What To Expect Under Personal Reemployment Accounts PRAs

What To Expect Under Personal Reemployment Accounts (PRAs): Predictions and Procedures Presenter: Irma Perez-Johnson USDOL Workforce Innovations Conference Philadelphia, PA – July 11 -13, 2005

Key Elements of PRA Programs l Targeted at UI recipients likely to exhaust their benefits l Contain up to $3, 000; amount set by states l As voucher, can be used to pay for range of intensive, training, and supportive services l Bonus eligibility based on reemployment within 13 weeks of UI receipt and 6 -month retention l Bonus paid in 2 installments; amount based on unspent PRA funds

Key Questions Addressed l What are the predicted impacts of the PRA reemployment bonus? l What are likely customer responses to the bonus and voucher components of PRAs? l What challenges may states and local areas encounter in implementing PRAs? l What resources exist to support, facilitate PRA implementation?

Information Sources l Reemployment bonus demonstrations l Evaluation of the ITA Experiment l Research on Worker Profiling and Reemployment Services (WPRS) l Research on UI population

Predicted PRA Bonus Impacts l Bonus receipt rates expected to vary by PRA amount – $3, 000 PRA 31 - 33% bonus receipt rate – $1, 000 PRA 20 - 29% bonus receipt rate l UI impacts also expected to vary by PRA amount – $3, 000 PRA – 1. 66 weeks per PRA recipient – $1, 000 PRA – 1. 09 weeks per PRA recipient l Predicted PRA impacts larger than in prior demonstrations – PRA bonuses more generous – First PRA bonus installment paid immediately l Impacts on aggregate UI payments could be greater at lower PRA amounts – $3, 000 – 1. 66 weeks per PRA recipient – $1, 000 – 1. 09 weeks per PRA recipient, but 3 times the number of PRA recipients (– 3. 27 weeks)

Other Considerations in Setting PRA Amount l Tradeoff between PRA amount and number of offers l Tension between bonus and service voucher features of PRAs l Variation by local areas

Likely Customer Responses l Expect PRA customers to attempt to qualify for bonus first l PRA customers unlikely to purchase substantial counseling assistance l Customers interested in training likely to purchase it l Extent of PRA use for support service purchases is unknown l Expect PRA expenditures close to award amount

Key Challenges in PRA Implementation l PRA concept is new l Uneven experience and awareness of resources l Desire to keep procedures simple l Requires coordination across distinct workforce development functions

Building Blocks Exist to Support, Facilitate PRA Implementation PRA Program Functions Identify and call-in PRA eligibles One-Stop Equivalent Identify and call-in WPRS eligibles Review and approve bonus None but done under prior claims bonus demonstrations Review and approve PRA expenditure requests Review and approve ITA expenditure requests Process payments and track PRA balances Process payments and track ITA balances

PRA Demonstration l Seven states (FL, ID, MN, MS, MT, TX, WV) l Two-year implementation period l Programs launched in spring 2005 l Expect about 2, 200 total PRA recipients l PRA award set at $3, 000 by all states

Evaluation of PRA Demonstration l Examine implementation process l Identify successful strategies and likely replication challenges l Examine patterns in acceptance and use of PRA funds l Describe UI, employment, and retention outcomes for PRA recipients