Virginias Debit MasterCard

1
Virginias Debit MasterCard

• UI Directors Conference
• 10/23/07

2
Background

• Payment Method had been checks only
• The Benefits System and supporting business
  processes are 22 years old
• Program and IT Team had little or no experience
  with Electronic Payments
• Check information is generated by the VEC but
  checks are printed by another state Agency
• IT Infrastructure is managed by another state
  Agency

3
Background

• Virginias Department of Treasury established an
  agreement with a Debit Card vendor for State
  payroll purposes
• VEC was encouraged to pay Benefits with the
  same product
• Check processing fees going up
• Federal funding going down
• Political atmosphere
• Katrina

4
Background

• Our IVR and Internet Claims Filing applications
  are supported by vendors
• Proposals for implementing debit cards had to be
  prepared

5
IT Effort

• Process kick-off, mid-January 2006
• From mid-January through March we had almost 1
  FTE allocated to the design, requirement
  gathering, and high-level implementation of
  transmitting files back and forth from the vendor
  
• We began coordinating and installing connectivity
  between our IT Infrastructure Agency and the
  vendor in February 2006

6
IT Effort

• On March 10 we had a significant Legacy system
  issue requiring all Benefits IT staff to be
  pulled. This caused a significant drain on our
  development staff for almost a month.
• In mid-March our second developer joined the
  process to implement a unique identifier for each
  claimant instead of transmitting Social Security
  Numbers through the banking systems.

7
IT Effort

• In May additional IT resources were made
  available to implement
• Unique Identification of Claimants
• Enrollment Requests/Confirmations
• Payments via ACH
• Self Service Options to elect Debit Cards
• Reporting
• Overall Administration

8
IT Effort

• At peak, we had 9 developers (borrowed from
  across the Agency) weaving Debit Cards into our
  legacy systems
• In late May, we were notified that the Agency was
  switching banks effective July 1, but our pilot
  was scheduled to begin in late June

9
Pilot

• Pilot ready June 22
• 4 pilot claimants were hand-walked through the
  enrollment process in early June claimants
  ready
• Our systems were ready
• Our new bank agreed to begin handling our ACH
  transactions before their contract started bank
  is ready
• Vendor systems were being used by other states
  and another Virginia Agency vendor systems ready

10
Pilot

• Decided to go very slowly with debit cards and
  offer direct deposit as another option
• In November 2006 claimants who filed initial,
  additional and reopened claims online were
  mandated to select an electronic payment method
• The claimants failure to select an option
  automatically defaulted them to debit card

11
Unique Requirements

• We started with an 8-day waiting period between
  enrollment and the first payment on the card.
• Ensured the claimant had the card before a
  payment is posted
• Enroll the claimant at the time of the filing a
  claim
• Claimants are required to enter their own banking
  information
• Customers can toggle back and forth between Debit
  Card and Direct Deposit without requiring
  re-enrollment

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Lessons Learned

• One Debit Card can be used for multiple state
  programs across the Commonwealth
• Canadian banks charge very high user fees
• Need to market to claimants , employers and
  staff, takes a while to grasp the new concept
• Claimants need to understand that it takes 2
  business days for money to be deposited on
  account, one of the biggest problems
• Stipulate in contract that you want to reverse
  ACH payments after 90 days, for unactivated cards

13
Lessons Learned

• Understand the length of time between enrollment
  and cards appearing in customers mail boxes
• Come up with a marketing plan so claimants know
  not to throw their debit card away, that looks
  like a solicitation from a credit card company
• Come up with processes to handle rejects that
  occur from the bank

14
Successes

• We pulled together Program and Technical teams
• Claimants enroll themselves into either debit
  card or direct deposit by either IVR or Internet
• The number of redeposits and reissues have
  dropped
• We now have Direct Deposit and Debit Card as ACH
  options for UI, DUA, TRA and ATAA
• Currently
• 36.8 of payments paid via Debit Card
• 56.2 of payments paid via Direct Deposit

15
User Fees

• Two free ATM cash withdrawals and one free teller
  withdrawal, per month, at a Wachovia bank.
• Fee of 1.50 after two free ATM
• Fee of 1.50 each time at other ATMs
• Fee of 2.50 after one free teller
• Fee of 0.65 every balance inquiry at ATM
• Fee of 0.50 after two free ATM denial

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User Fees

• Fee of 0.50 for after five free IVR monthly
  account access
• Fee of 5.00 for card replacement
• Fee of 15.00 for expedited card
• Fee of 2.50 each time for International
  Transactions
• Surcharge fees may apply

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User Fees

• No fees when using as you would a check card for
  purchases at the grocery store, etc. and you can
  request cash back.
• After 12 months of inactivity the card holder
  will begin deducting 1.25 per month from the
  balance in the account.

18
Notification To Claimant

• The claimant is mailed a letter with some general
  information, next steps, personal identification
  numbers and how to avoid fees on your debit card.

19
Trish Williams, Chief of BenefitsVirginia
Employment Commission

• Phone [phone]
• E-Mail Trish.Williams_at_vec.virginia.gov