Employment Network Payment Structure Evaluation

Objective

We contracted with Abt Associates to analyze service provider payment structures in the Ticket to Work (TTW) program. This project considered the implications of a legislative proposal, The Enhance Work and Earnings Opportunities for People with Disabilities (hereafter called “the Proposal”), which would change the rules for how Social Security Disability Insurance (SSDI) benefits change in response to beneficiaries’ earnings. If the Proposal were to become law, SSA would need to make changes to TTW rules. Therefore, the objectives of this project were to:

  • Determine how Employer Network (EN) payments could be structured if current SSDI earnings rules were replaced with a tiered earning structure and simplified work incentives;
  • Evaluate whether there are feasible alternatives to the Milestone/Outcome and Outcome payment systems that SSA currently uses to pay ENs; and
  • Assess how these payment structures and the change in benefit rules would affect the costs and benefits of TTW.
As a part of this project, we also considered the implications of a second legislative proposal that would transfer TTW program administration to the Department of Labor.

Status

The project was completed in May 2021.

To assist us in considering how to change the EN payment structure, this report explores the ways in which the Proposal would change the environment for TTW and the implications of those changes. The report categorizes the potential changes into four parts; two are first-order reactions and two are second-order reactions to the Proposal.

First-order reactions:

  • Beneficiaries’ response. The Proposal could affect beneficiaries’ choices about how much to earn and their likelihood of achieving the earnings thresholds in TTW with a given amount of EN support.
  • TTW changes. SSA would make changes to the EN payment structure uses for TTW. These payment structure changes could be extremely modest or quite broad.

Second-order reactions:

  • ENs’ responses. ENs would react to beneficiaries’ behavior, the TTW payment system, and the interaction of the two. ENs would want to know how much effort they must expend, how long they must wait to obtain payments, and the value of those payments.
  • Implications of EN responses. Beneficiaries’ earnings might be further affected by EN behavior, if ENs change the number of Ticketholders they serve, the types of Ticketholders they serve, or how they provide services.

The study addressed the possible outcomes of three types of payment structures that SSA might select based on the Promoting Opportunity Demonstration (POD): 1) Adapted POD; 2) Modified POD; and 3) Simplified Structures.

  1. Adapted POD -- Adapting the current payment structure used for beneficiaries participating in POD

    We would expect that payments to ENs would increase considerably. Phase 1 Milestone payments would become somewhat harder for ENs to earn for SSDI beneficiaries. However, considering other variables, this option would be expected to result in a reasonably small net increase in SSA costs.
  2. Modified POD -- Modifying the payment structure used for POD treatment group members to reflect the earnings levels that would be most salient under the Proposal

    We would expect a smaller increase in payments to ENs than under the Adapted POD structure. In comparison, payments for Phase 1 Milestones would be easier, and payments for Outcomes would be harder to achieve. There would be little change to SSA’s cost of administering the program, as this would not require new systems or procedures, and changes to the number of Ticket assignments and payments to ENs would be small. Considering other variables, we would expect SSA’s net costs to be mostly unchanged under this payment structure.
  3. Simplified Structures -- Adopting a new, simplified system

    We would expect a substantial increase in payments to ENs. This increase would stem from ENs’ accepting more Ticket assignments, where each Ticketholder would generate at least one payment to the EN, regardless of the Ticketholder’s earnings. Considering other variables, this option could either increase or decrease SSA’s costs, depending on the net impact of increased EN payments and monitoring with decreased benefits.

The report also addresses the implications of a second legislative proposal that would transfer TTW program administration to the Department of Labor by providing general considerations regarding the proposal based on existing literature, a review of key comments provided by the public in response to the Request for Information that the Department of Labor published in September 2020, and the research team’s knowledge of the Workforce Innovation and Opportunity Act (WIOA) and the TTW program.

Employment Network Payment Structure Evaluation Report

Not applicable.

Not applicable.