There are many reasons to engage a third party agency (TPA) to optimize your unemployment claims management. The main advantages fall into three categories: saving time, saving money and improving compliance.
Save Time, Money, Improve Compliance
Unemployment tax is one of the few taxes employers are able to lower. To do that, you must have a team who can proactively manage the unemployment claims process from hire to termination, including documentation, training and timely response to claims. Additionally, you need a defined system in place to support the claims management process. Not all companies have the internal resources to handle unemployment claims effectively.
Meet Strict UI Integrity Law Requirements
Though cost has historically been the key driver for employers to seek help with claims management, compliance now plays a larger role. This is due to federal requirements for all states to enact UI Integrity legislation by October 22, 2013. With the new state laws, agency standards for employers’ handling of claims have become more stringent, and there is now a complex patchwork of standards that vary from state to state.
While compliance demands for claims management have increased, HR professionals are already spread thin managing other responsibilities. Often, employers find it simply makes the most sense to outsource their claims management to a TPA who specializes in the area and knows it inside and out.
Benefits You Can Enjoy by Using a Third Party Provider:
Financial Benefits (Save Money, Stay Compliant)
- Save money vs. paying someone to do it in-house
- Improved rate of compliance and accuracy (cost avoidance)
- Lower long-term costs:
- More aggressive monitoring of employer accounts to avoid erroneous charges
- Expert attention to your claims to avoid paying for fraudulent or wrongful claims
- Get your best employer experience rating to reduce your unemployment tax rate
Operational Benefits (Save Time & Resources, Get Better Outcomes)
- Save time vs. doing it all yourself
- Free up resources to focus on more profitable activities and core business areas
- Strengthen your processes with an outside review of your personnel policies and procedures
- Improve your HR & Management abilities with training on hiring, firing and discipline
- Gain an advocate who has established relationships with agencies and knows how they work
- Manage complex UI Integrity rules across states easily with someone actively tracking them
- Reduce your workload and your stress
If any of these descriptions apply to your organization, you are likely to benefit measurably from outsourced unemployment claims management:
- Operations in multiple states
- High employee turnover rates
- Nonprofit employer
- Small to mid-sized employers with fewer resources
- Larger employer looking for a partner solution to enjoy economies of scale
- Poor cross-departmental, cross-functional communication
- Inconsistencies due to mergers, acquisitions or leadership changes
- Lack a streamlined claims management system
- Struggling to keep up with constantly-changing laws across thousands of U.S. tax jurisdictions
How Can You Get a Provider You Can Trust?
AUTO member agencies are active advocates of unemployment insurance education and best practices. We are committed to serving employees and employers alike with integrity and the highest standards in unemployment insurance (UI) cost management. Contact any of our members for a consultation about your situation.