WIC EBT Mandate Could Be a Struggle For States


The Healthy, Hunger-Free Kids Act of 2010 mandates that state agencies offering Women, Infant and Children (WIC) benefits must implement an electronic benefits transfer (EBT) system by October 1, 2020. For states that means making a shift away from WIC Checks to putting this information on a card like with SNAP or TANF.

For the uninitiated, WIC is part of a national safety net of food programs that focuses specifically on moms and newborns. Mothers who are pregnant or have children under the age of five, and are 185 percent below the poverty line, can qualify for food assistance that pays for pricey items like infant formulas or milk. According to information from the United States Department of Agriculture (USDA) since the program began in the mid-1970s, the number of WIC participants has grown to 8.3 million at a cost of $6.3 billion in 2014. Right now, in the majority of states those 8.3 million moms get their WIC benefits in the form of a paper voucher.

While adding WIC to a transfer system already in place sounds easy on the surface, it means a change in how caseworkers manage benefits delivery. Eligibility systems need to be modernized along with the shift to a card. Texas recently moved its WIC data to the cloud with Microsoft, but all of this makes for an added cost.

Retailers also have a big stake in this update. Right now, individuals on SNAP or TANF can go to their local grocer and swipe a card to pay. However, adding WIC requires payment processing systems to be updated with new codes on both the merchant side and the transaction processor side. These updates must fall within a certain schedule because stores won’t update during the peak shopping season from November to January. Retailers may also have to foot the bill for adding a WIC button to point of sale kiosks. So, for states that are slow on the uptake, deployment could be delayed unless project planners take all of these competing timelines into account.

Changes in how WIC is funded can also be a headache for retailers. New Mexico recently entered into a contract relationship with Abbott Nutrition, which makes Similac Infant Formula. That means from October on, other formulas won’t be covered and merchant systems will need to be updated before the November code freeze. New Mexico works with North Carolina and Arkansas to find contract relationships like this to get rebates from the formula manufacturer on each can purchased with WIC.

New requirements on cards and card readers also add a liability concern. As of October 1, providers of cards and card readers that aren’t updated to the Europay, MasterCard and Visa (EMV) specifications, will now be liable for fraudulent payments. This is true for merchants with outdated kiosks, and for the government if it uses outdated technology. The new specifications move away from the magnetic stripes on the backs of cards and rely instead on a microchip embedded into the top of a card.

Taken together, all of these factors might explain why at the halfway point of the implementation period, so few states are online. Out of the 90 WIC programs in the U.S. only 15 have moved over to EBT.

“In the first five years we have seen a lot of planning, but not a lot of doing,” says Jerry Owens, Director of Business Development at Xerox Public Sector Solutions in an interview with CivSource. Xerox just released Xerox Connect Processing Solution (XCPS), a digital system that offers states an on-ramp to transitioning to the new WIC EBT requirement. “A handful of states want to go live after the first of the year, but with the retailers code freeze in November, that’s going to be challenging,” he adds.

Michigan was the first to move over to a statewide card-based program as CivSource first reported in 2010, but it’s been slow going elsewhere. Oregon, for example, is changing over but with a two-county pilot project. At this point in the calendar year, adding others may not happen until 2016. “Most of the new systems coming online right now are pilots,” Owens explains.

Some smaller states are considering ways of banding together as a group in order to make the shift more economical and scalable.

The Xerox offering is a web-based system that distributes and tracks WIC benefits –such as supplemental foods, health care referrals, and nutrition education – for citizens, merchants, and the state. So far, Xerox is managing WIC EBT delivery in Michigan, Virginia, and Vermont. Oklahoma, Connecticut, and Indiana will go-live in 2016 as well.

“I think it’s safe to say it’s going to be a mad rush at the end for everyone. A bunch of RFPs are going to come out at the same time, and it takes a lot of time and resources on the vendor side to respond to each one of those. We’re also going to have a lot of concurrent implementations as a result of that rush,” Owens said.