SB 893
Department of Legislative Services
Maryland General Assembly
2021 Session
FISCAL AND POLICY NOTE
Third Reader - Revised
Senate Bill 893 (Senator Rosapepe)
Finance Economic Matters
Unemployment - Insurance Revisions and Special Enrollment Period for Health
Benefits
This emergency bill requires the Maryland Department of Labor (MDL) to take specified
actions in administering the State unemployment insurance (UI) program; most of the
requirements relate to enhancing applicant and claimant services and enhancing general
program administrative procedures. MDL must begin implementing a system through
which a claimant may consent, as part of any weekly claim certification, to the sharing of
relevant collected information by MDL with the Maryland Health Benefit Exchange
(MHBE) and the Maryland Department of Health (MDH) to determine whether the
individual qualifies for free or low-cost health insurance and, if so, to help the individual
enroll, subject to specified requirements. MHBE must open a special or other enrollment
period for an individual who consents to share the information. The bill also requires MDL
to provide demographic and related claimant information to the chief elected official of a
county upon request, subject to specified requirements.
Fiscal Summary
State Effect: Federal fund revenues and federal/general fund expenditures for MDL
increase for additional administrative funding to implement the bill, beginning in FY 2021
(the general fund portion likely totals at least $150,000 across FY 2021 and 2022, and
likely general fund expenditures for an annual customer service evaluation continue
indefinitely). Revenues and expenditures for MDL further increase to the extent that
demographic information is requested by counties beginning in FY 2021. Other agencies
can likely handle the bill’s requirements with existing budgeted resources, as discussed
below. This estimate does not include any effects associated with health care enrollment.
Local Effect: Local government expenditures increase minimally to the extent
UI claimant information is requested of MDL. Revenues are not affected.
Small Business Effect: Minimal.
 Analysis
Bill Summary:
Required Actions in Administering the Unemployment Insurance Program
In administering the State UI program, MDL must take the following specified actions:
 secure equal access for individuals by (1) ensuring that an individual contacting
MDL has adequate and timely access to language, interpretive, and translation
services; (2) for individuals with disabilities, incorporating specified accessibility
features and providing notice of alternative accessibility options; and
(3) conspicuously providing claimants with the option to select, at the beginning of
the application for UI benefits, that paper-based notices of department action be sent
by mail;
 establish procedures that require an individual who has filed an initial claim for
benefits to be provided with a status update on the claim by MDL staff or contractors
through telephone or email, at least once every three weeks until the initial benefits
are paid or the initial claim is denied, whichever occurs first;
 by July 1, 2021, and each July 1 thereafter, contract with an external customer
service quality evaluation vendor to measure (1) the clarity and organization of all
public communications, including materials posted on MDL’s website or mobile
application; (2) the achievement of the customer service standards required under
the bill and MDL’s plan to meet those requirements; and (3) other customer service
metrics that MDL and the vendor agree are important;
 ensure that the application for UI benefits explicitly and conveniently provides
applicants with the ability to select the method of payment;
 establish systems, processes, and procedures that enable an individual filing a claim
for benefits to track the status of a claim, including the anticipated timeline for the
resolution of each particular claim;
 establish and maintain a plan for ongoing investment in technology;
 establish standards for the timely processing of claims for benefits, with 92%
completed within 21 days after receipt of application and 97% of claims that require
adjudication resolved within eight weeks after receipt of the initial application;
 establish a single point of contact within MDL to oversee and prioritize the
resolution of claims that have not been completed within eight weeks; and
 track the percentage of laid-off workers who file for UI benefits, establish a goal for
a UI recipiency rate, and publish related information on the MDL website quarterly.
The Secretary of Labor is also required to notify the claimant of the basis for the recovery
of previously paid benefits, including any evidence that the Secretary used to make the
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determination and the appeal rights available to the claimant. These requirements are in
addition to other existing information that must be provided to the claimant in such
circumstances. Additionally, the Secretary must allow a claimant to appeal a determination
regarding the recovery of benefits within 30 days after the mailing or other delivery of the
notice. Under current law, these decisions are appealable, but an appeal must generally be
filed within 15 days; there is also a related, but separate, waiver process specifically for
overpayments.
Unemployment Insurance and Enrollment in Health Insurance Plans
By September 1, 2021, MDL must begin implementing a system through which an
individual who has filed a claim for benefits may consent, as part of any weekly claim
certification, to the sharing of relevant collected information by MDL with MHBE and
MDH to determine whether the individual qualifies for free or low-cost health insurance
and, if so, to help the individual enroll. The consent request must be prominently displayed
on the weekly UI claim certification form.
Before the system begins to operate, MDL must enter into a memorandum of understanding
with MHBE and MDH that enables the system to operate in compliance with all applicable
federal and State requirements related to privacy, data security, and funding. MDL must
cooperate with MHBE and MDH to claim the maximum amount of available federal
funding for the establishment and operation of the system, and the three State agencies are
authorized to take specified actions to facilitate the most efficient implementation of the
system. By December 1 each year, MDL must report to the Joint Committee on
Unemployment Insurance Oversight on the implementation of this requirement.
MHBE must open a special or other enrollment period for an individual who consents to
share information in accordance with the above provisions, subject to specified
requirements.
Information Sharing with Local Governments
On request and for purposes consistent with the bill and other specified legislation, MDL
must provide to the chief elected official of a county demographic data and the addresses,
occupations, and last known employers of UI recipients who live in that county. A chief
elected official of a county may (1) share the provided information with the governing body
of the county and (2) request the information on behalf of a political subdivision within the
county and provide the information to the political subdivision. The Secretary may adopt
regulations to carry out these provisions, as specified.
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Call Center Staffing Plan
By June 1, 2021, MDL must submit to the General Assembly a detailed, comprehensive,
and funded plan to ensure that call center staffing is adequate to allow an individual to
reach a departmental employee or contractor to ask questions.
Identification and Incorporation of Changes to Federal Regulations and Guidance
By June 1, 2021, MDL must identify all changes in federal regulations and guidance that
would expand access to unemployment benefits or reduce bureaucratic hurdles to prompt
approval of unemployment benefits. By July 1, 2021, MDL must revise State UI rules and
practices to encompass any changes in federal regulations and guidance.
Current Law: Many of the requirements addressed in the bill are administrative in nature
and relate to enhancing the claimant experience or MDL’s ability to effectively administer
the State UI program. Some metrics, such as timely first payment of benefits, are federal
performance requirements. More information on federal performance requirements is
available on the U.S. Department of Labor’s website, including core measures.
Claimants have the right to appeal any determination or redetermination of their UI claim,
and generally must do so within 15 days after notice of the determination or
redetermination is mailed. MDL regulations allow an extension for good cause shown.
Claimants also have a right to request a waiver of any overpayment that results from a
determination – which is not the same as an appeal – and may do so within 30 days of the
notice of overpayment. After 30 days, and for up to one year, a claimant may request a
waiver of any overpayment if the claimant can show good cause for not meeting the 30-day
requirement. If a claimant appeals the underlying determination that caused the
overpayment, the request for a waiver will be stayed pending appeal.
MDL advises that, while there is no statutory or regulatory basis for the right to appeal the
denial of a request to waive an overpayment, the Board of Appeals issued an opinion that
created an appeal right for such denials. The Division of Unemployment Insurance has
followed that opinion and, when the Secretary denies a waiver request, has provided notice
to claimants of their right to appeal the denial.
For a general overview of the State’s UI program, see the Appendix – Unemployment
Insurance.
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State Fiscal Effect:
Maryland Department of Labor Administrative Costs
A precise estimate of MDL’s administrative costs cannot be made at this time, given the
scope of the bill, the potential methods of implementation, and whether and to what extent
some requirements are already being met. Except for the local data sharing requirement,
discussed separately below, if existing federal administrative funds are insufficient,
additional above-base federal funding will be provided to the extent that the expenses are
allowable, beginning in fiscal 2021. General funds are needed to cover any remaining costs.
Not all costs under the bill will be reimbursable. For example, MDL advises that the MHBE
information sharing requirement is not eligible. MDL’s estimated costs associated with the
MHBE requirement are $100,000 in programming costs (fiscal 2022), plus a cost allocation
for staff time (beginning in fiscal 2022). Likewise, the annual customer service
assessments, which are estimated to cost $15,000 to $100,000 each, are likely not eligible.
These are not necessarily the only administrative costs ultimately required to be paid for
with general funds.
Local Data Sharing
MDL advises that the requirement for the department to share certain claimant data with
counties upon request likely conforms to federal requirements, but that associated costs are
not reimbursable from the federal government. MDL will charge counties that choose to
request the data a fee to cover the costs of providing the data. Typical fees have a fixed
component of $5,000 to $10,000 and then a variable component based on the number of
requests received. Accordingly, revenues and expenditures for MDL increase beginning as
early as fiscal 2021 by an unknown, but likely modest, amount to the extent counties
request UI claimant data as authorized. Whether or not the Special Administrative Expense
Fund in the department will be used to account for the costs and collect the related revenues
is unknown at this time; regardless of the fund type, the effect on State finances is neutral.
Maryland Health Benefit Exchange
MHBE anticipates costs of about $360,000 to implement the information sharing
arrangement with MDL to receive information, process data, send notices, handle
exceptions, and perform Medicaid reporting. An additional one-time cost of $40,000 is
expected for information technology system modifications to allow for a special enrollment
period for UI claimants. After initial implementation, costs are estimated at $168,600
annually. Initial implementation costs are assumed to be incurred in fiscal 2022, consistent
with the September 1, 2021 requirement to begin implementation. MHBE can likely absorb
these costs within existing resources, as the $35.0 million annual appropriation for MHBE
has not been fully spent in recent years.
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Local Expenditures: Under the bill, MDL must provide certain UI claimant information
to the chief elected official of a county upon request, subject to specified requirements. As
discussed above, MDL will charge counties a fee to cover the costs of providing the
information. Therefore, local government expenditures increase minimally to the extent
UI claimant information is requested of MDL.
Additional Information
Prior Introductions: None.
Designated Cross File: None.
Information Source(s): Maryland Department of Labor; Department of Budget and
Management; Maryland Department of Health; Maryland Health Benefit Exchange;
Department of Legislative Services
Fiscal Note History: First Reader - March 1, 2021
rh/ljm Third Reader - March 26, 2021
Revised - Amendment(s) - March 26, 2021
Revised - Updated Information - March 26, 2021
Analysis by: Stephen M. Ross Direct Inquiries to:
(410) 946-5510
(301) 970-5510
SB 893/ Page 6
 Appendix – Unemployment Insurance
Program Overview
Unemployment Insurance (UI) provides temporary, partial wage replacement benefits of
up to $430 per week to individuals who are unemployed through no fault of their own and
who are willing to work, able to work, and actively seeking employment. Both the federal
and state governments have responsibilities for UI programs. Generally, funding for the
program is provided by employers through UI taxes paid to both the federal government
for administrative and other expenses and to the states for deposit in their UI trust funds.
Using federal tax revenues, the UI program is administered pursuant to state law by state
employees. The Maryland Department of Labor’s Division of Unemployment Insurance
administers the State’s UI program.
Each state law prescribes the tax structure, qualifying requirements, benefit levels, and
disqualification provisions. These laws must, however, conform to broad federal
guidelines.
Employer Contributions
Most Maryland employers pay State UI taxes, although State and local governments and
some nonprofit organizations reimburse the Unemployment Insurance Trust Fund (UITF)
for claims paid in lieu of paying taxes. Therefore, for most Maryland employers, the State
UI tax rate is a function of:
 the employer’s specific unemployment claims history; and
 the applicable tax table, which is based on the State’s UITF balance and applies to
most taxable employers.
Exhibit 1 shows the range of State UI taxes a typical employer owes based on the tax table
in effect; there are other rates for new employers and in other limited circumstances. State
UI taxes and reimbursements are typically due quarterly; however, Chapter 39 of 2021
allows employers with fewer than 50 employees to defer 2021 State UI tax payments or
reimbursements until January 31, 2022, and authorizes the Secretary of Labor to offer a
similar deferment in 2022. The Act, in conjunction with a recent executive order, also
generally prevents UI claims made during the COVID-19 pandemic from increasing an
employer’s taxes – although Table F, with its broadly higher rates, is in effect in 2021.
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 Exhibit 1
Tax Tables and Applicable Employer Tax Rates
As of Sept. 30, if the
Trust Fund Balance, Trust Fund
As a Percentage of Balance Then Next Year’s Tax Annual Tax Per Employee
Taxable Wages ($ in Millions) Rates Range from… (Rate x $8,500)
Tax No Single No Single
Table Exceeds Up to Exceeds Up to Claims Claim Up to Claims Claim Up to
A 5.00% N/A $995.8 N/A 0.30% 0.60% 7.50% $25.50 $51.00 $637.50
B 4.50% 5.00% 896.2 $995.8 0.60% 0.90% 9.00% 51.00 76.50 765.00
C 4.00% 4.50% 796.6 896.2 1.00% 1.50% 10.50% 85.00 127.50 892.50
D 3.50% 4.00% 697.1 796.6 1.40% 2.10% 11.80% 119.00 178.50 1,003.00
E 3.00% 3.50% 597.5 697.1 1.80% 2.60% 12.90% 153.00 221.00 1,096.50
F 0.00% 3.00% 0.0 597.5 2.20% 3.10% 13.50% 187.00 263.50 1,147.50
Notes: Fund balance threshold dollar amounts are based on the 2020 taxable wage base and are subject to change
each year. A “single claim” represents the tax rate applicable to the lowest possible rate associated with nonzero
(.0001 to .0027) benefit ratios. Taxes are applied to the first $8,500 earned by each employee, each year; compensation
less than that amount reduces taxes owed accordingly. Table F is in effect in 2021 and is likely to be in effect for at
least two more years; Table A had been in effect since 2016.
Source: Department of Legislative Services
Benefit Payments
Generally, the weekly benefit amount