SSA tests system for employers to file wage data electronically

Social Security Administration is testing ways to electronically gather wage information
from employers.

SSA is running a limited pilot with about 5 percent of employers, each of which file
their data electronically using dedicated circuits, deputy associate commissioner Kim
Mitchel said.

The nation’s 5.2 million employers must annually submit wage information for each
of their employees, whether they employ one person or thousands.

The data is used to calculate Social Security benefits and is included on the W-2 forms
that workers submit with their tax returns to the IRS.

SSA is offering the program to selected employers. “Some said yes, others
no,” Mitchel said.

Automated Data Processing Inc. of Roseland, N.J., for example, was very enthusiastic
about it, she said.

SSA would like to have 15 percent of the nation’s employers filing electronically
next year, and in two to three years offer it to all businesses, Mitchel said.

But to do this, the agency will have to move from dedicated lines to a system that can
handle a much larger number of users, Mitchel said.

One possibility is a virtual private network.

SSA is also considering using a value-added network that could provide services beyond
transmission, such as automatic error detection and correction, protocol conversion, and
message storing and forwarding.

For the pilot, SSA is using Connect:Direct and Connect:Mailbox from Sterling Commerce
Inc. of Dallas. Connect:Direct is data exchange software that provides point-to-point
electronic de-livery across multiple platforms.

Employers only need standard communications software to file their wage data
electronically, Mitchel said.

Connect:Mailbox is a secure data repository where authorized users can access the
information received.

Although both products have security features, SSA is also using a security product
called Top Secret from Computer Associates International Inc.

“Security is one of our main concerns,” Mitchel said.

So far, SSA has not used the Internet for transmission because of security concerns,
she said.

SSA is also considering use of a public-key infrastructure to ensure the authenticity
of the data it receives from employers.

A PKI system would secure the electronic transmissions and ensure that senders are who
they claim they are.

To use PKI, the agency must establish the authorities and procedures for generating
certificates containing each user’s identification, encryption keys and time-date

Privacy is also a concern, Mitchel said. “You can have a very secure system and
still have a privacy problem,” she said.

SSA is using an old mainframe system to process the pilot data, Mitchel said.

The wage reporting information is housed on a Hitachi Data Systems Corp. mainframe and
stored in an antiquated custom database, she said.    

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