According to Lisa Henley, Director of Electronic Payment Systems for the Oklahoma Department of Human Services, all state government benefits Oklahomans receive - food stamps; child care services; child support; aid to the aged, blind and disabled; sales tax rebates; and Temporary Assistance for Needy Families payments - are now put electronic-ally on reloadable MasterCard Worldwide-branded prepaid cards.
Affiliated Computer Services Inc. facilitates those payments with what it calls electronic payment cards (EPCs). ACS said EPCs have been around for nearly two decades and were initially rolled out to electronify food stamp programs. But only in recent years have states been utilizing EPCs for other services.
Dave Turner, Vice President of State and Local Solutions for ACS, said the benefits of EPCs are many. "From the state's perspective, they're able to reduce that check printing cost, save administrative money and actually plow it back into benefits for people," he said. "So they're able to serve more people with the same amount of money." ACS reported that governments can save an average of $2.00 per check with EPC.
For a state that issues 100,000 checks a month, ACS tabulates the cost savings at $200,000. ACS said it saved North Carolina $4 million in 2007 when the Tar Heel state went to EPCs to deliver unemployment insurance. For recipients, the plusses are equally numerous. Individuals receive payments faster and in a more timely, secure fashion, Turner said. Because they are MasterCard-branded, cardholders can use their EPC cards wherever MasterCard is accepted - online, over the phone or in brick-and-mortar retail environments. Furthermore, the safety aspect of EPCs cannot be underestimated.
"Our elderly people actually have crimes committed against them," Henley said. "Everybody knew that the checks would actually be in their mail box on the first day of the month. And we had a lot of them that were victims of those crimes. You don't have that now. Nobody is getting hit over the head, as they say. It is a big benefit."
The EPC program through ACS began in the summer of 2007. According to Henley, one recurring problem that spurred the state of Oklahoma to expand its EPC services was an issue it had with its Aged, Blind and Disabled program. The program involves 90,000 checks issued once a month, Henley said. But, on more than one occasion, that batch of checks was set aside while other checks were processed because Oklahoma's DOHS did not have the personnel to handle the workload.
"So our clients did not receive those checks until well into the month and they should have had them by the first [of the month]," Henley said. "And if you're depending on that cash to purchase your medical prescriptions - which many of our clients are - it's absolutely intolerable that they had to wait." But, with the EPS solution, that problem has gone away. "They never wait with this," Henley said. "They know exactly what day and what time the benefits will be posted." Not only has the automation made payment disbursals more efficient and reliable, it has also helped the DOHS keep better track of its clients.
"There's a lot of personnel involved in mailing checks because the populations that we serve are very mobile and are very bad about notifying their case workers when they move," Henley said. "Well, I assure you, with this system we now know where our clients live because they're not going to get their debit cards otherwise.
"We've saved so much in time and effort on our own employees' parts that it makes the [monetary] savings seem nominal." But the monetary savings are substantial nonetheless. Henley said the state of Oklahoma saves over $1 million annually on its EPC program. And Henley believes savings will rise as more government services go electronic.
Turner pointed out that EPC programs have applications beyond government payments for people in need, including pension, child support and home health care payments. "When you have care workers coming in to care for people to try and help keep them healthy and out of the hospital, for instance," Turner said. "How do you pay those people?"
Turner claims most states still rely on inefficient paper checks to pay home care workers. Additionally, Turner said only half of the states have migrated their unemployment benefit programs to prepaid cards or direct deposit.
In addition to Oklahoma, ACS has signed up Mississippi, North Carolina, Georgia, Ohio and Virginia for EPC programs. The last two states have completely transitioned from paper checks to EPC. Turner believes that trend will only gain momentum. "We're seeing a lot of activity," he said. "And a lot of it is driven by policy, sometimes at the federal level." Turner said the federal government stopped reimbursing state agencies for the entire postage costs associated with mailing checks in 2007; that move was an impetus for state governments to "look at creative ways to try and cover that switch in financial burden."
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