. Allows DES to adopt any rules necessary for purposes of carrying out the above-mentioned provisions. (Sec. 1)

6. Defines new hire records and unemployment insurance rolls. (Sec. 1)

7. Contains a delayed effective date of January 1, 2022. (Sec. 2)

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11. HB 2397

12. Initials EB/SF Page 0 Health & Human Services

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