Narrative: a. 5.

State Quality Service Plan (SQSP)
Integrity Action Plan (IAP)
State Name Maryland – Fiscal Year (FY) 2024
Accountable Agency Official(s).
List the person or persons accountable for ensuring integrity in the state’s unemployment
insurance (UI) program.
Name: Likivu Speaks
Title: Acting Assistant Secretary for Unemployment Insurance (UI Director)
Email: Likivu.Speaks@Maryland.gov
Phone: 410-767-0301
*Note: Unemployment Insurance Program Letter (UIPL) No. 09-23, issued on June 30, 2023,
makes reference to UIPL No. 22-21, Change 2, throughout the guidance. However, on July 13,
2023, the Employment and Training Administration (ETA) issued UIPL No. 10-23, which
rescinded UIPL No. 22-21, Change 2. UIPL No. 11-23, also issued on July 13, 2023, changed
the amount of the integrity grant funding originally issued under UIPL No. 22-21, Change 2, but
maintained the guidance on required and recommended fraud prevention and detection and
overpayment recovery activities.
● (Topic #1: National Priority) – Ensuring UI program integrity by assessing and
evaluating fraud risks, implementing, and maintaining sufficient controls to effectively
mitigate the likelihood and impact of fraud, and reducing improper payments.
In evaluating fraud risks, states should consider both eligibility fraud risks and
identity (ID) fraud risks.
Maryland continues to consider both eligibility fraud risks and ID fraud risks in
evaluating fraud risks. The Maryland Department of Labor (MD DOL) is committed to
ensuring that the Maryland UI system is effectively safeguarded against those who seek
to abuse and to manipulate the system.
o State plans to evaluate UI fraud risks and implement and maintain sufficient
controls to effectively prevent fraud and reduce improper payments, including state
actions to develop their own state-specific antifraud strategy.
⮚ Key elements of an antifraud strategy include:
● Who is responsible for fraud risk management activities?
o Establish roles and responsibilities of those involved in fraud risk
management activities, such as the antifraud entity and external parties
responsible for fraud controls and communicate the role of the Office of
Inspector General (OIG) to investigate potential fraud.
● What is the program doing to manage fraud risk?
o Describe the program’s activities for preventing, detecting, and responding to
fraud, as well as monitoring and evaluation.
● When is the program implementing fraud risk management activities?
o Create timelines for implementing fraud risk management activities, as
appropriate, including monitoring and evaluations.
● Where is the program focusing its fraud risk management activities?
o Demonstrate links to the highest internal and external residual fraud risks
outlined in the fraud risk profile.
● Why is fraud risk management important?
o Communicate the antifraud strategy to employees and other stakeholders, and
link antifraud efforts to other risk management activities, if any.
⮚ See A Framework for Managing Fraud Risks in Federal Programs at
https://www.gao.gov/assets/gao-15-593sp.pdf for additional information.
The MD DOL Division of Unemployment Insurance (DUI) continues to implement and
use several tools to meet its high integrity standards. A leadership team of DUI staff,
headed up by the Director of BEACON and the BEACON Project Manager, is constantly
evaluating fraud risks, considering new fraud risk management activities, and monitoring
data to ensure that the agency is doing all it can to prevent fraud, both eligibility fraud
and ID fraud. The tools currently in use by the agency are explained below.
o State use of tools, services, strategies, process improvements, and/or procedural
changes adopted by the state to combat fraud, verify identities, and enhance
recovery efforts. States must identify which tools, solutions, and service provider(s)
are used in the state’s fraud management operations, including but not limited, to
the following areas: data analysis, risk-based ID verification, fraud prevention and
detection, and cybersecurity.
⮚ Include strategies, solutions, and/or activities using funds the Department has made
available to states for combatting fraud and strengthening UI program integrity under
UIPL Nos. 28-20; 28-20, Change 1; 28-20, Change 2; 28-20, Change 4; 22-21; 11-23;
and 02-22.
⮚ Provide details on overpayment recovery efforts including:
● Actions with banks, financial institutions, and with Federal law enforcement’s
forfeiture and seizure efforts.
● Information on how the state is using waivers of recovery of overpayments both
for regular UI and temporary UC programs created by the CARES Act, including
if the state is using approved blanket waivers as described in UIPL No. 20-21,
Change 1.
● How the state is using the Treasury Offset Program (TOP) for benefit
overpayment recovery, how the state is ensuring covered debts are being
submitted, and any barriers/challenges in working with TOP.
Strategies, solutions, and/or activities for combating fraud and strengthening UI
program integrity
DUI has a contract with LexisNexis for fraud detection and prevention services. Since
2021, DUI has integrated several LexisNexis tools into its BEACON system in two
phases. The integration is currently in Phase 2. All claimants who file an initial or
additional claim or reopen a claim are required to go through this identity verification
process (knowledge-based questions followed by a one-time passcode verification if the
user cannot answer the knowledge-based questions). If the user cannot pass this process,
they must call DUI to speak with a live agent. In May 2022, Maryland implemented
Step-Up Authentication with LexisNexis to prevent fraudsters from accessing claimants’
portals on BEACON and redirecting UI benefits to other bank accounts. When claimants
attempt to change information in their BEACON portal, including demographic and bank
account information, they are put through the same ID verification process described
above for initial applicants. The agency is continuing to test TrueID, an additional fraud
barrier.
DUI has implemented an additional process to combat fraud utilizing the SDN.
Dedicated staff are manually reviewing and checking the legitimacy of required claimant
uploaded identity verification documents. This internal review is triggered when a
financial institution rejects and/or returns UI benefit payments issued to a claimant,
indicating that the claimant’s name appears on the SDN. DUI verifies if the claimant
actually appears on the SDN and documents the search. If there is a valid match against
the U.S. Department of Treasury, Office of Foreign Assets Control (OFAC) SDN list, then
DUI must report the match directly to OFAC. If there is no valid match, DUI investigates
whether the claim is otherwise fraudulent. This process has uncovered several hundred
fraudulent claims.
Maryland’s prevention tools screen for: (1) claimants that filed from temporary or
disposable email addresses, (2) multiple claimants that filed using the same email
address, (3) multiple claimants that applied using the same phone number, and (4)
multiple claimants that applied from the same IP address. In addition, Maryland screens
for claimants (1) whose business address is the same as their residential address, and (2)
whose address is correct save for the listed state. These tools were part of BEACON 2.0’s
integrated functionalities and were implemented with the launch of BEACON 2.0 in
September 2020. After Maryland transitioned to payment benefits via direct deposit in the
Spring of 2021, we screened for multiple claimants that selected direct deposit as their
payment method and entered the same bank account information. Other prevention tools
were implemented with the Lexis/Nexis project in May 2021, including screening for: (1)
claimants who are deceased and (2) multiple claimants filing using the same telephone
number in their profile information.
On July 3, 2020, DUI added a “human verification” requirement, which requires the
claimant to enter letters and numbers that are displayed in an image on the screen. These
are generally called “CAPTCHA” and are required when claimants login to their
account, reset their passwords, begin an initial claim application, return to an unfinished
claim application, activate their account, retrieve their username, or retrieve or reset
their password. MD DOL receives tips regarding fictitious employers and employees via
their fraud email ui.fraud@Maryland.gov. In addition, staff are trained to notice
suspicious activity such as new claims from newly-registered employers.
In August 2023, DUI deployed a Web Application Firewall that prevents BEACON access
from foreign IP addresses (except for Canada & US territories).
Actions with banks, financial institutions, and with federal law enforcement’s
forfeiture and seizure efforts
In 2021, Maryland transitioned to providing benefits through direct deposit (or by paper
check if the claimant prefers). In order to receive payment by direct deposit, claimants
provided their bank account information, and some financial institutions required
confirmation of a claimant’s account through a micro deposit transaction (two deposits of
less than one dollar into the claimant’s account that allowed confirmation of deposits into
the proper account). Transitioning from the use of debit cards to direct deposit presented
an opportunity to verify if a bank account was fraudulent.
MD DOL is in contact with the Department of Labor’s Office of Inspector General, Office
of Investigations (DOL-OIG) regularly, assisting with their investigations and/or
referring cases to them for investigation as required. UI claims data is shared with OIG
per a subpoena, and they are sent subsequent refreshed data dumps as requested.
Maryland has a single POC at OIG.
Waivers of Recovery of Overpayments
DUI’s Benefit Payment Control (BPC) Unit continues to review and process requests for
waivers of overpayments received, both for regular (non-pandemic) UI benefits and for
federal pandemic UI benefits.
MD DOL is using Scenarios 2 (Group 2) and 6 (Group 4) from UIPL 20-21, Change 1,
for the blanket waivers. Maryland currently has two pending blanket waiver scenarios
under review; they relate only to payments of FPUC benefits.
Treasury Offset Program (TOP)
Due to a settlement agreement entered into as part of litigation, Maryland has suspended
use of TOP. Maryland hopes to resume use of TOP this year but does not have an
estimate at this time.
o State use of UI Integrity Center resources, with a particular focus on state
connection to the Integrity Data Hub (IDH) and use of its datasets to cross-match
unemployment compensation (UC) claims and aid in the prevention and detection of
fraud and improper payments (see Training and Employment Notice (TEN) No.
24-21);
⮚ Discuss the state’s connection to the IDH, including frequency of IDH use.
● Does the state submit all initial and continued claims for IDH cross-matching? If
not, what is preventing the state from sending all claims?
⮚ If the state is not connected to the IDH and/or is connected but not regularly
submitting UI claims data through a webservice/real-time connection to IDH, provide
details on the state’s plan for how to increase usage and an anticipated timeline to:
● Connect to the IDH.
● Increase frequency of IDH use.
● Fully leverage all available IDH capabilities. IDH capabilities include:
o Suspicious Actor Repository (SAR)
o Multi-State Cross-Match (MSCM)
o Identity Verification (IDV)
o Bank Account Verification (BAV)
o Fraud Alerting
o Foreign Internet Protocol (IP) Address Detection
o Suspicious Email Domains and Patterns
● Update the IDH connection to a webservice/real-time connection.
● Identify barriers to using any of the available IDH capabilities.
⮚ If the state has not executed IDH Participation Agreement - Version 5.0 (see TEN No.
24-21), provide details on the anticipated timeline to update to IDH Participation
Agreement – Version 5.0.
⮚ Discuss the state’s use of the UI National Integrity Academy’s virtual trainings and/or
eLearning lessons.
⮚ Discuss the state’s use of UI Integrity Knowledge Exchange Library resources,
including the Behavioral Insights Toolkit (see TEN No. 15-21).
⮚ Discuss the state’s participation in State Consultative Services.
Note: The IDH Team has a one-page dashboard report for each state summarizing current
IDH utilization and areas where IDH use might be expanded. Please reach out to
IDHTeam@naswa.org to request a copy of your state’s IDH utilization dashboard report.
MD DOL has signed a Memorandum Of Agreement (MOA) with NASWA to integrate
Integrity Data Hub (IDH) applications into the claims processes. Once implemented,
initial, additional, and continued claims will be submitted for a cross-match of IP
addresses, email addresses, mailing addresses, and banking information with other states
to detect and alert states of suspicious claim activity that may be crossing state lines.
Maryland continues to use the Suspicious Actor Repository (SAR). SAR acts as an
exchange of information among states that provides details needed to identify fraud and
stop or reduce improper payments. This database application provides Maryland with
fraud alerts such as IP addresses and phone numbers of claimants and employers that
are associated with identity theft and interstate fraud schemes. DUI receives fraud alerts
to detect potential criminal activity. If flagged by SAR, the claims are automatically
blocked, pending review by DUI staff.
In addition, Maryland is working with Tiger Teams pursuant to UIPL 02-22. Integration
of IDH applications was part of the Tiger Teams’ “quick fixes” proposal presented to
Maryland on September 26, 2022. Maryland will be working with the Tiger Teams to
prioritize the recommended “quick fixes,” including integrating the IDH applications.
Maryland intends to begin using all IDH tools in the future. This process has been slowed
by the issuance of UIPLs 10-23 and 11-23 (requiring resubmission of application for
Tiger Teams grant).
o State use of required and recommended integrity controls and overpayment
recovery activities as outlined in UIPL No. 11-23, including any additional effective
cross-matching and overpayment recovery activities and identified best practices.
⮚ Provide details regarding the state’s use of each cross-match/integrity control and
overpayment recovery activity (required and recommended) as outlined in UIPL No.
11-23. Include details on the frequency of crossmatch/integrity controls use (e.g.,
conducted on all initial claims, all continued claims, only when suspicious activity is
identified?) and frequency of overpayment recovery activities.
⮚ Cross-matches/integrity controls and recovery activities include:
Cross-matches/Integrity Controls
● ID Verification;
● National Directory of New Hires (NDNH);
● Quarterly Wage Records Cross-match;
● Systematic Alien Verification for Entitlement (SAVE);
● Referral of allegations reasonably believed to constitute UC fraud, waste, abuse,
mismanagement, or misconduct to DOL-OIG;
● UI Integrity Center’s IDH;
● Digital Authentication, such as Multifactor Authentication (MFA);
● Device Fingerprint/Reputation Management;
● Fraud Risk Scoring (i.e., Case Management Prioritization);
● Comparisons and cross-matches that detect shared characteristics;
● Social Security Administration cross-matches (i.e., Unemployment Insurance
Query (UIQ), Prisoner Update Processing System (PUPS), Death Master File);
● Federal, state, and local incarceration cross-matches;
● Deceased Records cross-matches;
● Vital Statistics cross-matches;
● State Directory of New Hires (SDNH);
● Department of Motor Vehicle cross-match;
● Interstate Benefits (IB) cross-match;
● State Identification Inquiry (SID) and IB8606 enhancements made to the
Interstate Connection (ICON) network cross-match to prevent concurrent claim
filing in multiple states;
● Use of a unique identifier to identify claimants instead of using the full SSN;
● Fictitious employer cross-matches;
● Periodic IT security assessments and audits consistent with National Institute of
Standards and Technology (NIST)-compliant information technology security
guidelines;
● Adequate internal controls to protect the integrity and security of state assets;
● Implement a cross-functional integrity task force to develop and implement
state-specific action plans to reduce UI improper payments.
Overpayment Recovery Activities
● Benefit Offsets;
● TOP;
● Cross Program Offset Recovery Agreement (CPORA);
● Interstate Reciprocal Offset Recovery Arrangement (IPORA);
● Negotiating repayment plans;
● Accepting repayments through various methods (e.g., online, via debit/credit
card);
● State Income Tax Offset Program;
● Wage garnishments;
● Property liens and assessments;
● Offsets of lottery winnings, homestead exemptions, and other benefits;
● Active participation in probate and/or bankruptcy proceedings;
● Skip tracing;
● Work proactively and collaboratively with banks and financial institutions;
● Civil actions;
● Credit bureau referrals;
● State/federal prosecution;
● Penalties and interest on overpayments in compliance with state and federal law;
● Collection agency referrals;
● Implementing a voluntary fraud self-disclosure program;
● Other recovery methods as determined by state law or policy.
⮚ Identify any additional integrity controls or recovery activities the state uses that are
not listed in UIPL No. 11-23.
⮚ Provide promising practices.
⮚ Identify challenges with cross-matches or in overpayment recovery activities.
⮚ If the state does not currently use one of the integrity controls or recovery activities
listed in UIPL No. 11-23, provide the state’s plan and anticipated timeline to request
and obtain access to the cross-match/integrity control or to implement the
overpayment recovery activity.
Note: If the state does not plan to obtain access to a cross-match/integrity control or
implement a specific recovery activity, please explain.
Crossmatches/Integrity Controls
ID Verification: See above for information regarding LexisNexis fraud detection and
prevention services DUI uses for ID verification (initial claims and Step-Up
Authentication).
National Directory of New Hires (NDNH): MD DOL received frequent hiring data from
NDNH. Information from NDNH reports are automatically assigned as a daily work item
within the BEACON staff portal to appropriate staff.
Quarterly Wage Records Crossmatch: Maryland crossmatches quarterly wage
information with UI payment information to identify whether claimants are eligible for
regular UI and to detect benefit year earnings. The crossmatch is used for each claimant
filing a claim.
Systematic Alien Verification for Entitlement (SAVE): Maryland uses SAVE to verify
claimants’ employment eligibility and able and available status. SAVE verification is
performed for each claimant filing a claim.
Referral of allegations reasonably believed to constitute UC fraud, waste, abuse,
mismanagement, or misconduct to DOL-OIG: MD DOL assists DOL-OIG) with
investigations and refers cases to them for investigation.
UI Integrity Center’s IDH: See above section for information regarding Maruland’s
planned future integration of IDH applications.
Digital Authentication, such as Multifactor Authentication (MFA): See above for
multifactor authentication used by DUI during ID verification (knowledge-based
questions and/or a one-time passcode verification if the user cannot answer the
knowledge-based questions).
Device Fingerprint/Reputation Management: LexisNexis tools integrated into BEACON
recognizes new devices and/or networks from where a user is logging in and uses the
information (email address, telephone number, IP address) as part of fraud risk scoring.
Fraud Risking Scoring (i.e., Case Management Prioritization): Maryland has a contract
with LexisNexis for fraud detection and prevention services. Several applications
integrated into BEACON as part of that contract include fraud risk scoring
(ThreatMatrix, FlexID, FlexID Digital, and LexisNexis’s Emailage Network).
Comparisons and crossmatches that detect shared characteristics: BEACON has built-in
scripts to detect the following used on multiple claims: same IP address, same direct
deposit or banking information, same mailing address, and same email address.
Social Security Administration Crossmatches (i.e., Unemployment Insurance Query
(UIQ), Prisoner Update Processing System (PUPS), Death Master File): Maryland uses
SSA UIQ data. Maryland is updating its information exchange agreements with the
Social Security Administration in order to change the method by which it will receive
PUPS data. Maryland’s new system does not interface with PUPS data as currently
received. The request to amend the agreements is pending with SSA.
Federal, state, and local incarceration crossmatches: Maryland uses data from a
Maryland State Department of Corrections prison crossmatch for state incarceration
data.
Deceased Records crossmatches: The Vital Statistics crossmatch described below
contains deceased records data.
Vital Statistics crossmatches: DUI receives data from the Maryland Department of
Health, Vital Statistics Administration, and crossmatches claimant data against it.
State Directory of New Hires (SDNH): MD DOL received frequent hiring data from
SDNH. Information from SDNH reports are automatically assigned as a daily work item
within the BEACON staff portal to appropriate staff.
Department of Motor Vehicle Crossmatch: DUI does not currently use a DMV
crossmatch. DUI staff do have access to DMV driver records to verify the validity of
Maryland driver's licenses and state IDs.
Interstate Benefits (IB) crossmatch: Maryland is unable to verify if this is a crossmatch
which is used, but please refer to the statement above regarding the State’s use of the
Quarterly Wage Records Crossmatch.
State Identification Inquiry (SID) and IB8606 enhancements made to the Interstate
Connection (ICON) network crossmatch to prevent concurrent claim filing in multiple
states: The IB8606 form is completed (the determination is scanned and attached) in the
UI-ICON system and sent electronically. DUI staff manually enters the IB8606 forms
that are sent to Maryland for recovery into BEACON which creates an overpayment. The
UI-Icon system is used daily.
Use of a unique identifier to identify claimants instead of using the full SSN: Maryland
identifies claimants with a unique claimant ID number (generated by BEACON), rather
than through the use of their SSN.
Fictitious employer crossmatches: Maryland does not use a fictitious employer
crossmatch at this time. However, DUI has provided training to agency staff on how to
identify fictitious employer schemes. DUI is working to institute an FEIN and name
verification process to catch fictitious employers before they file wages so that claims
cannot be filed using those wages. In addition, Maryland is planning to work with Tiger
Teams pursuant to UIPL 02-22 on a project relating to fictitious employers.
Periodic IT security assessments and audits consistent with National Institute of
Standards and Technology (NIST)-compliant information technology security guidelines:
DUI performs IT security assessments and audits consistent with Division policies
modeled on NIST IT security guidelines.
Adequate internal controls to protect the integrity and security of state assets: BEACON
has separate portals for claimants, employers, and staff. Within the staff portal, DUI staff
have access to new features in BEACON that are determined by their job functions and
security level. Staff receive training and sign an ethical agreement to ensure compliance
with security measures. DUI performs IT security assessments and audits consistent with
Division policies modeled on NIST IT security guidelines.
Implement a cross-functional integrity task force to develop and implement state-specific
action plans to reduce UI improper payments: While DUI does not have a formal task
force, DUI staff constantly collaborate to reduce improper payments.
Overpayment Recovery Activities
Benefit Offsets: Due to a settlement agreement entered into as part of litigation,
Maryland has suspended benefit offsets. Maryland hopes to resume offsets this year but
does not have an estimate at this time.
TOP: Due to a settlement agreement entered into as part of litigation, Maryland has
suspended use of TOP. Maryland hopes to resume use of TOP this year but does not have
an estimate at this time.
Cross Program Offset Recovery Agreement (CPORA): Maryland is unable to locate any
records relating to its participation in CPORA but believes it is likely to be a party to the
agreement since Maryland is a participant in IRORA.
Interstate Reciprocal Offset Recovery Agreement (IRORA): Maryland is part of the
Interstate Reciprocal Overpayment Recovery Arrangement (IRORA) under which
participating states recover overpayments for each other. Due to the Interstate Reciprocal
Overpayment Recovery Arrangement (IRORA), Maryland offsets state or federal benefits
to repay CARES Act overpayments in other states. Maryland reduces CARES Act
payments to recover overpayments from a state or federal UI program when a
cross-program offset agreement is in place that requires Maryland to do so and in
accordance with federal law and policy.
Negotiating repayment plans: DUI does negotiate and establish payment plans with
claimants unable to repay the full amount of an overpayment.
Accepting repayments through various methods (e.g., online, via debit/credit card):
Claimants may send repayments via check or money order.
State Income Tax Offset Program: Due to a settlement agreement entered into as part of
litigation, Maryland has suspended use of the State Refund Intercept Program (TRIP).
Maryland hopes to resume use of TRIP this year but does not have an estimate at this
time.
Regarding the other recovery methods (i.e., wage garnishments, civil actions, property
liens, collection agency referrals, credit bureau referrals), DUI is not currently collecting
on overpayments. This pause is pursuant to the lawsuit settlement agreement referenced
above as the reason DUI is not currently offsetting and due to issues with
billing/overpayments experienced after the Division implemented its new system,
BEACON. Any overpayments currently being recovered via these collection methods are
overpayments created prior to BEACON/Pandemic Assistance Period. The Division
anticipates being able to resume recovery of overpayments via these methods in the next
several months.
Implementing a voluntary fraud self-disclosure program: Claimants may self-report fraud
in the way they would report alleged fraud of others, but DUI does not have any
separated voluntary self-disclosure program or forms.
Other recovery methods as determined by state law or policy: All used recovery methods
are described and covered above.
o State use and employer participation in State Information Data Exchange System
(SIDES) (see TEN No. 12-16).
⮚ Provide details on the state’s current usage of SIDES.
⮚ If the state does not currently use all available SIDES exchanges, provide the state’s
plan for how to connect to all SIDES exchanges and an anticipated timeline to
implement each SIDES exchange. Sides Exchanges include:
● Separation Information
● Monetary & Potential Charges
● Additional Fact-Finding
● Determinations & Decisions
● Earnings Verification
● Benefit Charges
⮚ Identify any barriers to SIDES exchange participation, either in state promotion or in
employer adoption.
Maryland offers employers the option to submit reporting information through the State
Information Data Exchange System (SIDES). Employers can use SIDES for requests and
responses to requests for separation information. When claimants refuse employment,
employers can report job refusals within their respective employer portals available
within the BEACON system. Because the system is entirely online, employers can report
job refusals 24 hours a day, which shortens the response time for the initial request for
separation information from employers. The information from SIDES is then reported
back to BEACON which allows for seamless integration into the adjudication process.
Maryland was one of twelve states recognized by the National Association of State
Workforce Agencies (NASWA) for “Dedication to UI Integrity by their Commitment to
Utilizing SIDES.” Maryland has used SIDES since March 28, 2012.
o State strategies designed to facilitate claimants’ compliance with state work search
requirements while also supporting their reemployment such as adoption of the
work search requirements in the Model Work Search Legislation (see TEN No.
17-19).
⮚ Outline the state’s work search requirement and explain state challenges with work
search improper payments.
⮚ Discuss the state’s plan to improve work search compliance by reducing work search
errors and strengthening reemployment.
Unless exempt, Maryland UI claimants are required to complete a registration with the
Maryland Workforce Exchange (MWE), complete at least three valid reemployment
activities per week (one of which must be a job contact), and enter their completed
reemployment activities in the Job Contact and Reemployment Activity Log located in the
MWE. MD DOL’s Division of Workforce Development and Adult Learning (DWDAL) and
Reemployment and Trade collaborated to create a list of Valid Reemployment Activities
for the MWE system in preparation for the reinstatement of the active search for work
requirement.
Valid reemployment activities are intended to help a claimant become reemployed and
remove potential barriers to employment. Qualifying activities include, but are not
limited to: activities completed through the Maryland Workforce Exchange (MWE), such
as setting up a virtual recruiter or completing a skills self-assessment; attending
networking events; creating a résumé in MWE; and attending employment events (e.g.,
job fairs, hiring events) held by the Maryland Division of Workforce Development and
Adult Learning (DWDAL).
Job contacts refer to actions a claimant takes to contact employers in an attempt to
secure employment. Acceptable job contacts include: submitting a job application to an
employer (in person, email, online, fax); interviewing for a job; or completing a
pre-screening for a job interview; among other actions.
Maryland continues to allow claimants who do not have access to technology file proof of
reemployment activities by other means, but the use of MWE is intended to make it easier
for claimants to comply with state work search requirements and thereby become
reemployed more quickly.
● (Topic #2) – State plans and actions to address the state's top three improper payment
root causes in Payment Integrity Information Act (PIIA) 2022.
⮚ Identify the state’s top three improper payment root causes.
⮚ Explain the state’s challenges in reducing improper payments in the top three root
cause categories.
⮚ Discuss the state’s plan to reduce improper payments in each root cause category.
The top three root causes for the improper payment rate are: 1. Benefit Year Earnings, 2.
Other Eligibility Issues, 3. Separation Issues.
In its efforts to address improper payments relating to benefit year earnings (BYE) issues,
Maryland continues to use quarterly, monthly and some weekly cross-matches to help
detect benefit year earnings. Hits generated from the National Directory of New Hires
(NDNH) and State Directory of New Hires (SDNH) are automatically assigned as a daily
work item within the BEACON staff portal to appropriate DUI staff. Also, Maryland has
amended the weekly certification questions to elicit more information from claimants and
emphasize the consequences of failing to report earnings. Individuals can also report
suspected fraud (BYE/wage earning fraud or Identity theft) by emailing
ui.fraud@maryland.gov or by visiting the DOL-OIG Hotline on their website or by
calling 1-800-347-3756.
In its efforts to address improper payments relating to other eligibility issues, Maryland
has contracted vendor LexisNexis to assist with our fraud detection and identity theft
efforts. See above for details regarding LexisNexis tools that have been integrated in the
BEACON system’s claims taking process that run seamlessly behind the scenes to flag
claims that may be potentially fraudulent. The BEACON system also has built in security
protocols to flag potentially fraudulent claims. DUI continues to monitor feedback from
the Claim Centers, BAM audits, BTQ reviews, and the American Job Centers to revise
instructions to its staff and technology contractors to further reduce other eligibility
errors.
In its efforts to address improper payments relating to separation issues, Maryland is
continuing to train its staff to improve both the fact-finding and the adjudication
processes for non-monetary determinations. BEACON 2.0 will help DUI staff with better
system prompts for efficient fact-finding and easier documentation incorporation.
Maryland has also instituted further review of claims adjudication cases which will aid in
training of DUI staff to ensure complete and detailed fact findings of non monetary
determinations. DUI is continuing to encourage employers to participate in the SIDES
program while also educating them about the new features of BEACON. DUI has also
trained its staff and communicated with employers on the new updates to SIDES
regarding fraud reporting. DUI has posted tutorials, videos, and frequently asked
questions about BEACON on its website and on social media regarding SIDES.
Maryland is committed to seek new ways to improve communications with its
stakeholders so that they know their responsibilities.
● (Topic #3) – State coordination and collaboration with the DOL-OIG and other state
and Federal law enforcement agencies to investigate and prosecute UI fraud and
recover overpayments. This should also include state plans to continue providing all
confidential UC information to DOL-OIG for purposes of both investigating fraud and
performing audits.
MD DOL is in contact with the Department of Labor’s Office of Inspector General, Office
of Investigations (DOL-OIG) regularly, assisting with their investigations and/or
referring cases to them for investigation as required. UI claims data is shared with OIG
per a subpoena, and they are sent subsequent refreshed data dumps as requested.
Maryland has a single POC at OIG.
● (Topic #4) – State plans to strengthen program integrity in UI tax operations, including
current activities and plans to identify and prevent worker misclassification, State
Unemployment Tax Act (SUTA) Dumping, and fictitious employer schemes, and
development/use of effective employer audit strategies (i.e., use of remote audits).
⮚ Identify current activities and plans to address:
● Worker Misclassification
● SUTA Dumping
● Fictitious employer schemes
⮚ Development/use of effective employer audit strategies (including, but not limited to,
use of remote audits).
Maryland employers submit their quarterly wage reports via their BEACON portal.
BEACON then crossmatches these records with employees who are collecting UI benefits. If
an employee earned wages during a quarter in which they requested UI benefits, the
BEACON system will create an issue to be adjudicated. Employer forms are sent through the
employer portal, which claimants do not have access to. If the claimant sends in information
or documentation, we check to see if the return address is the employer's or, for example, the
address on the W2 is the employer's.
Because employers and claimants have access to BEACON through different portals, they
use different functionalities within the system. This separation of powers and duties protects
UI integrity from collusion between fraudulent employers and claimants in a way that the
older legacy system did not. Employers who learn that employees have filed for UI benefits
(when they receive a questionnaire about a separation) are encouraged to contact MD DOL
to report the potential fraud.
DUI has invested in computer software to detect SUTA dumping, and Maryland law penalizes
an employer who knowingly withholds or provides false information regarding the transfer of
workforce/payroll from one business entity to another. DUI defines “SUTA Dumping” on its
website and provides information on the best way to avoid penalties for SUTA dumping (to
voluntarily notify the Division when workforce/payroll is shifted from one business entity to
another and to provide information to the Division as required).
DUI has provided training to agency staff on how to identify fictitious employer schemes.
DUI is working to institute an FEIN and name verification process to catch fictitious
employers before they file wages so that claims cannot be filed using those wages. In
addition, Maryland is planning to work with Tiger Teams pursuant to UIPL 02-22 on a
project relating to fictitious employers.
DUI continues to collaborate with other Divisions of MD DOL to address worker
misclassification.
● (Topic #5) – State plans and actions to strengthen internal security and ensure that all
appropriate internal controls and processes are in place and are adequate to assess
internal risks and threats, ensure program integrity, and minimize program
vulnerabilities (see UIPL No. 14-17).
In September 2021, BEACON replaced Maryland’s decades-old legacy system, the Maryland
Automated Benefits System (MABS). BEACON has separate portals for claimants,
employers, and staff. Within the staff portal, DUI staff have access to new features in
BEACON that are determined by their job functions and security level. Staff receive training
and sign an ethical agreement to ensure compliance with security measures. DUI performs IT
security assessments and audits consistent with Division policies modeled on NIST IT
security guidelines.
● (Topic #6) – State plans and actions to evaluate the effectiveness and equity of fraud
prevention and detection, ID verification, and improper payment reduction activities.
State should include strategies to ensure that processes used to detect and prevent fraud
are effective and do not limit the ability for a legitimate claimant to apply for and
become eligible for UC. States implementing or using facial recognition technology in
their ID proofing processes must also report findings from bias testing and provide
updates on efforts to mitigate biases or barriers in this section of the IAP.
⮚ Identify potential barriers that are created by fraud prevention and detection functions
for legitimate claimants. Provide plans and actions designed to mitigate such risks.
⮚ As required in UIPL No. 11-23, states must ensure there is at least one timely,
effective, and accessible non-digital alternative to online ID verification, which
should not be overly burdensome on applicants, limit access to public benefits
programs or the timely receipt of benefits, or stigmatize members of the public in any
way. Provide details on the state’s non-digital ID verification option(s).
⮚ Include how the state flags cases for suspected fraudulent activity and how
investigation resources are assigned, including:
● What risk scoring elements and/or prioritization elements are used.
● How the risk scoring elements and/or prioritization elements are weighted.
● How the state evaluates the weights based on false positives and negatives.
● How risk scoring elements and/or prioritization elements are updated.
● How the state ensures the fraud risk scoring and/or prioritization of cases does not
negatively affect legitimate claimants.
⮚ Include details on how the state measures claimants’ usage of both digital and
non-digital identity verification options, how the state reviews digital services for
false positive and false negatives, and how the state ensures legitimate claimants have
alternative paths to prove their identity and/or resolve issues, including providing a
possible recourse.
DUI Leadership is constantly evaluating fraud risks, considering new fraud risk
management activities, and monitoring data to ensure that the agency is doing all it can
to prevent fraud, both eligibility fraud and ID fraud.
Maryland has participated in national efforts to address UI fraud resulting from
organized identity theft. Staff from the Benefit Payment Control (BPC), Benefit Accuracy
Measurement (BAM), and UI Contributions (TAX) units have attended and completed
Fraud Investigator Training. MD DOL has sought and continues to seek funding to
contract services to conduct fraud investigations and other fraud detection-related
activities. Funding will also be targeted to implement further tools to increase prevention,
detection, and recovery of fraudulent improper payments.
While fraud prevention has increasingly been a focus of MD DOL’s implementation of the
State’s UI program, the agency is aware of equity issues relating to various means and
methods of preventing fraud. MD DOL continues to look for ways to improve equity in
the UI program in the State, including by ensuring there are options for claimants who do
not have access to technology resources to provide identity verification documents in
person at Maryland’s American Job Centers that are located throughout the State.
Maryland does not use facial recognition technology in their ID proofing processes.
● (Topic #7) – State plans and actions to mitigate negative consequences for victims of UI
ID fraud, including ensuring simplified processes to remove the victim’s liability for
overpayments resulting from ID fraud.
⮚ Include details regarding how the state provides a reporting mechanism for UI ID
fraud on their websites, communicates status updates for such investigations, and
takes action to protect the victim when the state determines that UI ID fraud has
occurred (see UIPL No. 11-23 for more details on protecting victims of ID fraud).
⮚ Include the state’s procedures for mitigating negative impacts on the UI ID fraud
victim (e.g., establishing a pseudo claim record, temporarily marking the
overpayment as “uncollectible”, etc.).
DUI’s website contains information regarding how to report suspected identity theft fraud
and resources for individuals who suspect they may be a victim of identity theft.
If an individual contacts DUI and states they did file a claim that was filed in their name
or using their SSN, staff verify the caller’s identity and investigate the claim of identity
theft. If the Division determines that the individual did not file the claim (that identity
theft did occur), the false claim filed is moved to a “dummy SSN,” so that the actual
claimant is able to file a claim if needed.
DUI has participated in national efforts to address UI fraud resulting from organized
identity theft. Staff from the Benefit Payment Control (BPC), Benefit Accuracy
Measurement (BAM), and UI Contributions (TAX) units have attended and completed
Fraud Investigator Training.
● (Topic #8) – If the state has not provided complete and accurate overpayment reporting
on the ETA 227 reports (Overpayment Detection and Recovery Activities), and the ETA
902P report (Pandemic Unemployment Assistance Activities), the state must provide
information on plans for improvement, including timeframes and milestones, for
addressing the issue and ensuring complete, accurate, and timely reporting in FY 2024.
⮚ If the state has submitted all data for the ETA 227 or 902P reports, this section is not
applicable, and the state can input “N/A”.
Reports are being submitted timely.