DIRECTIVE	:	UNEMPLOYMENT INSURANCE PROGRAM LETTER NO. 20-99
TO	:	ALL STATE EMPLOYMENT SECURITY AGENCIES
FROM	:	GRACE A. KILBANE Director Unemployment Insurance Service
SUBJECT	:	Automation of Unemployment Compensation for Federal Employees (UCFE) and Unemployment Compensation for Ex-servicemembers (UCX) Programs

1. Purpose. To advise State Employment Security Agencies (SESAs) of changes planned for the UCFE and UCX programs beginning in FY 2000.

2. .Reference. ETA Handbook Nos. 384 and 391; 20 CFR Parts 609 and 614; ICON User Guide.

3. Background. Historically, administration of the UCFE and UCX programs has been more expensive and labor intensive than for the regular UC programs, in large part due to a heavy reliance on manual procedures to obtain needed wage and separation information.

   Since 1954, the UCFE program has been operated under manual procedures with SESAs generating a hard copy ES 931 to the Federal agency to request wage and separation information at the time a claim is filed. Upon receipt of the wage information from the Federal agency, the SESA has to manually load the information to the wage file for access during the monetary determination process. Because of the untimeliness of large numbers of responses, affidavits taken at the time of initial claims are often relied upon to issue timely determinations and payments.

   Advances in technology make it possible to improve the exchange of necessary information between the Federal agencies and the SESAs. The Information Technology Support Center developed and pilot tested the electronic exchange of UCFE wage and separation data between two Federal agencies, the United States Postal Service and United States Department of Commerce, and the States of Maryland, Minnesota, North Carolina and Virginia. The results of the pilot indicate that an electronic exchange of data between the State and Federal agencies will reduce UCFE claims costs for SESAs and Federal agencies while also significantly reducing Federal agency response time with no reduction in the accuracy of the data.

   Since 1958, operation of the UCX program has primarily relied on the claimant presenting Copy No. 4 of his/her DD Form 214 to the SESA at the time of filing. The information contained on the DD Form 214 is used to determine UCX eligibility upon validation of the authenticity of specific data elements against the Department of Labor's copy provided by the Department of Defense (DOD) and maintained by the Louisiana Claims Control Center (LCCC). Currently, when no DD Form 214 is on file with the LCCC, the UCX claim is suspended until a copy is received from DOD.

   In response to States' move to remote initial claims taking, changes are planned for the handling of claims under the UCX program that include the electronic transfer of wage and separation information between LCCC and the SESAs and implementing an affidavit process.

   Also, for both the UCFE and UCX programs, the record format for the Claims Control Record maintained by the LCCC is being changed to include all claims information necessary for a State to determine if a subsequent claim involves an improper wage assignment or duplicate use of wages.

4. Improvements Planned.

   1. UCFE Program. Lockheed Martin is developing an ICON application to handle SESAs' electronic wage and separation requests to and responses from Federal agencies which will provide for differing levels of participation. Because some Federal agencies have minimal numbers of claims filed involving their wages, it is expected that not all Federal agencies will choose to participate in the electronic data exchange. Therefore, the new application will allow for hardcopy wage and/or separation requests to be sent as an alternative.

      The major features/procedures are as follows:

      • A data entry screen will be provided for entering wage and separation requests with the Federal agency, arranged by the 3-digit Federal Identification Code (FIC).

      • Based on the Federal agency FIC, the application will use a matrix to identify the type of wage request to be generated to the Federal agency.

      • An electronic request will be generated for wage and separation information or wage information only based on the level of Federal agency participation.

      • When a hardcopy ES 931 is necessary, the system will automatically generate one for mailing, using an electronic Federal agency address directory that will be maintained on the ICON system.

   2. UCX Program.The DD Form 214 maintained by the LCCC for the Department will be the official source of wage and separation information for SESAs' use to establish UCX eligibility. The LCCC data base for the DD Form 214 and the Claims Control File will be expanded to store the additional data elements necessary to support the new procedures.

      The major features/procedures are as follows:

      • SESAs will transmit an electronic Request for UCX Wage and Separation Information to LCCC at the time of the initial claim.

      • The request will be matched against the Claims Control File and will generate a response, as appropriate.

      • When there is a record of a UCX benefit year having been established, only information from the Claims Control File will be generated. No information from the DD 214 file will be sent.

      • When there is no Claims Control Record on file, LCCC will calculate the quarterly wages, including lag period, and respond electronically to SESAs' request(unless there is a prior claim established per the Claims Control File).

      • When there is no DD Form 214 on file, SESAs will be immediately notified. SESAs will be able to use the claimant's Copy No. 4 of his/her DD Form 214 as a affidavit to establish eligibility. This will require the SESAs to obtain a Copy No. 4 of the claimant's DD Form 214 from the claimant.

      • LCCC will continue to recycle the request against the DD Form 214 file, and notify DOD that a claim has been filed and that there is no DD Form 214 on file after a specified number of days after the date of discharge has elapsed.

      • When LCCC subsequently receives a DD Form 214, the wage and separation information will be sent to the SESA for use in verifying the affidavit information.

      • The data exchanges between the SESAs and LCCC will be transported over the ICON in the same manner as inquiries to LCCC are currently being handled.

      • SESAs will be provided with specifications to create the appropriate recordformats and will also have to provide for the necessary programming to process theincoming data.

   3. UCFE/UCX Claims Control Record.b.The Claims Control File maintained by LCCC will be changed to contain information on benefit years established involving the use of UCX and UCFE wages. Except as necessary for processing UCX follow-ups when no DD Form 214 is on file, no record of the initial inquiry will be maintained by LCCC.

      The major features/procedures are as follows:

      • SESAs will continue to generate an inquiry to LCCC at the time of the UCFE initial claim. The UCX Request for Wage and Separation Information will serve the inquiry purpose for UCX claims.

      • SESAs will create and transmit a Claims Control Record to LCCC when a UCX, UCFE or Joint (UI-UCFE, UI-UCX) benefit year is established.

      • The revised Claims Control Record will contain all pertinent information about the claim, i.e., the effective date, base period, benefit year ending date, etc., so that SESAs can make a decision about the status of the wage assignment without having to contact the other State.

      • When a claim is canceled, SESAs will request the LCCC to cancel the Claims Control Record.

5. SESA and Federal Agency Responsibilities.

   1. SESA Responsibilities.  SESAs shall be responsible for the following implementation and on-going activities associated with participation in this system:

      (1)  Installation of the model code and interfacing with State wage and benefit systems, as needed, as well as on-going maintenance

      (2)  Training appropriate SESA staff on the use of the system.

      (3)  Ensuring ICON programmer staff participation at the training session that will be provided at the National Interstate Training Meeting in early September.

   2. Federal Agency Responsibilities.  Federal agencies will be responsible for thefollowing implementation and ongoing activities associated with participation in this system:

      (1)  Attending pre-implementation programming necessary for the agency's participation in the system.

      (2)  Training appropriate Federal agency staff on using the system.

      (3)  Establishing a schedule for sending and receiving electronic data from the HUB.

      (4)  The payment for communication line costs between their location(s) and the UCFE program server at the ICON HUB.

      (5)  Promptly informing the Department of Labor's Unemployment Insurance Service at the National Office of any change of addresses necessary to be updated in the electronic directory.

6. Federal Agency Connectivity. Federal agencies will not be directly connected to the ICON frame relay network. A server at the ICON HUB will handle the transfer of request and responses between the Federal agencies and the ICON.

   To limit costs incurred under the ICON contract, Federal agency access will be provided through dial-up connections to the server. Communication costs incurred by the Federal agency for connections to the UCFE server are the responsibility of the Federal agency.

7. Anticipated Implementation Schedule.

   1. Pilot testing of the ICON UCFE application during the 4th quarter of FY 1999.

   2. Pre-implementation training for SESA ICON programmers scheduled for September 8-10 at the National Interstate Training Meeting in St. Petersburg, Florida.

   3. Distribution of model code and system specifications in early October 1999.

   4. System operational in all SESAs by October 1, 2000.

8. Action Required. SESA administrators are requested to:

   1. Make a copy of this UIPL available to all appropriate staff;

   2. Submit the name(s) of the data processing staff member(s) that will represent the State at the Training Meeting to their Regional Office no later than June 1, 1999.

9. Inquiries. Questions should be directed to the appropriate Regional Office.