COVID era Pandemic Unemployment Assistance (PUA) program appeals seem to be tailing off to some definite end from their heyday of the last couple of years. As it appears to be coming to an end, I’m sure to the cheer of many, this is a good time to reflect on the program and what it achieved — to question its success from the perspective of one attorney that litigated and lived through many of these appeals on the behalf of his clients.
The PUA program was rolled out in May of 2020 to provide benefits to those that would not have traditionally qualified for them — self-employed, contractors, and those that did not have enough work credits to get traditional unemployment benefits.
The Michigan Unemployment Insurance Administration (UIA) universally paid the claims of all applicants who selected that they were separated from work because of COVID without fully adjudicating the claim. Apparently, this was a policy decision made by the UIA as it would not otherwise be able to get benefits to claimants in a timely manner to save them from the joblessness caused by COVID. This would later cause issues when the UIA would, often times months or years later, turn around and deny these claims. It also should not be lost that the ease by which applicants could be granted benefits was likely a major factor in the program being a target for fraud. Though it is clear the UIA made a fair effort to validate claimant identification.
The UIA first fashioned PUA eligibility based on a self-attestation of claimants stating COVID as causing loss of work. It would later have to retract four of its original criteria because they were not in compliance with Department of Labor (DOL) regulations. People qualifying under these four (the largest of which was those seeking work prior to COVID) would have to either requalify under a different criterion or be disqualified and owe back thousands of dollars of benefits. While the UIA publicly stated it would waive any such overpayments, in reality there were many instances in which it did not waive restitution. Moreover, many took the UIA’s announcement to mean that they were exonerated from any overpayment restitution per se without a specific determination in their case, which was an inaccurate interpretation.
However, in the process of attempting reverse its monetary qualification for claims, the UIA hit a road block. It was without jurisdiction to re-determine its qualification of claims beyond 30 days without good cause and beyond a year as an absolute cutoff date. There does not appear to be a case in which the UIA was able to show it had good cause for such a re-determination. Thus, many who should not have qualified for PUA were granted and paid benefits and the UIA was without recourse to demand restitution of benefits.
In the meantime, despite many claimants continuing to dispute the reversal of their claims through the administrative appeal process, which by this time was very delayed by the prevalence of disputed claim denials, the UIA began demanding restitution payments or else claimants would face garnishment of wage and tax return payments, or worse. This would ultimately result in a class action lawsuit being filed against the agency, which it would later settle for $55 million.
The UIA didn’t require proof of pre-covid connection to the workforce until mandated by the DOL via the Continued Assistance Act (CAA) in 2021. When it did roll out this evidentiary requirement for claim qualification, the information request it developed contained incorrect and misleading direction that claimants could simply provide 2019 calendar year information and very specific items to show a pre-covid connection to the workforce. In fact, the pandemic did not occur until March 2020 and showing a connection to the workforce would at least require documentation from that time. Moreover, the criteria listed such items as W-2s or tax returns as proof of connection to the workforce. However, these items do not show when the work was completed and, as such, are not proof of connection to the workforce circa March 2020.
This left claimants quite confused when they would submit such documents and the UIA would deny their claims. Again, the UIA was often very delayed in reviewing these documents (some still occurring to date) and would issue a disqualification months or years later, while the claimant had exhausted the claim in 2021. Many of these cases would go onto to be in appeals for years as administrative law judges issued wildly different opinions as they had no rubric by which to resolve these matters. The Appeals Commission would later fashion a common law standard, for lack of a better term, and said cases would often be remanded to the hearing level for the claimant to validate their claim before a judge.
Beyond these larger issues, a number of ancillary matters arose causing the UIA to deny more claims (again many months after first granting benefits) where the law was not clear. One specific issue was whether part-time, disabled or student workers were eligible for the PUA program. After much litigation and I’m sure time, money and consternation of such claimants, it was found that they were eligible if they could show some pre-covid connection to the workforce; even if it was relatively insignificant.
Another common denial was for lack of availability or ability to work. While lawmakers amended the Unemployment Act to allow workers who otherwise would have been found to have voluntary quit their employment and qualify for benefits when it was COVID related, it did not provide such allowance under the able and available to work requirement. This caused some havoc. For example, a worker may have had to quit their job because of their child’s school closing and lack of available child care that occurred as a result of COVID, but they still would have to be able to show they were available for work. This would most often result in speculation of whether the claimant could work nights or weekends or had others that could watch their child during off hours.
A universal solution to this was never explored. Rather, these cases had to be challenged one-by-one, with each standing on its own merit and peculiarity of facts. The suitability of alternative work or work schedules was explored ad nauseum without the UIA or the legislature, in my opinion, fully comprehending the oxymoronic position in which they placed such claimants – allowing them to quit work because they could not complete work as a result of COVID factors, but then requiring them to show they could complete said work.
Lastly, if it has not been clear yet, in my opinion the UIA was understaffed and not trained or capable of properly administering claims. Prior to COVID, a claim may face a denial, which the claimant could appeal through the administrative appeal process, and there would be finality to their claim, win or lose. However, since COVID many claims now receive multiple challenges at different dates (with the UIA issuing a new case each instance), apparently from different claims analysts, which results in the claimant having to go through the administrative appeal process each time for each case. The language of each determination often appeared contradictory to the language in others and in some instances simply to be beyond the understanding of persons unfamiliar with the UIA’s terminology. To be sure, I’ve spent many hours rifling through claimant accounts attempting to reconstruct exactly what has occurred and where their claim stands. Many a claimant believed they were a personal target of claims analysts for this type of scorched earth approach to claim administration.
With all these problems one may conclude the PUA program was a failure. I’m not so quick to agree. While it certainly could have run more efficiently, with more clearly defined criteria and user friendliness, the funds the program disbursed likely saved hundreds of thousands of residents from abject poverty during its tenure. At the same time, I’m not so sure the process needed to be as adversarial as it ultimately became. Afterall, it is a social assistance program, and it often occurred to me that claimants who were paid benefits should not have been forced to defend themselves or pay back what was often tens of thousands of dollars that they did not have. Claimants often stated that the UIA should not have issued them benefits if they did not qualify, and they could not grasp how the UIA could attempt to reclaim benefits paid months or years prior.
Michigan does not have an extensive history of issuing emergency benefits as it is not in an area that suffers mass unemployment all that much. It is safely out zone of many natural disasters. However, it may be that very inexperience that caused mishandling of claims. For its part the UIA promises a more robust system as a result of the lessons learned in administering pandemic-era claims. Hopefully, said changes are adopted to avoid future mishandling.
