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Indexing unemployment benefits
| Unemployment insurance |
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| • Terms and definitions • Court cases • Unemployment insurance programs in the states • Reform proposals related to unemployment insurance • Reform activity in the states related to unemployment insurance • Index of articles about unemployment insurance |
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Indexing unemployment insurance program benefits is an approach to calculating benefits under the joint federal-state unemployment insurance program that ties benefits to current economic conditions with the goal of moving benefit recipients back into the workforce during times of low unemployment. State unemployment programs that index their benefits provide shorter periods of benefits during times of low unemployment and longer periods of benefits during times of high unemployment.[1]
Eleven states had implemented some form of indexing unemployment insurance program benefits as of February 2025:[1]
Background
The joint federal-state unemployment insurance program provides temporary monetary payments to individuals who have lost employment through no fault of their own. The federal government oversees the general administration of state unemployment programs. The states control the specific features of their unemployment programs, such as eligibility conditions and length of benefits.[14]
States index their unemployment insurance program benefits through the passage of legislation tying the length of benefits to the state's unemployment rate.[14]
States that index unemployment insurance benefits
As of February 2025, eleven states in some way tied unemployment insurance benefit lengths to prevailing economic conditions or enacted indexing legislation with a future effective date.
Unemployment insurance solvency by state
Federal unemployment insurance program guidelines recommend that states hold at least one year of projected benefit payments in reserves. States base the year of projected benefit payments on the highest level of unemployment insurance payments experienced during the last 20 years.[15]
States determine their program solvency by using the Average High Cost Multiple (AHCM)—the ratio of the state's trust fund balance to the average of its three highest years of unemployment insurance payments. States with an AHCM below 1.0 risk insolvency.[15]
Solvency in indexed states
As of March 2024, the states with indexed unemployment benefits had the following levels of program solvency:[16]
- Alabama had the 18th most solvent program with an AHCM score of 1.02.
- Florida had the 29th most solvent program with an AHCM score of 0.70.
- Georgia had the 39th most solvent program with an AHCM score of 0.45.
- Idaho had the 8th most solvent program with an AHCM score of 1.42.
- Kansas had the 6th most solvent program with an AHCM score of 1.63.
- Kentucky is tied for 40th most solvent program with an AHCM score of 0.44.
- Louisiana is tied for 26th most solvent program with an AHCM score of 0.72.
- Massachusetts had the 37th most solvent program with an AHCM score of 0.53.
- North Carolina had the 18th most solvent program with an AHCM score of 1.06.
- Oklahoma had the 36th most solvent program with an AHCM score of 0.57.
- Tennessee is tied for 26th most solvent program with an AHCM score of 0.72.
Solvency in all states
As of a March 2024 report, 19 states had trust funds operating at or above the minimum solvency standard. Two states and the Virgin Islands had trust funds with the lowest (least solvent) AHCM value of 0.00.[17]
The map below identifies AHCM values by state as of March 2024. States shaded green have AHCM values above 1.0, while red states have AHCM values of 0.00. Gray states have AHCM values above 0.00 but below 1.0.[17]
| AHCM values by state, March 2024 | |
|---|---|
| State | AHCM value |
| Alabama | 1.02 |
| Alaska | 2.16 |
| Arizona | 0.87 |
| Arkansas | 1.09 |
| California | 0.00 |
| Colorado | 0.10 |
| Connecticut | 0.01 |
| Delaware | 1.13 |
| Florida | 0.70 |
| Georgia | 0.45 |
| Hawaii | 0.44 |
| Idaho | 1.42 |
| Illinois | 0.23 |
| Indiana | 0.68 |
| Iowa | 1.40 |
| Kansas | 1.63 |
| Kentucky | 0.44 |
| Louisiana | 0.72 |
| Maine | 1.80 |
| Maryland | 1.09 |
| Massachusetts | 0.53 |
| Michigan | 0.41 |
| Minnesota | 0.51 |
| Mississippi | 1.24 |
| Missouri | 0.61 |
| Montana | 1.44 |
| Nebraska | 1.39 |
| Nevada | 0.58 |
| New Hampshire | 0.97 |
| New Jersey | 0.21 |
| New Mexico | 0.58 |
| New York | 0.00 |
| North Carolina | 1.06 |
| North Dakota | 1.07 |
| Ohio | 0.41 |
| Oklahoma | 0.57 |
| Oregon | 2.12 |
| Pennsylvania | 0.13 |
| Rhode Island | 0.77 |
| South Carolina | 1.07 |
| South Dakota | 1.86 |
| Tennessee | 0.72 |
| Texas | 0.19 |
| Utah | 1.18 |
| Vermont | 0.83 |
| Virginia | 0.79 |
| Washington | 0.64 |
| Washington, D.C. | 0.72 |
| West Virginia | 0.81 |
| Wisconsin | 0.64 |
| Wyoming | 2.17 |
See also
- Unemployment insurance
- Unemployment insurance fraud
- Unemployment insurance fraud recovery
- Unemployment taxes
- Unemployment Trust Fund
- Unemployment filings during the coronavirus (COVID-19) pandemic, 2020-2021
- State government plans to end federal unemployment benefits related to the coronavirus (COVID-19) pandemic, 2021
External links
Footnotes
- ↑ 1.0 1.1 The Foundation for Government Accountability, "Indexing Unemployment," accessed May 25, 2021
- ↑ FGA, "How Unemployment Indexing Helped Alabama Weather the COVID-19 Pandemic,"
- ↑ Legiscan, "AL SB193 2019,"
- ↑ CNN Money, "Florida to cut state unemployment benefits," May 10, 2011
- ↑ Unemployment Info Digest, "How Much Is Unemployment In Ga," accessed October 7, 2022
- ↑ labor.idaho.gov, "Idaho Unemployment Insurance Financing, Benefit Costs and Experience Rating Report,"
- ↑ FGA, "Indexing Unemployment Set Kansas on Solid Ground,"
- ↑ WDRB, "Kentucky unemployment benefits cut in half starting in January, other changes," December 7, 2022
- ↑ WBRZ, "Gov. Landry signs law to reduce unemployment to 20 weeks, takes effect start of next year, June 17, 2024
- ↑ mass.gov, "How your unemployment benefits are determined,"
- ↑ The New York Times, "North Carolina Approves Steep Benefit Cuts for Jobless in Bid to Reduce Debt," February 13, 2013
- ↑ Legiscan, "Oklahoma House Bill 1933," accessed January 8, 2024
- ↑ Tennessee General Assembly, "HB1039," accessed September 1, 2022
- ↑ 14.0 14.1 Employment Law Firms, "How Unemployment Works," accessed May 18, 2021
- ↑ 15.0 15.1 The Mercatus Center, "The Costs and Consequences of Unemployment Benefits on the States," January 25, 2010
- ↑ Cite error: Invalid
<ref>tag; no text was provided for refs namedreport - ↑ 17.0 17.1 U.S. Department of Labor, "State Unemployment Insurance Trust Fund Solvency Report 2024," March 2024
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