(Source: MIRS.news, Published 04/29/2024) Preliminary approval was given to the Unemployment Insurance Agency’s (UIA) $55 million settlement in a class action lawsuit related to its handling of COVID-19 era claims.
The agreement, which covers a settlement class of claimants who had improper collection between March 1, 2020, to April 25, 2024, also requires the UIA to make a series of changes to how it processes unemployment claims.
Court of Claims Judge Brock A. Swartzle isn't expected to give final approval until March 20, 2025, according to his Thursday order.
UIA Director Julia DALE told a joint House panel that the fraud issue has been addressed, saying she hopes her testimony will "end the conversation on the pandemic era."
The 2022 suit was filed on behalf of five residents who alleged violation of due process rights and assessing and collecting overpayments caused by an agency error.
Their allegations were similar: They were approved for benefits and more than a year later told that they had been overpaid.
The chaos occurred during the pandemic, when the agency struggled to address increased claims demands.
In June 2022, Swartzle issued a preliminary injunction stopping the agency's collections activity.
The agreement prohibits the UIA from taking measures to collect overpayments until the individual has exhausted any review or appeal rights. The agency also will reissue letters to claimants and class members reminding them that they can request a waiver of their overpayments and instructions on that process.
A separate federal lawsuit, Kreps v. Michigan Unemployment Insurance Agency, that alleges five plaintiffs have waited years for unemployment benefits, remains pending in U.S. District Court. A jury trial is tentatively set for Feb. 25, 2025.
They allege the state delaying or denying payments violated their due process rights and a 2017 settlement agreement between the state and past claimants.
