Kentucky has awarded a contract to Deloitte Consulting to replace its outdated unemployment insurance system, which struggled during the COVID-19 pandemic due to a surge in jobless claims. The six-year contract is worth $55.5 million and will be funded by $85 million approved by lawmakers. The new system is expected to be fully implemented by 2028, with an emphasis on improving accessibility and claims processing times while safeguarding against fraud.
The state faced delays in finding a contract partner to replace the aging technology for claims processing, with concerns about cybersecurity causing the initial search to be extended. After the selected vendor failed to sign and return the contract, another solicitation was canceled in 2022. The current system, implemented almost 40 years ago, struggled to handle the influx of jobless claims during the pandemic, leading to significant delays for Kentuckians seeking assistance.
Governor Andy Beshear emphasized the importance of the new system in meeting the needs of Kentuckians by improving accessibility, claims processing times, and preventing unemployment insurance fraud. The upgraded system aims to provide easier access for individuals filing jobless claims and staff members assisting those seeking employment. Beshear acknowledged the challenges faced by the state’s unemployment system, attributing some of the issues to budget and staffing cuts before he took office in late 2019.
The delays in processing jobless claims became a political problem for Beshear, who accepted responsibility for the state’s response to the pandemic-related surge in unemployment. Despite the challenges, Beshear highlighted the state’s economic development growth during his tenure as governor, which he campaigned on during his successful reelection bid. Republican lawmakers credit the economic growth to policies enacted by the GOP-dominated legislature in recent years, reflecting differing perspectives on the state’s economic progress.
The new system is expected to address the shortcomings of the existing technology and provide a more efficient and reliable platform for processing unemployment claims. State officials anticipate that the replacement system will offer improved functionality for both claimants and staff members, ensuring a smoother and more secure process for those in need of jobless assistance. As Kentucky moves forward with the implementation of the new system, the focus remains on enhancing the overall effectiveness and accessibility of the state’s unemployment insurance program.
