AH061 - Empowering Unions with Technology: A New "Hours Banking" System
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This episode of the Astonishing Healthcare podcast, we discuss how modern technology - Judi® - brings efficiency to the labor union market with Capital Rx's Mike Miele, FSA, MAAA (Senior Vice President of Insured Services), Christie Peperato (Manager, Payment & Operations), and Kelly Smith (Product Manager). Who knew that Capital Rx has an hours banking system? Why did we build one? Well, every hour a union worker works may be tracked and "banked" for benefits eligibility purposes. So, those hours and the accuracy of the reporting matter... a lot. And as Christie describes, it's been a manual, "painful" process forever.
After Mike explains the unique needs of union clients and what hours banking is all about, Christie and Kelly dive into how this newly developed system alleviates the pain by automating the tracking of work hours and eligibility for health benefits and having everything, including payments, processed in one system. By removing the manual burden on union office managers and making it easy for contractors to submit the data, managers and plan administrators can focus on what matters most: taking care of members' needs.
Listen below or on Apple, Spotify, or YouTube Music!
Getting health coverage through a standard employer is usually a straightforward process. A person gets a job, completes a waiting period, and receives their benefits. It is a simple path that most people are familiar with.
Labor unions operate differently. For union members, healthcare eligibility is a constantly moving target based on the number of hours they work across various contractors. This complex structure requires rigorous tracking, billing, and collections to keep health funds solvent and members covered.
In this episode of the Astonishing Healthcare podcast, host Justin Venneri brought three Judi Health experts into the studio to discuss a major operational hurdle for labor funds: hours banking. Mike Miele (SVP, Insured Services), Christie Peperato (Manager, Payment & Operations), and Kelly Smith (Product Manager) spent some time unpacking the historical challenges of union eligibility and how – leveraging a unified platform like Judi®, provides a path forward that drastically reduces administrative burden healthcare professionals face every day.
The Unique Challenge of Union Eligibility
“The labor market is very unique in the sense that, if you are running a labor fund, you are basically the health plan CEO and you are managing a budget,” Mike explained.
For example, if a union receives $13 an hour for health benefits, that money must cover the cost of care for members.
Accurate and timely collections from contractors are critical. Most unions maintain a surplus account for lean times, but the faster and more accurately funds are collected, the better the fund operates.
Unlike a commercial environment, union eligibility fluctuates. A worker must accumulate enough hours in their bank to achieve initial eligibility. Once that baseline is met, they must continue working enough hours each month to maintain it.
“Eligibility and health care coverage in labor unions is not like that at all,” Christie elaborated. “It’s a constantly moving target that you’re trying to hit, and it’s all based on these hours worked.
During busy seasons, workers can bank surplus hours to cover slower months. Tracking this fluid data requires a modern and unified system. Historically, the industry has struggled with disconnected platforms and siloed systems.
Overcoming Manual Claims Processing Inefficiencies
Before Judi, managing an hours bank was a highly manual, labor-intensive process. Office managers at local unions were responsible for verifying calculations and keeping records of work hours submitted by multiple contractors.
Christie spent eight years working in unions; she experienced this administrative waste firsthand.
“The most tech that was involved was a calculator and a spreadsheet to record the data,” she recalls.
This approach was painfully time-consuming and prone to human error. Contractors would mail handwritten census sheets along with paper checks. Documents could easily get lost in the mail and sent to the wrong address. These manual claims processing inefficiencies created immense pressure on union staff, who also had to juggle other full-time operational duties.
Building a Unified Healthcare Platform for Unions
Recognizing the lack of interoperability healthcare administrators faced, Judi Health partnered with one of its earliest union clients to build a custom solution. The goal was to eliminate data fragmentation and create a system that could handle the heavy lifting of eligibility tracking.
Kelly Smith helped build this new hours banking module from the ground up on the company’s existing technology architecture. The concept relies on seamless healthcare data integration.
- Data Input: The system ingests member information, hours worked, and life events.
- Automated Processing: It calculates eligibility based on the specific rules of the union contract.
- Data Output: It exports the final eligibility files to downstream systems.
The team also built an employer-facing portal. Contractors can log in, submit their timesheets, and instantly generate a remittance report. A payment processing integration allows them to make ACH payments directly through the portal.
By pulling hours tracking, eligibility, and payments into a single healthcare operating system, unions can bypass the healthcare inefficiency costs that plague older methods.
The Surprising Adoption of Self-Service Tech
One of the biggest concerns with launching new software is user adoption. Construction contractors are not always known for embracing new administrative workflows. However, the rollout of the self-service portal exceeded all expectations.
“I mean, this is a group of people who couldn’t agree on how to order a pizza. But every single one of them, without fail, and every one of them was basically, “Where has this been all my life?”
From the smallest contractors to the largest operations, users quickly adopted the platform. The ability to upload work hours, have the calculations done automatically, and submit payments online solved a massive headache for the employers.
In one instance, every single contractor signed up for the portal reported their hours on time. The level of healthcare data standardization is a game changer for union funds relying on predictable cash flow.
What This Means for the Future of Labor Funds
The implications of a modern healthcare technology platform extend far beyond basic tracking. Many Taft-Hartley funds still process their own claims using software that is decades old.
Consolidating hours banking, pharmacy claims, and medical claims into one unified workflow offers a true one-stop shop for self-administered funds. It paves the way for real time claims processing and sophisticated healthcare interoperability solutions.
Ultimately, replacing manual spreadsheets with an automated system gives union administrators their most valuable resource back: time.
With fewer administrative hurdles, union staff can focus on providing better service to their members and exploring future innovations.
If you would like to learn more about how Judi is enabling employers across lines of business to better serve their members, contact us today!
Lightly edited for clarity.
[00:27] Justin Venneri: Hello and thank you for joining us for this episode of Astonishing Healthcare. This is Justin Venneri, your host and director of communications at Capital Rx. And today we're going to be chatting about hours, banking and eligibility. This is a pretty union specific topic, but I think it has some interesting applications elsewhere and we'll get into that. So, we're going to talk about how we help unions and as some listeners may know, many of our earliest and longest running clients are unions. We're excited about having a new solution for them. With me in the studio today are Mike Mealy, SVP of Insured Services, Christie Peperato, Payments and Operations Manager, and Kelly Smith, one of our product managers who has worked on this on the tech side. Thank you all for joining me.
[01:08] Christie Peperato: Thanks for having us, Justin. It's great to be here.
[01:11] Kelly Smith: Happy to be here.
[01:12] Justin Venneri: Mike, I'm starting off with you. So, you've been on this show recently. We talked about Stop Loss. You were on last year with our Chief Commercial Officer, Kristen Begley, PharmD. So you're becoming a household name. Give us your quick background in case somebody hasn't heard you before or met you. And then it'd be great if you could start us off high level and maybe talk a little bit about labor unions, what it's like serving that market, what are their priorities, like, how do their needs compare or contrast with an average employer of similar size?
[01:40] Mike Miele: Thank you, Justin. It's good to be back. I am a health actuary by training and I was one of the first employees at Capital Rx. If you're listening to this, you're wondering what is a PBM doing with an hour's banking system system? So to just give you some context, as you mentioned, we've been serving the labor market. They were some of our first customers and after working with labor unions for many years, we were attending trustee meetings and listening to some of the pain points that labor unions have. And what always seemed to come up was billing collections, eligibility.
So, one of our earliest customers had said, “I wish Capital Rx would get into this business.” And we've always been on the road map to do pharmacy and medical claims processing, which is the subject of other podcasts. We always thought that the labor unions would be early adopters of whatever we were offering. And one of the absolute requirements that labor unions have is helping them with determining eligibility. Now, unlike a commercial employer, eligibility is based on how many hours that you work. So every labor union in the country has to have some kind of a tracking system to determine who is eligible, who is approaching not being eligible, who's being disenrolled from the plan, and that requires some kind of a system.
We're lucky to partner with one of our earliest customers to jointly develop this system, which we still haven't named yet. We tend to name our systems, so if anybody in the audience has any suggestions, we're all ears. But right now, we're calling it the Hours Banking system. What's interesting about it is it's a self-service model. Imagine you are a labor union that is involved in one of the building trades and there are multiple employers that are using union labor for their projects and they have to report every month how many hours each of their people worked. And that goes into some kind of a system that tracks and determines eligibility. That is how we got into this business.
And of course, it was a lot harder than we thought it was going to be. Of course, that never stopped Capital Rx from taking on a project. So I'm happy to say we've been successfully doing this for over a year now and we're ready to start talking about it. We were, you know, we were very much on a learning curve. And again, I want to thank our customers for being patient and supportive as we, as we develop the system.
[04:19] Justin Venneri: Big picture, given the difference in the “workforce” - right - and the way they're tracking. Christie, I'll come to you in a second. Are the budgets overall, are they under like a different type of pressure? Is it, are they fixed budgets? I mean, AJ [Loiacono] talks often about the different types of clients we have and the different priorities they have in terms of providing benefits to their members because a larger employer has a larger budget, and they have more flexibility, or others. Is there anything you can share? Just observations from the market over the last few years.
[04:49] Mike Miele: The labor market is very unique in the sense that if you are running a labor fund, you are basically the health plan CEO and you are managing a budget. So let's say that a labor union is being paid $13 an hour for health benefits. That has to be enough money to fund the health benefits. And what's critical to running a union successfully is to have accurate and timely collections of employer contributions on behalf of the employees that work for these various contractors.
So, it's very, very critical to their operation that they have adequate funds. Now most unions have what I call a “rainy day fund” so they are not literally running paycheck to paycheck. They have a surplus account where if collections fall behind, they can use that money, which we have seen over time. But it's the faster the money is collected, the more accurate the money is collected, the better the fund can operate.
[05:52] Justin Venneri: Got it. And Christie, you've got a lot of experience here. Can you tell us a little bit about your background and Your path to Capital Rx and hours banking from your perspective? Having done this, I'd love to hear what's significant about it or important.
[06:04] Christie Peperato: Sure, Justin. My name is Christie Peperato. I'm payment and operations manager for hours banking and eligibility here at Cap Rx. Prior to joining Cap Rx, I worked in unions for about eight years and during that time I worked as an office manager which means I was responsible for all things union including the day-to-day operations. And one of my primary responsibilities was these monthly contractor reports.
And it's in these reports that detailed work hours and all of the benefits that are owed were reported from the contractor to the local. It was my job to process these, which means I had to verify all of the calculations and keep records of all of the hours. And the fun part is I had to do all of that by hand.
[06:48] Justin Venneri: No way.
[06:50] Christie Peperato: Completely by hand. The most tech that was involved was a calculator and a spreadsheet to record the data. So can't even talk about pain point. It was just painful. I don't know any other way to put it. Very time consuming and you know, as Mike said, the importance of it being timely and accurate. So you put that pressure on and this was just one responsibility of an office manager in a union. It's not the only thing, you know, it's not the full-time job. It's just one piece of the puzzle.
To answer your question about hours banking from user level, to understand hours banking, it's probably best to think about it in the bigger picture of eligibility. Overall, I think what most people think of when they think about getting health care through their employer, it's pretty basic. You get a job, you work through your probation or waiting period, if there is one, and you get health coverage, set it and forget it. It's very straightforward, easy path. Eligibility and health care coverage in labor unions is not like that at all. It is a constantly moving target that you are trying to hit, and it's all based on these hours worked.
So, what an hours bank is, is every month the workers by their employers get their hours submitted and we put them into a bank of hours, and we collect and track those hours. And once you get enough hours in your bank, you get what's called initial eligibility. But it doesn't stop there. Once you've attained your initial eligibility, you have to maintain it. So every month you have to work enough to have an eligibility deduction made for every worker. If you have enough hours in your bank to make the deduction, you keep your coverage. If you don't, you lose your eligibility and then the process just keeps going. One feature is that certain times of the year there's a lot more work available. So they're able to bank those hours so that they can build up that bank of hours to help when there are slower or leaner months.
[08:45] Justin Venneri: Very interesting. Okay. Would this in theory, as I alluded to earlier, could this potentially work in other areas where there's part time employees or where an employer may say, you know, if you work enough hours, you could be eligible for benefits? Is that the concept is potentially down the road. If this works, it could be applicable elsewhere.
[09:02] Christie Peperato: Definitely. And I would certainly want to defer to Mike, who is our master of the book of business leader in that.
[09:12] Justin Venneri: Well, before we get back to Mike. Let’s go to Kelly for how it was built and how we did this. Kelly, thanks for hanging on with us until now. So same first question to you. Can you just tell us a little bit about your background, your path to Cap Rx, what you do here... Then I'd love to hear from a tech perspective a little bit about developing this hours banking solution, what went into it? How did you have to collaborate to do it?
[09:34] Kelly Smith: Yeah, absolutely. So my name is Kelly Smith. I'm a product manager here at Capital Rx. I've been here for about three years. When I started at Capital Rx, I was on our identity and access management team. So I really came in from the product and tech perspective. But about a year and a half ago, I was moved over to our TPA hours banking and eligibility team, really to build this new product from the ground up with partnership with one of our early clients and under the advisement of Christie, who is one of the frontline users of one of these systems and kind of running into these problems on a day to day basis.
It was really interesting to be able to work with people who lived these pain points. And as far as the actual building of the system, it's really we take data in, so the data we take in is member information, hours worked in this case, and then various life events. So based on those inputs, we calculate eligibility and ultimately export those to downstream systems as eligibility files. So: get data in, process, get data out. It all happens in an automated, flexible and configurable environment. And then we also built an employer-facing hours contribution system. So it's the same Judi that we know and love, but it's permission down to a level where employers can log in, they can submit their timesheets, and then we generate a remittance report for them where they can directly pay for those different contributions to the health fund or various other union dues or anything else they might have to pay for.
[11:16] Justin Venneri: So someone like Christie sitting in the seat doesn't have to manually calculate all of this stuff, but has like a dashboard, can monitor it, check it?
[11:24] Kelly Smith: Yes, exactly.
[11:25] Justin Venneri: And Mike, or maybe Christie, whoever would like to answer it, Mike, you said that it's self-service right? Now, is this a situation where we could be full service or self-service? How are you thinking about just the product and the flexibility of the solution?
[11:37] Mike Miele: The answer is both. We're currently actually using the system on behalf of a labor union, so we are actually doing the collections and dealing with the different contractors, dealing with employees that say, hey, I just got a notice that I'm running out of hours. That happens all the time. It's because that particular contractor that they work for is maybe a little bit late in making payments. So that day-to-day work is something that we can do for a labor union or we can license the software to you and you can get it done. Now, in both cases, though, the contractor is self-service.
I guess when we first took over this process, contractors were mailing in a handwritten sheet with a census on it and a check and they said, here you go. And that was prone to errors, and it might have gotten mailed to the wrong place. My dog ate my hours sheet. There's all kinds of reasons why that's a very inefficient process. So surprisingly, when Kelly and Christie started rolling this out to the contractors, they adopted it very quickly.
I was worried that they would say, well, we've always done it this way and I don't want to do it a new way. But that was not the case. And Christie, could you share what your experience was with the contractors?
[12:54] Christie Peperato: Of course. It was absolutely surprising to me. I was shocked. I mean, this is a group of people who couldn't agree on how to order a pizza. But every single one of them, without fail, every one of Them was basically where has this been all of my life? And this is the best thing ever. And we've been waiting for this because as end users they were drowning in this. So to be able to upload their workers hours and have the calculations done for them and make it, you know, so simple and so time efficient, it was well adopted.
From the smallest contractor to the largest contractor across the board, it was pretty amazing. And it was getting them to report on time. Which when I reported that to one of the co-chairs of the board of trustees, I was like we got a minor miracle going on here like you wouldn't believe. All of the people who are signed up for our contractor portal have actually reported on time.
[13:51] Justin Venneri: That's amazing. Sounds like a little bit of a case study here of going from totally manual to digital efficient data exchange, et cetera, world and payments. I'm curious Kelly, I know with our MPPP (or M3P) program, you know the payments are built into it. Are payments built into Judi for this too? Like how does that work?
[14:09] Kelly Smith: Yeah, so this is one of our products that we use the Stripe integration for. So as part of that employer facing portal aspect we have a ability to make an ACH payment. So all the contributions, tracking and payment can really be done in one unified system. So now we have hours tracking eligibility and then ultimately actually pharmacy and medical claims processing all happening in Judi which is incredibly powerful and efficient.
[14:43] Justin Venneri: Mike mentioned it earlier. Mike, the unified claims processing aspect of this, the setup seems pretty good. In this particular use case for Judi Health™, the combination of medical, pharmacy and down the road vision and dental get pulled into the fold too. In this situation it's all based on the hours worked. But can you talk a little bit about the attractiveness of that to this particular audience? Sure.
[15:09] Mike Miele: There are really two types of Taft Hartley funds that we've run into in our travels. I would say probably 30% to 40% of them pay their own claims. And what I mean by that is they actually have people in their office receiving claims and making payments using software of various levels of age. Most of these systems are pretty old. So we think that for that market, the way it was just described, how Judi is going to be able to pay pharmacy claims, pay medical claims and manage hours for eligibility. That is a one stop shop for those self-administered Taft Harley funds.
For the ones that just want to have a good medical experience. Again we're happy to pay the claims for you, manage your eligibility for you. And of course what we've been doing for seven years now is paying pharmacy Claims, which we will continue to do.
[16:04] Justin Venneri: All right. And I see Christie nodding along here on the screen. If you could see her, she's smiling like, yep, that would be easier. So thank you all for providing the update here. Last question. And I ask everybody, there's three of you, so I'll just go around. What's the most astonishing thing you've seen related to our discussion today that's safe and compliant to share? Of course. Mike, I know you've seen a lot having been a broker and consultant earlier on and here for a while. Would love to hear a good story or just something interesting or surprising about either hours banking or just dealing with the labor union end market. A good story you can share would be great to hear.
[16:36] Mike Miele: Well, I guess the thing that's the most astonishing to me is after all of these years, with the thousands of labor unions out there, there's very few choices available in the market today to purchase a system to process hours bank. There's a couple of systems on the market, but nobody really dominates the market. So, what most people have is some system or a process that they've developed over the years. And well, that's just the system we've always done or that's the way we've always done it. So, this just another example of a disruptive system. This is better, faster, cheaper, and looking forward to showing this system all around the union ecosystem to see what interest levels are. So far, so good.
[17:19] Justin Venneri: Christie, how about you?
[17:20] Christie Peperato: Astonishing. That's an easy one for me. Having been in the trenches, I know how powerful of a solution this is. So it's easy for me to be passionate about it when I talk about it. And what I find is it gives the most valuable gift of time so you have time to provide better service to your members. You have time to devote more energy and focus on future innovations. You can't say enough about the value of that.
[17:45] Justin Venneri: And Kelly?
[17:47] Kelly Smith: I think for me working on this project, something that I found the most astonishing was the complexity and all the exceptions and all the different rules in the contracts that we have been able to build into a system that's configurable and flexible enough to take all that complexity and make transparent and easy to use. Ultimately it allows us to inform our members quicker and to have transparency into accurate eligibility. And it's important because when these people go to get benefits that they're entitled to and maybe their family is sick that day, it matters when there's no hiccups in that process. So it's been awesome to contribute to that.
[18:28] Justin Venneri: Good stuff. Well, thank you all for joining me today. I look forward to hopefully having you back on for an update down the road and seeing how things go with new hours banking...
[18:35] Mike Miele: Justin, I have one more thing thing – we're going to be at the IFEBP meeting in Hawaii, so I hope you come visit our booth. We'll have the system in a kiosk and we can. We'll be demonstrating this system around the country before then. But I know everybody shows up at that meeting, so we look forward to seeing you there.
[18:53] Justin Venneri: When is that meeting?
[18:54] Mike Miele: In the fall. And Justin, you're welcome to join us.
[18:57] Kelly Smith: We're all trying to go to Hawaii. That's really why we're here. [laughter] Honestly, though.
[19:02] Justin Venneri: All right, well, thanks again. Have a great rest of your day.
