Why weren’t we ready?
18 months into the pandemic, system still strain on Ohioans
Greg Delaat canceled a job interview for a phone call that took eight months and two state lawmakers to nail down.
The 57-year-old Parma man owes at least $21,000 in unemployment benefits that he never received. Despite having a master’s degree, Delaat can’t understand how he amassed this crushing debt.
Delaat says he followed every direction he’s received from the state unemployment office – even if answers were hard-fought. He once waited two hours for a call center supervisor to answer his questions only to have a lower-level staffer say one wasn’t available. Click.
So when Parma Rep. Jeff Crossman’s staff secured Delaat a phone call with the Ohio Department of Job and Family Services to unsnarl his tangled knot, Delaat cleared his afternoon.
A half an hour before the call, the state unemployment officials canceled. They needed more time to review the case. Delaat was left with no job and no answers.
Delaat’s experience embodies the exasperation,
frustration and oftentimes, desperation that Ohioans seeking unemployment have felt over the past 18 months. The payments intended as a lifeline during an unprecedented global pandemic instead left Ohioans treading water, at best, or drowning, at worst.
An audit of the state’s unemployment system released Thursday detailed how Ohioans were subjected to an unresponsive, overwhelming process despite being laid off through no fault of their own.
“It is unacceptable that when the process is stressed, they are the ones that suffer,” Ohio Auditor Keith Faber said.
It’s clear that Ohio’s unemployment system wasn’t prepared for the COVID-19 pandemic. But something short of a once-in-a-lifetime health crisis could have exposed the same cracks in Ohio’s underfunded, underequipped unemployment system.
In some instances, Ohio’s unemployment officials failed to learn painful lessons from the Great Recession. And without some soul-searching, they might not be ready for the next crisis.
Antiquated benefits system, overwhelmed staff
When Gov. Mike Dewine closed businesses to stem the spread of COVID-19, Ohio’s 16-year-old benefits system was ill-equipped for the surge of new unemployment claims, which jumped from 797 one week to nearly 12,000 the next. It’s one of several nationwide that still uses the antiquated computer language COBOL.
Ohio quickly fell behind in processing first payments, dropping from 88% handled in 21 days during 2019 to 38% in 2020 – well below the federal benchmark of 80%. The audit blamed these delays on an “antiquated system more than two decades old that was not capable of handling the volume of claims.”
At the time, the call center tasked with answering Ohioans’ questions about applying for unemployment had 40 full-time employees. Lengthy waits were the norm because of a slew of firsttime applicants, technology glitches and an insufficient number of call center employees.
Months into the pandemic, Ohioans still have no easy way to check the status of the unemployment claims or track a complaint, according to Faber’s audit. Adding those basic options could help reduce call volume.
Lawmakers required the Ohio Department of Job and Family Services to create a strategic staffing plan, but Thursday’s audit found that the plan did not offer details on how officials could staff up during a spike in unemployment.
“I say this in the nicest way possible: They have no clue on how to do anything except for verifying your information,” said Candy Bowling, 41, of Hamilton, who started a subreddit community on the website Reddit that became a go-to source for Ohio unemployment answers. “You can call in five times in one day and get five different answers.”
That was just the beginning. Congress wanted to help self-employed and part-time workers who weren’t eligible for traditional unemployment, so it set up Pandemic Unemployment Assistance or PUA. It also extended the weeks that individuals were eligible for unemployment and paid an additional $600 per week in benefits.
Ohio unemployment officials quickly realized their Cobol-based system wouldn’t work for the influx of new PUA applicants. So the state paid consultant Deloitte $9.6 million to create a new system.
Shortly after the Deloitte system launched, it was in trouble: A data breach exposed applicants’ Social Security numbers, bank account and routing numbers and other sensitive information. The breach affected residents in several states, including Ohio, and led to a lawsuit.
The dueling systems – traditional unemployment and PUA – led to massive confusion. Many Ohioans, including Delaat, weren’t sure which to apply for. Some were advised to apply for both.
Fraud and unintended consequences
In January, the PUA system hit another snag. Concerned about widespread fraud, federal officials required states to check applicants’ identities and eligibility for benefits.
In Ohio, that meant applicants had to provide a laundry list of documents, ranging from a Social Security card and birth certificate to two forms of photo identification.
“They want you to snail-mail them the actual driver’s license, Social Security card, birth certificate, along with a couple dozen tax forms,” Delaat said. “Snail-mail all of those documents in an envelope to an address, and people have said, ‘Are you kidding me?’”
Regina Campbell, an attorney at the Legal Aid Society of Greater Cincinnati, said helping low-income Ohioans compile documents to confirm their identities consumed most of their time. Applicants would be rejected because their photo was too fuzzy. Many didn’t have a second form of photo identification, so applicants started sending selfies, she said.
Nearly 139,000 PUA claims are still pending from February 2021 – 27% of all unresolved cases and the highest month by far, according to an August unemployment report.
Ohio’s unemployment officials realized they had created a mess. They are now asking for fewer documents, trying to balance warding off fraud and scaring off legitimate applicants, Ohio Department
of Job and Family Services Director Matt Damschroder said. “Instead of just a cattle call of information, we’re trying to be much more targeted to help individuals.”
Bowling, who started the subreddit on Ohio unemployment, had her benefits placed on hold for four weeks. Unemployment officials said they needed to verify her identity even though she had received benefits since early 2020.
Bowling didn’t want to provide bank account information for fear of being hacked. Instead, she had benefits loaded onto a pre-paid debit card.
Her benefits were released weeks later with little fanfare. Bowling doesn’t know why, and the Ohio Department of Job and Family Services didn’t explain. Bowling, who is also a plaintiff in a case to restore federal unemployment benefits ended early by Dewine, had contacted a state senator, so that might have done the trick.
With the money released, Bowling could pay bills that she had pushed off. She could buy groceries and food for her pets. But she faced another cliff: Benefits extended by the federal government ended around Labor Day.
Bowling saw businesses begging for employees, but she struggled to find a job that paid a living wage for full-time work. “If I go to the $9 an hour job, I lose everything.”
Bowling plans to start work at a food delivery service and another full-time position soon.
Overpayments and account takeovers
Fraud and identification woes weren’t the only messes. Since March 2020, Ohio’s unemployment compensation system has doled out $3.38 billion in overpayments to about 700,000 people.
This is one problem that Delaat is pleading with the state to fix. With $21,000 in overpayments hanging over his head, any job he obtains won’t be enough. Delaat hasn’t received benefits since January and feels stuck in an unemployment system that keeps failing him. He eventually got unemployment officials on the line, but his problems remain.
“I guarantee you I’ve never once thought about that money as a reason to be unemployed,” Delaat said. “I feel guilty every single day. I file between 20 to 50 applications a week. I’ve got enough rejections that if I printed them out, I could bury my house.”
In August, the state’s unemployment officials announced that Ohioans who received overpayments could keep the money if they file a waiver. As of Sept. 20, the state hadn’t started to review any of those waiver applications. And not everyone had applied: 48.8% of eligible traditional unemployment claimants and 19.4% of PUA claimants had sought a waiver, according to state data.
Meanwhile, Ohioans’ financial futures are in limbo. Some have lost their cars or had their utilities shut off while waiting for unemployment benefits blocked by no fault of their own, said Sen. Teresa Fedor, D-toledo, who has become a go-to contact for Ohioans seeking unemployment help.
“I have heard from Ohioans who have been waiting for more than five months to receive their unemployment payments, and they are losing hope,” Fedor said. “Gov. Dewine needs to understand what Ohioans are experiencing and address our failing social safety net.”
When those payments are finally released, some Ohioans face a different problem: account takeovers.
Scammers have rerouted Ohioans’ benefits to different bank accounts, stealing their long-awaited benefits. The Ohio Department of Job and Family Services doesn’t know how many people have lost benefits to account takeovers, but Damschroder says the problem lies with phishing schemes and identity theft – not a hack.
“There is nothing that indicates that account takeovers are a result of someone hacking into our unemployment systems and getting the login information that way,” Damschroder said.
Why wasn’t Ohio prepared?
In some ways, Ohio never could have prepared for the onslaught of unemployment claims caused by the COVID-19 pandemic. But Ohio also wasn’t adequately prepared for the next, inevitable crisis.
Take the antiquated benefits system. The system launched in 2004, but Ohio lawmakers didn’t allocate money to overhaul the system until mid-2018. Former Ohio budget director Tim Keen testified in February 2018 that the system was “nearing obsolescence” and was “quite costly to maintain.”
In December 2018, the Ohio Department of Job and Family Services contracted with Sagitec for a cloud-based system that will cost the state $86 million. Then, the pandemic hit.
“If we had not had the pandemic at this moment in time, we would not still be using that Cobol-based system,” Damschroder said.
The new Sagitec system is expected to accept unemployment claims by late 2022. In the meantime, Ohio has paid more than $89 million to contractors and consultants to shore up the current system and answer Ohioans’ unemployment questions.
Why didn’t Ohio invest in solutions before the next crisis hit? One reason is the way the unemployment system is funded.
Federal money for unemployment drops off when unemployment claims are low. If state lawmakers don’t offset the money, then the cash isn’t there for improvements, Damschroder said.
Add to that a decades-long fight between business and labor over how to adequately pay for unemployment, and the result is that many of the lessons learned from the Great Recession, such as a fix for the Cobol-based system, simply weren’t implemented.
“What didn’t come out of that time period was a long-term funding commitment to maintain a minimum level of services so that when the next recession happened that we’d be able to respond,” Damschroder said.
This isn’t a zero-sum game, as Bowling knows too well. Months of reading Reddit and Facebook posts about Ohioans’ efforts to obtain unemployment has her convinced that the system is broken and badly in need of a fix.
“It is very overwhelming and sometimes I cry when I read them. The ones that get me are the ones who have lost their house and their car,” Bowling said. “There’s some stuff that hits me too hard.”
Jessie Balmert is a reporter for the USA TODAY Network Ohio Bureau, which serves the Akron Beacon Journal, Cincinnati Enquirer, Columbus Dispatch and 18 other affiliated news organizations across Ohio.