State Action for the Unemployed
Monday, March 9, 2009PERMALINK: http://www.progressivestates.org/node/22818 [4]
State Action for the Unemployed
On Thursday, the official unemployment rate climbed to 8.1% nationwide [11] as employers shed an additional 651,00 workers last month. Add in sharp rises in the number of involuntary part-time and long-time discouraged workers, and the unemployment rate rose to 14.8%.
Modernizing Unemployment Insurance
The most obvious action states can take for the unemployed is to ensure that their unemployment insurance systems cover as many people who have lost their jobs as possible, tapping all available federal funding resources. Along with the additional funds automatically going to unemployed workers under the recovery plan, there are several steps states can take to modernize their programs, allowing them to qualify for additional federal funds. The National Employment Law Project (NELP) has just released a Concise Guide to Assistance for Jobless Workers [13], which helps states identify and implement modernization initiatives to qualify for additional funds:
Helping the Long-Term Unemployed: States have a new option to help workers who have exhausted Emergency Unemployment Compensation (EUC). States that adopt what's known as a Total Unemployment Rate (TUR) trigger at a rate of 6.0 percent can provide their workers with an additional 13 weeks of Extended Benefits (EB), which are now 100% federally financed. And for states where unemployment exceeds 8 percent, workers will get 7 additional weeks of EB, or a total of 20 additional weeks of benefits.
Health Care for the Unemployed
For the unemployed, often the first crisis they face is losing the health care coverage they had as employees. With funding help from the federal government, states can act to help preserve health care for the unemployed.
Subsidies to Maintain Former Health Care Benefits: COBRA is the federal law that allows laid-off workers to maintain their employer-based health coverage. However, workers must pay the entire premium, which can be prohibitive, particularly in this economy. To shore-up COBRA as a real option for workers and their families, the federal stimulus provides $25 billion in subsidies [15] to help the unemployed afford the COBRA premiums. Additionally, RWJF's State Coverage Initiatives [17] program offers a terrific rundown of what states can do [18] to ensure laid-off workers access to the COBRA subsidies, including supplementing the federal subsidy for low-income workers to decrease the amount they must pay.
Medicaid: With rising long-term unemployment, Medicaid is an ever-important safety net for workers and their families who lose their jobs and their health care benefits. As Families USA explains in a great FAQ [19], to be eligible for the $87 billion in Medicaid recovery funds, states must at least maintain income eligibility levels that were in place as of July 1, 2008 and cannot institute additional barriers to enrolling, nor may they withdraw Medicaid benfits for currently eligible populations. States have until July 1 of this year to roll back any changes that would make them non-compliant with these provisions. The new FMAP calculation includes an across-the-board 6.2% increase and a "hold-harmless" clause delaying or canceling previously scheduled decreases in a state's federal match. Finally, states with higher unemployment rates will receive additional FMAP increases. SCHIP: In addition to Medicaid, the State Children's Health Insurance Program (SCHIP) is emerging as an ever-vital program to ensure that at least the children in unemployed families have reliable and comprehensive health care coverage. Separate from the stimulus package, the recent expansion of the state children's health insurance programs [20] increased federal eligibility for children to 300% of the poverty level. The new law also removes the five year waiting period [21] that legal immigrant children and pregnant women faced in receiving access to coverage and increases funding for state outreach efforts to enroll more children. The twenty-five states including DC that already provide some form of coverage for immigrant children or pregnant women will now receive increased federal funding through higher FMAP rates for existing services if they opt to do so by notifying the Centers for Medicaid & Medicare services of a change in their plans. Others will have to adopt administrative changes or legislation to expand coverage for legal immigrant children and pregnant mothers. However, states can provisionally adopt Immigrant Childrens' Health Improvement Act [21] (ICHIA) as of April 1 and then seek legislation, if necessary, later in the legislative session.
Layoff Prevention and Retraining
In Averting Layoffs and Revitalizing the Manufacturing Economy [22], we highlighted a range of best practices through which states can both work to avert impending layoffs and use rapid-response to help employees get new jobs or enter retraining programs as quickly as possible. There are a number of details and linked resources worth reviewing in the longer piece, but here are a few key approaches worth emphasizing:
Tapping Recovery Funds: States looking to implement some of these programs may be able to tap the $3.95 billion provided for the Workforce Investment Act (WIA) [27] to fund job training and employment services. $2.95 billion of those funds will be distributed to states using standard WIA formulas and $750 million for a new competitive grant program for worker training and placement in high growth and emerging industries. States should also see where they can tap the expanded support [28] for the Trade Adjustment Assistance for Communities program under the recovery program.
Expanding Safety Net Programs
For the neediest Americans, the stimulus package increases funding for a number of safety net programs for the unemployed, especially for Americans who have fallen off the rolls. 
Supplemental Nutrition Assistance Program (Food Stamps): The recovery act includes $20 billion for SNAP, formerly known as the food stamp program, with $295 million for SNAP administrative costs, most of which goes to the states. The state allocation formula will be based on states' shares of SNAP households in the last 12 months (75 percent) and of SNAP increases in last 12 months (25 percent). States are required to track the administrative expenses separately from benefits.
Eliminate Assets Tests on Government Benefit Programs: Currently, many families are struggling, and could benefit by states lifting asset tests and instead simply checking to see if families meet SNAP, TANF or Medicaid income requirements. This would allow a greater number of needy families to benefit from increased federal funding. States are free to set their own asset limits under TANF, Medicaid and SCHIP programs, and, while states cannot completely eliminate the asset limit on food stamps, under the 2002 Farm Bill, they can create "categorical eligibility" for food stamps in some areas for anyone qualifying for a program like TANF for which the state has eliminated asset limits. States that have eliminated assets-based TANF grants like Virginia and Ohio [31] have not experienced significant upticks in abuse of the system. ConclusionEvery month, hundreds of thousands of Americans are being added to the rolls of the unemployed. The recovery plan has put tools in the hands of the states to address these immediate needs, while reforming unemployment, health care, training and safety net programs. ResourcesModernizing Unemployment Insurance
NELP - Concise Guide to Assistance for Jobless Workers [32] Health Care for the UnemployedAcademy Health/ RWJF's State Coverage Initiatives - How States Can Build on New Federal Legislation that Subsidizes COBRA Coverage for Laid-off Workers [18] Families USA - Protecting Unemployed Workers' Health Coverage: What States Can Do [16] Families USA - Frequently Asked Questions about the Temporary Extra Medicaid Funding in the Economic Recovery Package [19] CBPP - In Depth: the Federal Medical Assistance Percentage Provision [34] National Immigration Law Center - Immigrant Childrens' Health Improvement Act (ICHIA) [21] Families USA - Children's Health - CHIP Reauthorization [20] Layoff Prevention and Retraining
Progressive States Network - Averting Layoffs and Revitalizing the Manufacturing Economy: Lessons from the Great Lakes States [22] Expanding Safety Net Programs
Corporation for Enterprise Development (CFED) - What States Should Do: Help Struggling Families and Change the Trajectory of Our Economy [41] 3 Steps Forward1. Tracking the recession: States boost foreclosure programs [49] 2 Steps BackMastheadThe Stateside Dispatch is written and edited by:
Nathan Newman [10], Interim Executive Director Please shoot us an email at dispatch@progressivestates.org [58] if you have feedback, tips, suggestions, criticisms, or nominations for any of our sidebar features.
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