Ticket to Work and Self-Sufficiency Program: Overview and Current Issues
Released: 2014-01-24T00:00:00

Introduction

Title I of the Ticket to Work and Work Incentives Improvement Act of 1999 ( P.L. 106-170 ) established the Ticket to Work and Self-Sufficiency program (hereinafter referred to as the Ticket to Work or Ticket program), which is administered by the Social Security Administration (SSA). The purpose of this program is to enhance work incentives for Social Security Disability Insurance (SSDI) and Supplemental Security Income (SSI) beneficiaries . The legislation created a "ticket" system to expand choices in the numbers and types of providers that SSDI and SSI beneficiaries may choose to assist them in receiving employment services. The legislation also expanded Medicare and Medicaid coverage for individuals with a disability who are working or could work. Most notably, the Ticket to Work program created a market for public and private providers of support services known as employment networks (ENs) to which Social Security disability beneficiaries can voluntarily assign their tickets in exchange for a range of employment support services. The goal of the Ticket program is to reduce dependence on disability benefits and help Social Security disability beneficiaries enter or reenter the workforce. ENs would then be eligible to receive payments from SSA based on ticket holders achieving employment "milestones" or outcomes.

This report provides an overview of how the Ticket to Work program operates and addresses several issues related to the Ticket program. First, it provides a brief background on the SSDI and SSI programs and a legislative history on how the Ticket program evolved. Second, this report provides an in-depth explanation on the various components and regulations of the Ticket to Work program in its current form and prior to major regulatory changes in July 2008. Third, it examines other work incentive programs created by Ticket to Work legislation and concludes with a discussion on the issues surrounding implementation of the Ticket program.

Background

SSA administers two disability programs, SSDI and SSI, Titles II and XVI of the Social Security Act respectively. SSDI is an insurance program for workers and their dependents for which benefits are paid to individuals who have a disability and have worked and made contributions to the U.S. Social Security system. Individuals who collect SSDI also become entitled to coverage under the Medicare health insurance program (Title XVIII of the Social Security Act) after a 24-month waiting period.

SSI is a means-tested disability program for low-income individuals who are aged, blind, or disabled and have limited resources. In general, individuals are eligible for SSI if their countable income falls below the federal benefit rate (FBR) and they have countable resources of less than $2,000 for an individual. In most states, beneficiaries who collect SSI are automatically entitled to coverage under the federal-state Medicaid health insurance program (Title XIX of the Social Security Act).

Individuals are considered to have a disability if they meet the definition established under the Social Security Act. Disability is defined as the inability to engage in any "substantial gainful activity" (SGA) due to a medically determinable physical or mental impairment that is expected to last for at least 12 months or result in death. SGA is defined in federal regulations as paid work involving significant and productive physical or mental duties. For 2014, the monthly SGA thresholds are $1,800 for individuals who are blind and $1,070 for individuals with other disabilities. SGA limits are adjusted annually to reflect growth in average wages.

In 2013, approximately 12.2 million beneficiaries collected monthly SSDI or SSI benefits. Together these two programs represent the largest disability benefit system in the nation, with combined federal expenditures of approximately $146.8 billion in 2013. Although both SSDI and SSI include a number of work incentives and offer rehabilitation services to individuals with a disability, the number of people who leave the benefit rolls to work (i.e., engage in SGA) is very small. In 2012, 0.4% of SSDI beneficiaries actually left the disability rolls because of work.

The small incidence of return-to-work has been partially attributed to the built-in disincentives of the SSDI and SSI programs. Because eligibility depends upon proving an inability to work, recipients risk losing both cash benefits and health insurance coverage if they successfully attempt to work.

Legislative History of the Ticket to Work Program

Prior to the passage of Ticket to Work legislation, policy makers and advocates for individuals with disabilities had long argued that work incentives under the law were complex and difficult to understand. Some contended that several reasons for the high rate of unemployment among beneficiaries included confusing rules, arcane procedures, and disincentives built into the Social Security disability programs. Advocates noted surveys showed that most working-age people with disabilities want to work and maintained that the numerous federal regulations and program rules have the effect of discouraging otherwise qualified and eager job seekers with disabilities from seeking employment. Return-to-work legislation subsequently became the subject of several legislative proposals, congressional hearings, and a major component of the Clinton Administration's comprehensive strategy to increase employment among individuals with disabilities.

On March 18, 1998, President William J. Clinton established the Presidential Task Force on the Employment of Adults with Disabilities (PTFEAD). This Cabinet-level task force was charged with conducting an extensive public policy review with the goal of increasing the employment of individuals with disabilities and addressing other barriers to work among adults and young people with disabilities. PTFEAD produced a series of reports that analyzed existing federal programs and policies to determine and track changes that would be necessary to remove barriers to work, address issues surrounding health insurance coverage, and analyze employment outcomes of programs focused on youths with disabilities. Ultimately, PTFEAD's recommendations prompted the Clinton Administration to seek full funding in the FY2000 budget request for Ticket to Work programs.

Along with several initial cosponsors in the 106 th Congress, Senator James M. Jeffords introduced the Work Incentives Improvement Act of 1999 ( S. 331 ) on January 18, 1999, and on March 18, 1999, Representative Rick Lazio introduced the Ticket to Work and Work Incentives Improvement Act of 1999 ( H.R. 1180 ). Ticket to Work legislation garnered broad bipartisan and bicameral support. A conference report incorporating both bills into H.R. 1180 was passed by the House on October 19, 1999, by a vote of 418 to 2 and by the Senate on November 19, 1999, on a 99 to 1 vote. President Clinton signed H.R. 1180 into law on December 17, 1999, which became P.L. 106-170 .

Specifically, the legislation authorized (1) "tickets" or vouchers to beneficiaries to give them increased choice of rehabilitation providers and access to services needed to obtain and retain employment, (2) payments to employment service providers based on ticket holder achieving certain employment "milestones" or outcomes, (3) SSA demonstrations to test different approaches to removing barriers to employment for Title II (SSDI) beneficiaries, and (4) options for states to adopt a Medicaid "buy-in" program to allow beneficiaries to maintain health coverage after returning to work and a continuation of Medicare coverage to certain beneficiaries who are working.

On December 13, 1999, the Congressional Budget Office (CBO) produced final scoring on the budgetary effects of H.R. 1180 as passed by the House and Senate. CBO estimated modest gains in Social Security beneficiaries' future participation in the proposed expanded network of employment support services, beyond the services that were primarily offered by state VR agencies. Overall, by FY2009, CBO projected that the Ticket to Work program (Title I of H.R. 1180 ) would reduce direct spending by $53 million and $32 million for the SSDI and SSI programs, respectively, through the combination of payments to ENs and the avoidance of payments to beneficiaries whose benefits would be suspended or terminated due to earnings from work.

Ticket to Work and Self-Sufficiency Program

The Ticket to Work and Self-Sufficiency program was designed to address several barriers to work for individuals with disabilities through greater access to healthcare and a broader pool of employment service providers or ENs. Under the program, SSA provides eligible SSDI and SSI beneficiaries with a "ticket" that can be used as a voucher to obtain VR, employment and other support services from an approved EN or state VR agency. ENs are responsible for assisting ticket recipients with entering or re-entering the workforce. The program is currently administered by two contracted program managers (PMs) who report to SSA administrators.

Initial regulations for the implementation of the Ticket program were published in the Federal Register on December 28, 2001, and the program was phased in nationally over a three-year period beginning in 2002. The program was initially available for eligible beneficiaries in 13 states and was extended to all states by September 2004.

In an effort to provide greater financial incentives to ENs and expand Ticket eligibility to a greater number of beneficiaries, the Ticket program underwent a number of regulatory adjustments in July 2008. Among other changes, the new rules modified the payment schedule for ENs and allowed disability beneficiaries with medical conditions that were expected to improve to also participate in the Ticket program. These beneficiaries had been previously excluded. Table A -1 in Appendix A shows a side-by-side comparison of the key components of the Ticket to Work program that were subject to the July 2008 regulatory changes and new provisions that were implemented.

Definition of a "Ticket"

According to SSA regulations, a "ticket" is a document that is issued to an eligible beneficiary that authorizes payment by SSA to an EN or state VR agency that provides employment services, vocational rehabilitation, and other support services to the beneficiary. Participation in the program is voluntary and the beneficiary chooses when and whether to assign his or her ticket to an EN. An example of a ticket is shown in Figure 1 .

Eligibility Requirements for a Ticket

All individuals with disabilities who are between the ages of 18 and 64 are considered eligible for a ticket if they are receiving federal SSDI or SSI cash benefits and are in current pay status. SSA is prohibited from initiating a continuing disability review (CDR) during any period for which an individual is participating in the Ticket program. Eligibility for a ticket terminates when entitlement to SSDI or SSI terminates for reasons other than work activity or earnings.

Employment Networks

ENs may include any public or private entity that can provide directly, or arrange for other organizations or entities to provide employment services, VR services, or other support services. This may include state VR agencies, one-stop delivery systems under the Workforce Investment Act (WIA) of 1998, public or private schools, or employers that conduct job training programs and other employment support services. An entity applies to become an EN contractor by completing a Request for Quotation (RFQ) to SSA's Employment Networks Contract Team.

ENs assume responsibility for the coordination and delivery of services to individuals who have assigned tickets to them. SSA selects and enters into agreements with these employment networks. ENs and beneficiaries together develop an individual work plan (IWP) that provides for informed choice for each beneficiary in selecting an employment goal and specific services needed to achieve that goal. ENs have been selected to conduct vocational rehabilitation and other services for ticket holders in all 50 states and the District of Columbia. A listing of approved ENs is available by state and service-type on the Ticket to Work website or by contacting the program manager Maximus' toll-free line.

Program Manager

Ticket to Work legislation requires SSA to contract with one or more Program Managers (PMs) through a competitive bidding process to assist SSA in administering the program. SSA contracted with the Federal Services division of Maximus, a consulting and program management firm, on September 29, 2000, to assume the responsibility of PM for the Ticket program. On September 30, 2008, SSA awarded an additional contract to Maximus to serve as the Ticket Program Data Operations Center Manager (TPDOCM), responsible for maintaining electronic systems that support daily ticket operations and provide system support services and management to SSA.

A PM can be one or more organizations in the private or public sector with expertise and experience in the field of VR or employment services. The PM is responsible for providing information to beneficiaries and the general public about the program, recruiting and recommending ENs to SSA, ensuring adequate availability of, and access to, services to beneficiaries, and providing assurance that ENs are complying with the terms of their agreements. A PM is excluded from directly providing employment services to participating individuals.

SSA reassigned certain PM duties from Maximus, Inc. through a separate PM contract with Booz Allen Hamilton, a strategy and technology-consulting firm. On September 29, 2010, Booz Allen Hamilton was awarded a five-year PM contract to serve as Beneficiary Access and Support Services (BASS) manager with responsibility for designing, implementing, and supporting the marketing of the Ticket program as well as administering the program's call centers, website, and electronic mail. On September 29, 2010, Maximus was also awarded a five-year PM contract to serve as the Operations Support Manager (OSM), handling all activities related to ENs, including recruitment, training, and payments, in addition to managing data and other information related to the Ticket program.

Employment Network Payment Systems

P.L. 106-170 authorizes two payment options to ENs and state VR agencies acting as ENs for achieving an employment outcome: a Milestone-Outcome payment system and an Outcome-only payment system. Each EN or VR agency elects the payment system under which it will be paid for each individual client.

ENs use the ticket to claim payment from SSA for services they provide to ticket holders. They are paid for each month, based on either payment option limits, in which a ticket holder is not receiving benefits because the individual is working and has earnings above certain thresholds (see Figure 2 ). ENs are prohibited from seeking additional compensation from ticket holders; however, as a result of July 2008 regulatory changes, ENs are allowed to formally supplement a client's earnings through direct payments to the ticket holder.

Milestone-Outcome EN Payment System

As illustrated in Figure 2 , the Milestone-Outcome system provides payments to ENs of $1,357 for 2014 based on the completion of up to four Phase 1 milestones in which a ticket holder has earnings from work above the trial work period (TWP) level ($770/month for 2014). In addition, an EN can also receive up to 11 Phase 2 milestone payments for SSDI or concurrent ticket holders or up to 18 Phase 2 milestones for SSI ticket holders for months in which the beneficiary has earnings above the SGA level ($1,070 for non-blind and $1,800 for the blind for 2014). Finally, ENs can receive up to 60 outcome payments for SSI ticket holders ($234/month for 2014) and 36 payments for SSDI or concurrent ticket holders ($407/month for 2014) for months in which the ticket holder has earnings from work sufficient for zero cash benefits. For 2014, ENs can receive up to $23,680 in total payments for SSI ticket holders and up to $24,557 in total payments for SSDI ticket holders for the completion of all Milestone-Outcome phases.

Outcome-Only EN Payment System

Under the Outcome-only payment system, ENs can receive payment only for ticket holders that have earnings sufficient for a zero cash benefit status. For 2014, ENs can receive up to 36 payments at $758 a month ($27,288 in total payments) for SSDI ticket holders and up to 60 payments at $436 a month ($26,160 in total payments) for SSI ticket holders (see Figure 2 ).

State VR Agencies and ENs Serving the Same Ticket Holder (Partnership Plus)

Under prior rules, a state VR agency could elect to be paid under traditional cost-reimbursement rules, but a ticket holder would have to assign their ticket exclusively to the VR agency. In this instance, VR agencies could not elect to be paid under either EN payment system. The July 2008 regulatory changes established the Partnership Plus program, which encouraged partnerships between state VR agencies and ENs and enables a ticket holder to use the services of both entities.

Under Partnership Plus, SSA will compensate both state VR agencies and ENs sequentially for achieving successful employment outcomes for the same ticket holder. Following service delivery to a ticket holder and the closing of a case, a state VR agency can be reimbursed by SSA under the traditional cost-reimbursement system. Through a referral agreement, an EN can then provide additional ongoing job retention and other employment supports that may be needed by the ticket holder. The EN would then be eligible to receive Phase 2 Milestone-Outcome or Outcome-only payments based on ticket holder earnings (see Table A -1 ).

Ticket Ending Period

Under SSA regulations, a ticket period ends when (1) entitlement to SSDI benefits ends or eligibility for SSI disability benefits terminates for reasons other than work activity or earnings, (2) after a state VR agency or EN has exhausted outcome payments based on that ticket, (3) the beneficiary is no longer making timely progress toward self-supporting employment according to SSA guidelines, or (4) the beneficiary withdraws from an EN and fails to re-assign his or her ticket, within a three-month period.

Ticket holders are considered to be making timely progress toward self-supporting employment when they show an increasing ability to work at levels that will reduce dependence on benefits or by making progress toward the completion of a degree program. During the period in which a ticket is active, SSA is prohibited from conducting CDRs; however, regulations set forth guidelines for SSA to perform timely progress reviews (TPRs) to assess whether individuals are making progress toward self-supporting employment or degree completion.

Beneficiaries are allowed up to a 12-month period to prepare for employment or school after the ticket has been issued and must be actively participating in their employment or educational plans during this period. After 12 months, beneficiaries need to show that they are progressing toward self-sufficiency by demonstrating increasing levels of earnings or college credit completion, in order to continue using the ticket. The regulations indicate measures to assess beneficiaries' progress through SSA's performance of TPRs at

12 months in which the ticket holder is required to have worked 3 months above the TWP level or completed 60% of full-time college credits, 24 months in which the ticket holder is required to have worked 6 months above the TWP level or completed 75% of full-time college credits, 36 months in which the ticket holder is required to have worked 9 months at the SGA level or completed a 2-year program or an additional 1 year of full-time college credit, 48 months in which the ticket holder is required to have worked 9 months at the SGA level or completed an additional 1 year of full-time college credit, 60 months in which the ticket holder is required to have earnings for 6 months that are sufficient for a zero cash benefit or completed an additional 1 year of full-time college credit, 72 months in which the ticket holder is required to have earnings for 6 months that are sufficient for a zero cash benefit or completed a 4-year degree program, and successive 12-month periods in which the ticket holder is required to have earnings for 6 months that are sufficient for a zero cash benefit status.

Once a ticket has been assigned, ticket holders also have the option of placing their ticket in an inactive status during the initial 24-month period if they believe they will be unable to participate in the program for a prolonged period of time. This inactive period would not count against their time limitations for making progress, however, the individual would not be protected against CDRs during this period. Prior SSA rules for timely progress required ticket holders to meet similar monthly earnings thresholds at the higher SGA level (see Table A -1 ).

Other Provisions of Ticket to Work Legislation

P.L. 106-170 contained several other provisions to enhance the work opportunities for individuals with disabilities. It lessened work disincentives under the Social Security statute, established SSA demonstrations, and created an advisory panel. The legislation also established two grant programs for the purpose of disseminating accurate information to beneficiaries with disabilities on work incentive programs.

Expedited Reinstatement

Section 112 of P.L. 106-170 extended the time period that a SSDI, SSI, or concurrent beneficiary who returned to work may request reinstatement of benefits. If a beneficiary loses eligibility for SSDI or SSI benefits and payments due to earnings from work and his or her income falls below SGA within five years, SSA may be able to restart benefits without requiring the individual to file a completely new application. Although SSA requires individuals under this provision to apply for benefit continuation, they may receive up to six months of provisional benefits while their application is being reviewed.

Work Incentives Planning and Assistance

P.L. 106-170 also authorized SSA to award one or more cooperative agreements with qualified organizations to provide benefit planning, assistance, and outreach. These Work Incentives Planning and Assistance (WIPA) programs are community-based organizations that receive grants from SSA to provide services to Social Security disability beneficiaries with free access to long-term employment planning support. At its height, the WIPA program included 102 projects nationwide. Each WIPA project has counselors called Community Work Incentives Coordinators who

refer beneficiaries to ENs or VR agencies, conduct outreach efforts to those beneficiaries (and their families) who are potentially eligible to participate in federal or state employment support programs, and work in cooperation with federal, state, and private agencies and nonprofit organizations that serve beneficiaries with disabilities.

The Benefits Planning Assistance and Outreach (BPAO) program, the predecessor to WIPA, had a much narrower focus in assisting beneficiaries to make informed choices about work options. Authorization for WIPA expired at the end of FY2011 and funding for the program lapsed on June 30, 2012; however, the Consolidated and Further Continuing Appropriations Act, 2013 ( P.L. 113-6 ), appropriated money for WIPA in FY2013. The disbursement period for FY2013 WIPA funds is August 1, 2013, through July 31, 2014.

Protection and Advocacy for Beneficiaries of Social Security

P.L. 106-170 also authorized SSA to award grants to state protection and advocacy systems authorized by the Developmental Disabilities Assistance and Bill of Rights Act under the program. Awarded under the Protection and Advocacy for Beneficiaries of Social Security (PABSS) program, these grants are in addition to the current Developmental Disability program grants. The purpose of the grants is to provide information and advice about how to obtain vocational rehabilitation, employment, advocacy, or other services that SSDI or SSI beneficiaries may need to secure or regain gainful employment.

Ticket to Work legislation stipulates that states receive funds at a level that is at least the greater of $100,000 or one-third of 1% of the amount appropriated and that grants to certain territories must be at least $50,000. The minimum payments may be increased to reflect an inflation adjustment in certain circumstances. Each protection and advocacy system that receives a grant has to submit an annual report to SSA and the Ticket to Work and Work Incentives Advisory Panel on the services provided to individuals. SSA awards grants to protection and advocacy systems in each of the 50 states and the District of Columbia, as well as Puerto Rico, Guam, American Samoa, the United States Virgin Islands, the Commonwealth of the Northern Mariana Islands, and the protection and advocacy system for Native Americans. Like WIPA, authorization for PABSS expired at the end of FY2011 and funding for the program lapsed on September 30, 2012; however, the Consolidated and Further Continuing Appropriations Act, 2013 ( P.L. 113-6 ) appropriated money for PABSS in FY2013.

SSA Demonstration Projects

SSA conducts numerous research projects to better understand how to deliver effective services to Social Security beneficiaries. The results of these projects can potentially lead to legislation or rules changes to allow for better coordination between SSA and the states or identify ways to serve beneficiaries more efficiently. Title III of P.L. 106-170 reinstated the Commissioner of SSA's authority to waive provisions of Title II of the Social Security Act for the purpose of conducting demonstrations relating to alternative methods of treating the work activity of individuals entitled to disability insurance benefits. SSA's authority to initiate new SSDI projects expired on December 18, 2005.

Benefit Offset National Demonstration

P.L. 106-170 required SSA to conduct demonstration projects under which disability benefits payable under SSDI are reduced gradually; $1 for every $2 of the beneficiary's earnings above SGA. This Benefit Offset Pilot Demonstration (BOPD) was initiated in August 2005 in four states to adequately evaluate the appropriateness of a national implementation of such a program. Under current law, individuals receiving disability benefits under SSDI who return to work have their benefits eliminated entirely after working above the SGA level, following a nine-month TWP and three-month grace period. The BOPD was expected to reduce barriers to work and allow beneficiaries to attain employment, increase earnings, and eventually become financially self-sufficient. Participants also maintain eligibility for health care benefits and other SSDI employment supports. The results of the four-state demonstration project helped to inform the development and implementation of the Benefit Offset National Demonstration (BOND) project at 10 sites across the country. The start-up tasks for the BOND project were completed in 2010 and a three-month pilot commenced in January 2011. Full project implementation began in late April 2011 and enrollment ended in September 2012. A final synthesis report on the BOND is expected in 2017.

Analysis of the Ticket to Work Program

According to publicly available data on the SSA website, 13.6 million active tickets have been issued to eligible beneficiaries as of December 31, 2013 (see Table 1 ). At the inception of the program, tickets were issued to beneficiaries as the Ticket to Work program rolled out in phases. Since the initial roll out, a letter and paper ticket explaining the program are automatically mailed to eligible beneficiaries. Of the 13.6 million tickets issued, 319,972 (approximately 2.4%) have been activated (i.e., the ticket has been assigned to an EN or state VR agency). Of all tickets that are in use, nearly 9 out of 10 have been assigned to state VR agencies rather than ENs. Assignment of tickets does not necessarily mean that the client is actively receiving services from an EN or state VR agency, only that the beneficiary has notified the PM that an agency or EN has been designated to provide services to them.

In addition, there are currently 666 ENs under contract to provide employment support services to ticket recipients as of December 31, 2013. Of the ENs under contract, 594 (89.2%) have had tickets assigned to them and 181 (27.2%) have received some type of payment from SSA for achieving a designated payment milestone for months that a ticket-holder was working while assigned to the EN. As of December 31, 2013, approximately $138.1 million in total payments have been made to ENs.

Since the inception of the Ticket to Work program, a number of studies and evaluations have been conducted through the Advisory Panel, GAO, and the academic community. Based on a review of these various reports, the following sections provide a discussion of the key issues facing the Ticket program and matters that may be of concern to Congress.

Low Participation Among Social Security Beneficiaries

The Ticket to Work program has come under increased scrutiny and criticism by policy makers for low participation rates among eligible SSDI and SSI recipients. As shown in Table 2 , only 4.1% of all beneficiaries receiving SSDI or SSI participated in the Ticket to Work program in 2010. Ticket to Work is a voluntary program, so there is no obligation upon the ticket holder to activate the ticket. Researchers and disability advocates have identified several possible contributing factors to the low participation rates.

Confusion on How Work Affects Benefits

First, beneficiaries that have just begun receiving cash payments from SSA may be reluctant to participate in the Ticket to Work program for fear of losing benefits. Past research has also shown that few beneficiaries were aware of SSA's work incentives programs and, among those who were aware, many were not persuaded to return to work because of them.

To address some of the barriers to employment that many beneficiaries face, Ticket to Work legislation specifically authorized the WIPA program to counsel beneficiaries on how work will affect their benefits. A recent evaluation revealed, among other findings, that although WIPA organizations provide support to beneficiaries who are enrolled in their services, many other Social Security disability beneficiaries do not receive the ongoing assistance that the program was intended to provide.

Employment Network Screening of Beneficiaries

Second, ENs are only compensated by SSA when a ticket holder has an employment outcome either at the TWP or SGA levels depending on the type of payment system or—for the Milestone-Outcome system—the phase that a ticket holder has progressed through. Further, ENs are given autonomy to determine who they will accept as a client and many implement a screening process that identifies the likelihood that a ticket holder will return to work. Therefore, there is a disincentive for ENs to accept ticket holders who, in their view, may be unemployable without the use of costly services. Some ENs face significant up-front costs associated with providing employment services to ticket holders before receiving payments from SSA. ENs may focus on those individuals that require the least amount of assistance, while individuals with the most severe disabilities may be denied services by ENs.

Return-to-Work Rates Among Beneficiaries and Ticket Holders

SSA annually reports the percentage of beneficiaries whose benefits were terminated in the current year due to work. However, returning to work for an individual with a disability can be a complex process that may not be captured in annual statistics.

SSA Measurement of Return-to-Work Rates

Researchers who have explored return-to-work rates among Social Security disability beneficiaries observe that return-to-work rates—while low by many standards—are higher when examining an individual's progress toward gainful employment over several years (or longitudinally), as opposed to the monthly or annual statistics that SSA generally reports, also known as a cross-sectional statistic.

For example, in any given year approximately one-half of 1% of SSDI beneficiaries leave the disability rolls (or have their benefits terminated) because of work. Yet, this statistic includes a large and entrenched group of beneficiaries who are added to, and remain on the disability rolls from year to year with no prospects of employment. However, a longitudinal study of benefit termination that followed a cohort of SSDI beneficiaries for 10 years from the time that they first entered the disability rolls found that 3.7% (or more than 7 times the published SSA statistic) of beneficiaries left the disability rolls within that time period. In addition, Ticket to Work participants were more than two-and-a-half times more likely to leave the disability rolls for the first time than non-participants.

Ticket Participation and Return-to-Work Rates Vary by Demographic Group

Some research has shown that return-to-work rates vary significantly depending on the age or impairment of the ticket holder. Younger beneficiaries that may have many more working years ahead of them and individuals with more recent work experience are more likely to return to work. Conversely, individuals that are older and closer to retirement age or have experienced a long-term separation from the workforce are the least likely to return to work.

In addition, individuals with sensory impairments including the deaf and blind are more likely to attain gainful employment than individuals with more severe physical or neurological impairments. Indeed, some research has found that individuals who are blind or have low vision were more likely to assign their tickets than individuals with other disabilities.

Most Tickets Are Assigned to State VR Agencies

One of the major purposes of Ticket to Work legislation was to expand the number of providers of public and private employment services to provide choices for whom a ticket holder could seek support. However, nearly 9 out of 10 tickets that are in use are assigned to state VR agencies. In addition, GAO found that 20 ENs in 2010 (or less than 2% of all ENs) received the majority of payments for assisting clients in achieving work goals. Ticket holders' preference for assigning their tickets to the state VR agencies may reduce the incentive for new ENs to enter the market to compete for clientele.

Prior to implementation of the Ticket to Work program, state VR agencies managed all employment support services for SSDI and SSI beneficiaries. Following Ticket to Work legislation, ticket holders could choose to either seek services from ENs or state VR agencies, yet the vast majority of tickets were continually assigned to the state VR agencies. The July 2008 regulatory changes introduced Partnership Plus, allowing ticket holders to seek assistance from state VR agencies (which tend to be more adept at providing intensive vocational rehabilitation services), and subsequently assign their tickets to ENs for additional employment services. Growth in the number of ENs and the number of ticket holders assigning tickets to ENs has been observed, but ticket holders continue to have a clear preference for working with state VR agencies.

GAO Assessment of the Ticket to Work Program

In May 2011, GAO completed their latest audit of the Ticket to Work program. Although the Ticket program has experienced growth among active ticket holders and ENs since inception, GAO identified several deficiencies that could also be contributing factors to the underperformance of the Ticket program. GAO specifically cited a need for increased managerial oversight of ENs and a lack of TPRs performed by SSA on ticket holders.

Lack of Employment Network Oversight

GAO found that between FY2007 and July 2010, the number of ENs providing employment support services to ticket holders and SSA payments to ENs increased dramatically, likely a result of the July 2008 regulatory changes that offered additional financial incentives to ENs to participate in the Ticket program. However, as mentioned earlier in this report, SSA payments were concentrated among a small minority of ENs.

In addition, GAO cited issues related to "shared payments" between ENs and their working Ticket to Work clients. Although EN payments to ticket beneficiaries had been deemed acceptable by SSA as a way for ENs to supplement the earnings of their ticket clients for various work-related purposes, this process was formalized by SSA in a new July 2008 regulatory provision. GAO found that certain ENs were marketing these shared payments to potential ticket clients as "work-support" payments that they would pass-on to the clients through an agreement. Additionally, these ENs would specifically target ticket holders that were either already working or ready to work, eliminating the need for the EN to provide any significant employment services. According to a disability rights advocate interviewed by GAO, these ENs essentially served as "middlemen" for SSA payments to ticket holders, dividing the payments between themselves and their clients.

GAO also found deficiencies in (1) PMs' ability to maintain up-to-date listings of ENs that were still in business, (2) SSA accounting of services provided by each EN, and (3) an EN application process that did not sufficiently vet unqualified ENs from being included in the network.

SSA Temporarily Suspended Timely Progress Reviews

SSA performs timely progress reviews (TPRs) to ensure that ticket-holders are making progress toward attaining gainful employment that would eventually lead to reduced reliance or cessation of disability benefits. However, at the behest of ENs, SSA temporarily suspended TPRs in 2009. During this time period, ticket holders were not subject to any oversight of their progress toward self-supporting employment as SSA is prohibited from performing CDRs (as per Ticket regulations).

GAO found evidence that this exemption was abused by some ticket holders that would activate their tickets with an EN or state VR agency, but would not follow-through with seeking employment support from the assigned organization or agency. Without the prospect of being subject to a TPR, this strategy would protect ticket holders from any oversight, allowing beneficiaries to continue receiving payments from SSA with little accountability. A TPR could have served to identify these individuals, but SSA's suspension of TPRs allowed this to go unnoticed. Although SSA has since reinstated TPRs, GAO asserts that the resulting backlog will be too overwhelming for SSA to effectively handle.

Impact of July 2008 Regulatory Changes

As noted earlier, SSA rolled out the Ticket to Work program in three phases from February 2002 to September 2004. Between August 2004 and January 2005, GAO conducted an audit of the Ticket to Work program. In its March 2005 report, GAO noted less than 1% of the 9.5 million beneficiaries who received a ticket assigned their ticket to an EN or state VR agency. In addition, GAO found that just 386 of the 1,164-contracted ENs were accepting tickets. Although the number of contracted ENs accepting tickets increased to 752 out of 1,514 in FY2007, beneficiaries continued to assign their tickets primarily to state VR agencies.

In a bid to attract more providers to the Ticket to Work program, SSA made substantial changes to the EN payment system in July 2008. Specifically, SSA

increased the number of Milestone-Outcome payments, lowered the ticket holder earnings threshold required to trigger a payment, permitted ENs to serve a ticket holder who received services from a state VR agency (Partnership Plus), shortened the earnings period required to trigger a Milestone-Outcome payment, increased the maximum payable Milestone-Outcome amount, and increased the payment amounts for SSI-only ticket holders (see Table A-1 ).

SSA believed that by increasing the financial incentives for ENs to participate in the Ticket to Work program, the agency could "significantly enhance beneficiary choice and improve the likelihood that beneficiaries would receive the most effective support."

EN Participation

Following the July 2008 regulatory changes, the number of ENs with at least one assigned ticket during the calendar year nearly doubled, from 818 in 2007 to 1,600 in 2011 ( Table 3 ). Note that the metric "number of ENs with at least one assigned ticket during the calendar year" is different from the point in time metric "number of ENs with assigned tickets" in Table 1 . The percentage of ENs receiving at least one payment also increased, from 23.0% in 2008 to 34.6% in 2011. Furthermore, the share of ENs that reported accepting ticket assignments increased from 51% in July 2008 to 60% in December 2011.

The July 2008 regulatory changes also contributed to an increase in the number of new tickets assigned under the EN payment system. As shown in Figure 3 , the number of new tickets assigned under the traditional state VR cost-reimbursement system increased only 19.4% between 2007 and 2010 (from 62,000 to 74,000), whereas the number of new tickets assigned under the EN payment system increased 566.7% during the same period (from 3,000 to 20,000).

Most of the growth in in new tickets assigned under the EN payment system is the result of an increase in tickets assigned under the Milestone-Outcome payment system. As Figure 4 illustrates, the number of new tickets assigned under the Milestone-Outcome payment system increased 472.5% following the 2008 regulatory changes (from 3,417 in 2007 to 19,564 in 2010), whereas the number of new tickets assigned under the Outcome-Only payment system decreased 53.5% (from 751 in 2007 to 349 in 2010). The increased use of the Milestone-Outcome payment system may stem from the 2008 regulatory changes that increased the number and maximum payable amount under the Milestone-Outcome payment system. The reduction in the earnings period required to trigger a Milestone-Outcome payment may have also played a role in increasing the number of new tickets assigned under the Milestone-Outcome payment system.

Employment Outcomes

The impact of the 2008 regulatory changes on employment outcomes remains inconclusive, due in part to the economic recession of 2007-2009. The weak labor market during this period may have made it more difficult for ticket holders to obtain employment. According to a 2013 Ticket to Work evaluation report from Mathematica, "it is not possible to disentangle the impacts of the regulatory changes from the impacts of the recession and other external factors."

As shown in Table 4 , post-2008 change participants worked an average of 18.7 fewer hours per month than pre-change participants did. The likelihood of being employed, however, did not significantly differ between pre and post-change participants. Post-change participants with a ticket assigned to an EN were employed an average of 9.2 months longer than pre-change participants under the EN payment system.

Issues for Congress

The Ticket to Work program introduced a new dynamic in the way SSA interacts with Social Security disability beneficiaries. Rather than simply making determinations of disability, ensuring that beneficiaries receive benefits, and recertifying eligibility, Ticket to Work further tasks SSA with facilitating a voluntary return-to-work program for the very same individuals who have been deemed unable to work.

Since inception, SSA has faced several challenges in implementing the Ticket to Work program, including creating a way to increase participation rates and expand the number and quality of ENs that serve individuals with disabilities who are seeking to reenter the workforce. SSA has sought to address many of these challenges by implementing changes to various program components based on periodic assessments and recommendations. However, others have asserted that creating a more effective system to address the employment challenges of individuals with disabilities requires greater integration of existing disability systems, tailoring rehabilitation programs to the needs of each individual, and increasing the return-to-work incentives for people who want to rejoin or remain in the workforce, but would find it difficult without ongoing supports.

Expand Early Intervention Services for Disabling Conditions

Some research suggests that Social Security disability programs have been slowly reactive, that is, providing benefits after a disability has become long-term and more difficult to rehabilitate. Some evidence supports the notion that supplying an individual with the necessary medical and rehabilitative support as soon as possible after the onset of a disability may help prevent the condition from worsening over time and enable that individual to return to work sooner or avoid leaving the workforce altogether.

Recent attachment to the workforce is a significant factor in a disabled individuals' ability to return to employment following a disabling condition. In other words, the longer disabled individuals are separated from the workforce, the less likely they will be able to return to gainful employment due to factors that may include outdated skills, inadequate accommodations, or a lack of motivation. These challenges are exacerbated by a recent economic downturn that has resulted in higher unemployment rates for both the disabled and nondisabled alike.

Yet, for individuals with disabilities to receive the health insurance coverage, rehabilitative services and employment supports available through the Ticket to Work program, they must first go through the often protracted process of applying for benefits and demonstrating to SSA that they are unable to work due to a long-lasting impairment. Additionally, if a claim is denied and an individual files for a reconsideration or appeal, the application process can be further extended by months or years in some cases. The timeline can be even longer for most SSDI claimants who must sustain a five-month wait from disability-onset before they even become eligible to apply for benefits.

Congress may move to consider authorizing SSA to expand non-monetary benefits, including medical and rehabilitative services to SSDI and SSI applicants who have not yet been approved for full benefits. The lengthy application process for benefit payments may be hindering their ability to take full advantage of the services that will enable them to eventually leave the benefit rolls due to work. The cumulative passage of time that occurs from disability-onset, the benefits application period and—for SSDI applicants—the additional five-month wait for eligibility, disengages individuals from work, may increase the severity of any untreated medical conditions, and will likely entrench their reliance on cash payments if and when a claim is eventually approved. An early intervention process that focuses on providing targeted support soon after the onset of a disability for an individual who has recently left the workforce, or is still on the job, may allow that person to continue working or quickly return to work following a brief absence. A successful early intervention effort could allow a claimant to continue working in at least a part-time capacity and receive reduced benefits or preclude the need for SSA to ever provide full disability benefits.

Increase Management and Oversight of ENs

As mentioned earlier, nearly 9 out of 10 ticket holders assign their tickets to state VR agencies as opposed to ENs. This may be a relic of the pre-Ticket to Work era when state VR agencies served all SSDI and SSI beneficiaries. VR agencies are in the advantageous position of being well established in the disability community and being authorized to offer any necessary services to beneficiaries for which the agencies are reimbursed based on appropriated funds. In addition, VR agencies currently have a performance measurement process in place that identifies the outcomes of their services to clients. Ticket to Work legislation also gives VR agencies the added option of "acting as ENs" through electing to be paid under a Ticket to Work payment system.

However, the services offered by ENs vary and according to GAO, Ticket to Work PMs do not keep an accurate, up-to-date listing of which services are offered by which EN. ENs also have the option of selecting which ticket holder they will serve, and are more likely to accept tickets from individuals that are either working or ready to work, as opposed to state VR agencies which are required to prioritize individuals with the most severe disabilities. This has possibly led to service approaches by ENs in which the Ticket to Work revenue sharing provisions have become out of line with the general goals of the Ticket program. In addition, SSA does not currently have a system in place to measure EN performance as required by law.

In line with GAO recommendations for the Ticket to Work program, Congress may consider authorizing SSA to

develop a system to ensure that ticket holders are provided with accurate information on the services that each EN provides so they can make informed choices when seeking services; determine whether EN incentives, especially the Ticket program revenue sharing provisions, are consistent with the goals of the Ticket to Work program; and develop performance measures to identify employment outcomes of ticket holders served by ENs.

Develop Longitudinal Measures of Return-To-Work

Consideration may also want to be given for how SSA measures return-to-work rates. The current "snapshot" measurement of beneficiaries whose benefits are terminated due to work is important to identify due to annual appropriations decisions. However, this cross-sectional statistic includes a large group of beneficiaries who are added to and remain on the disability rolls every year, but will never work. Supplementing cross-sectional data with a longitudinal measurement of return-to-work rates of annual SSDI and SSI cohorts could help to provide a more accurate picture of how SSA's work incentives are enabling individuals with disabilities to return to the workforce.

Appendix A. Compilation of Key Ticket to Work July 2008 Regulatory Changes

Appendix B. Description of Employment Network Payment Systems

Milestone-Outcome EN Payment System

Four Phase 1 Milestones

Four Phase 1 milestones are available to compensate ENs for initial efforts that a beneficiary makes toward self-supporting employment. Milestone completion is based on earnings that a beneficiary makes above the TWP threshold. All Phase 1 payments to ENs are equal to 120% of the national average disability payment under SSDI (referred to as the "payment calculation base" or PCB) for ticket holders with earnings from work based on the following schedule:

Milestone 1 : A beneficiary has worked for one calendar month and has gross earnings from employment for each of those months that are above the TWP threshold. Milestone 2 : A beneficiary has worked for three calendar months within a six-month period and has gross earnings from employment for each of those months that are above the TWP threshold. The month used to meet the first milestone can be included in the three months used to meet the second milestone. Milestone 3 : A beneficiary has worked for 6 calendar months within a 12-month period and has gross earnings from employment for each of those months that are above the TWP threshold. Any of the months used to meet the first and second milestones can be included in the 6 months used to meet the third milestone. Milestone 4 : A beneficiary has worked for 9 calendar months within an 18-month period and has gross earnings from employment for each of those months that are above the TWP threshold. Any of the months used to meet the first 3 milestones can be included in the 12 months used to meet the fourth milestone.

Phase 2 Milestones

Following the successful completion of Phase 1 milestones and as a ticket holder's earnings progress toward self-sufficiency, ENs can become eligible to receive a series of Phase 2 milestone payments. The earnings standard is increased to the SGA threshold for Phase 2 milestones ($1,070/month or $1,800/month if blind for 2014) as opposed to the lower TWP threshold ($770/month for 2014) under Phase 1 milestones. Monthly payments to ENs are equal to 36% of the respective PCB for SSDI ($1,130.89 for 2014) or SSI ($650.44 for 2014) for each month that a ticket holder's gross earnings from work are above SGA based on the following schedule:

up to 11 payments for SSDI ticket holders ($471 for 2014), or up to 18 payments for SSI ticket holders ($234 for 2014).

Outcome Phase

If a ticket holder's work activity satisfies the requirements for both Phase 1 and Phase 2 milestones under the Milestone-Outcome payment system, ENs can potentially collect additional monthly payments in an "outcome" phase for ticket holders that have earnings sufficient for a zero cash benefit status. That is, the ticket holder has sustained earnings long enough at the SGA level that they are no longer receiving any cash payments from SSA. For ticket holders that qualify for the outcome phase, ENs can receive additional payments that are also equal to 36% of the respective PCB based on the following schedule:

up to 36 payments for SSDI ticket holders ($407 for 2014), or up to 60 payments for SSI ticket holders ($234 for 2014).

Outcome-Only EN Payment System

Under the Outcome-only payment system, ENs can receive payment for ticket holders that have earnings sufficient for a zero cash benefit status. Payments for SSDI ticket holders can be made for up to 36 months and up to 60 months for SSI ticket holders. Payments to ENs are equal to 67% of the PCB for SSDI ($758 for 2014) and SSI ($436 for 2014).

Appendix C. SSDI and SSI Employment Supports

Appendix D. Acronyms