Celebrating 51 Years 1961-2012
VOLUME 16/ NUMBER 2
the system wastes an estimated $750 billion a year.
That’s in one year!
By Thomas J. Mackell, Jr.,
Association of Benefit
Unnecessary services, like repeated tests: $210 B;
HEALTH CARE WASTE:
RATIONALE FOR CHANGE
As a nation, we devote almost one-sixth of our
spending to health care or roughly 18% of our GDP.
How to pay for our health care coverage has been
an ongoing challenge for individual Americans, their
employers, providers, doctors, hospitals, politicians
and anyone else in the industry for many decades.
The country has been in a massive debate over
President Obama’s health care initiative for the last
few years and the ultimate political resolve is still up
in the air. We do not know how this will ultimately
One thing we do know is that we have to get our
arms around this issue or the costs will gobble up
the nation in the next decade or so.
Yet, in spite if all of this attention and concern, the
American medical system still squanders 30 cents
of every dollar spent on health care according
to data provided by the highly respected Institute
Their recently released report estimated that
excess costs in health care in 2009 showed that
The following recites what contributed to the waste
according to the study:
Paperwork and excessive administrative costs:
Inefficiently delivered services, like a scan
performed in a hospital rather than at an
outpatient center: $130 B;
Prices that are too high: $105 B;
Fraud: $75 B;
Missed prevention opportunities: $55 B.
The report depicts a system that does save lives
in miraculous ways, but it is extremely expensive
The human toll results in doctors failing to deliver
the best and most timely care to patients.
One blatant example of this wasteful system is
the discarding of kidneys. In 2011, 4,720 people
died while waiting for a kidney. 2,600 kidneys
were recovered from deceased donors and
then discarded without being transplanted!
(continued on page 2)
It is with great sadness that we announce
the untimely passing of one of our long time
members, Phyllis Miranti of DD Services, Inc. Our
deepest and sincere sympathy is extended to her
family and friends. Keep them in your prayers.
IN THIS ISSUE . . .
Pg. 3 Contract Payroll Pension Benefit Processing: A Practical Guide on What to Review, by Sheila Selig, YMS Management Inc.
Pg. 4 Pre-Paid Legal Plans, by Michael Morici Sr., Esq. and Robert Morici, Esq., Morici & Morici, LLP
Pg. 5 Is Your Fund Office Ready For ICD-10? by Jeff Herman, Basys, Inc.
ABA OFFICERS & DIRECTORS
Thomas J. Mackell, Jr., Ed.D., President
United Benefits & Pension Services, Inc., Chairman
Gemma de Leon, Vice President
Local 1102 RWDSU/UFCW
George L. Bueno, Treasurer
OPEIU Local 153 Pension Fund, Director
Charles Hamilton, Secretary
RWDSU/UFCW Local 338 Health
& Welfare Retirement & Dental and
Legal Services Fund
DIRECTORS AT LARGE
Ginger Hourihan, Administrative Manager
Associated Third Party Administrators
Peter Klein, Fund Administrator
Local 26 IBEW-NECA Joint Trust Funds
Thomas Ryan, Fund Manager
They wound up in a research laboratory or medical
The current transplant/donor process is made
inefficient by an outdated computer matching
program; stifling government oversight; the over
reliance by doctors on inconclusive tests; and, even
federal laws against age discrimination.
Health care economists and policy experts believe
that political changes and financial pressure
will compel insurers and health care providers
to squeeze out costs and slow down the health
spending growth that has plagued the system for
decades. I hope that their predictions are right.
Trustees and administrators of funds and other
large users of health care and insurance programs
must put more pressure on their providers to be
more diligent about how their health care dollars are
Individuals who serve as trustees are typically
accomplished negotiators. They should apply their
finely tuned skills and press the providers to “get
the best price” for the services rendered.
Just as each individual needs an advocate in
dealing with health care professionals, the system
needs advocates to insure that providers squeeze
every nickel out of the excessive waste. We have
to take the offensive on this issue.
The future of the health care system and our nation
is too important to do otherwise.
IBT Local 282
David B. Stewart, CEBS, Funds Director
Empire State Carpenters Fringe Benefit Funds
(631) 952-9700, ext. 150
Tom Mackell has
written a book
entitled When The
Good Pensions Go
Away: Why America
Needs a ‘New
Deal’ for Pension
Reform. It was
published by John
Wiley & Sons and
is available NOW
and fine bookstores
A PRACTICAL GUIDE ON
WHAT TO REVIEW
By Sheila Selig, YMS Management Inc.
Retirement income security has become the critical
headline issue of the 21st Century. Over the last
thirty years we have witnessed the demise of the
defined benefit plan in the private sector.
In more recent times, the desire to discontinue
defined benefit plans and converting them to
defined contribution plans is working its way through
the public sector with a vengeance.
In the aftermath of the financial crisis, we are also
witnessing a surprising number of pension funds
that are wrestling with serious unfounded liabilities.
The net result is that plan sponsors are hardpressed to get the best bang for their buck in order
to provide benefits and find savings wherever
possible. The pressure is on.
Few pension fund administrators will cite processing
payroll pension benefits as one of their favorite
tasks. The following deals with why some institutions
choose to contract out these services. It may make
sense for you to review your pension benefit systems.
1. Cost: Large organizations can afford to maintain
payroll departments which process both employee
payroll and pension payroll benefits. For small to
medium sized funds, however, an in-house pension
payroll benefit department is a money burner. Do the
math. Figure out how many hours your employees
are devoting to pension payroll-related activities,
calculate how much you are spending and compare
the amount to the plans offered by several outside
pension payroll-services providers. Also, be sure to
factor in the money that your business spends on
tasks like printing and distributing checks, creating
tax documents, bank reconciliations and the like.
You will probably be surprised by the result.
2. Productivity: Pension payroll management is a
time-consuming activity. With this internal burden
removed, your employees can focus their energies
on more productive responsibilities.
3. Accuracy: Pension payroll mistakes can be
painful, angering retirees and — more ominously
— the government when it relates to tax payment
obligations A good payroll-service provider is far
less likely to make a serious error than your inhouse staff. Furthermore, if a substantial error or
mistake is made, you can seek restitution from the
provider — something that you cannot do with your
4. Reliability: In-house payroll pension activities
function as reliably as the people doing the work.
With an outsourced payroll service, output speed
and quality won’t vary in accordance with vacations
and illnesses. The plan sponsor won’t have to spend
time helping new hires to understand and learn your
business’s pension payroll processing system. A
successful outside contractor’s business focus is
reliable and professional or they would not survive
5. Speed: Since pension payroll benefit services
providers are specialists with vast technical and
automation resources at their disposal, they can
process even the most complex pension payrolls
at lightning-fast speed. Unlike most employers,
providers can also accommodate a temporary influx
of seasonal workers without acquiring new systems
that will remain dormant during the rest of the year
when their services are not required.
6. Insight: A good payroll-services pension provider
knows all of the ins and outs of payroll-related tax
laws and regulatory mandates at the federal, state
and local levels. Plan sponsors’ employees could
try to achieve the same level of understanding, but
it would take a considerable investment in time and
effort. Pension payrolls have the added complexity
of requiring dealings with 50 states and foreign
countries. Most employee payroll processing effects
local employees, however a pension payroll system
deals with retirees who are local, or live in other
states, or with some who may reside outside of
the U. S.
All-in-all, administrators have an obligation to review
all options and services in order to provide the most
efficient and effective devices to their beneficiaries.
Thursday, November 29, 2012
Thursday, February 7, 2013
Thursday, April 11, 2013
Thursday, June 27, 2013
Thursday, September 26, 2013
Thursday, November 7, 2013
RWDSU Union Office
30 East 29th Street, 5th Floor
New York, New York
ALL MEETINGS START
AT 12:00 NOON
James Duffy Memorial Brunch
Takes place during
the IFEBP Conference
Sunday, November 11, 2012
San Diego, California
Wednesday, December 12, 2012
St. Regis Hotel
Two East 55th Street
(at Fifth Avenue) in New York City
Honoring Harold J. Daggett,
PRE-PAID LEGAL PLANS
By Michael Morici Sr., Esq. and
Robert Morici, Esq., Morici & Morici, LLP
A pre-paid legal plan is a reduced cost service
offered to groups or individuals who are provided
with specific legal services from participating
attorneys and law firms. The fees associated with
a pre-paid legal plan are considerably less than
fees for hiring a firm or attorney independently. A
pre-paid legal plan can be structured in one of two
ways; in an “open” system, with subscribers to the
plan selecting attorneys or firms from a pool of
participating providers, or in a “closed” system in
which most or all of the services are provided to
the subscriber by one main law firm.
The pre-paid legal plan industry has existed as
early as 1907 in Europe but is a relatively recent
phenomenon in the United States dating back to
the early 1970s. Most pre-paid legal plans are
marketed by businesses whose services are sold
through third-party agents as part of a portfolio
of insurance services. Other plans are offered
through employees of the pre-paid legal company,
or through independent contractors working on
commission. Another common and popular form
of legal plans is offered via pre-paid legal service
companies, or even independent attorneys and law
firms directly. In 2008, the American Bar Association
and the United States National Association of
Attorneys General adopted a resolution supporting
the notion of pre-paid legal plans.
Pre-paid legal plans provide affordable civil
and criminal law services to subscribers for a
fixed, recurring charge, through a collection of
participating attorneys and law firms. Pre-paid legal
plans offer access to private sector legal services
that individuals or groups otherwise might not be
able to afford on their own. It serves as a substitute
to legal aid services but does not replace the public
defender system regarding criminal matters.
The law firms or individual attorneys who participate
in a legal service plan receive a steady stream of
clients and a streamlined billing process. The clients
obtain reduced fee legal services and consistent
(continued on page 5)
expectations regarding accountability. In many
plans, subscribers are covered mainly for specific
services, with additional retainer fees for other
services, and subscribers may be required to pay
additional fees for covered services when they
necessitate longer periods of time or more expertise
Commonly covered services include: general legal
advice with a free consultation; contract review;
preparation of demand letters on a client’s behalf;
drafting of wills, health care proxies, powers of attorney
and other legal documents; legal representation on
court proceedings and similar hearings for matters
such as defending against criminal charges, traffic
violations and general civil matters. Covered
services may also include representing plaintiffs
in commencing civil lawsuits on behalf of injured
parties in personal injury accidents or employment
compensation disputes. Pre-paid legal plans may
also be directed toward servicing particular target
groups including family plans, small business plans,
employee group benefit plans, commercial driver
plans, government employee plans, union plans and
similar types of groups.
IS YOUR FUND
By Jeff Herman, Basys, Inc.
It has been almost five years
since the recommendation was made to the
secretary of Health and Human Services (HHS)
that the regulatory process for ICD-10 adoption be
initiated. In August 2012, HHS officially announced
the new compliance date of 10/1/2014 for the use
of ICD-10 codes. ICD-10 replaces the 30-year-old
ICD-9 diagnostic coding system. ICD-10 is far more
robust than ICD-9, containing tens of thousands
more codes, including conditions and procedures
that were not in use or known 30 years ago. Many
benefits are expected from the use of ICD-10
codes, some of which are the reduced need for
additional medical documentation with claims,
coding for patient lifestyle and family history, and
improved quality of health care.
What does this mean to you?
Currently, all medical claims are coded with ICD-9
diagnosis codes. But for services incurred on or
after 10/1/2014, providers will be required to submit
ICD-10 codes on claims and health payers and third
parties will be required to accept them. This means
that there will be a period of time in which providers
could be billing with both ICD-9 and ICD-10 codes
and health payers could be processing with both
types of coding structures.
Diagnosis codes are used heavily in business
processes dur ing claims processing and
adjudication. They may determine benefits, impact
payments, and they are exchanged between third
parties electronically. Diagnosis codes are used so
pervasively in claims processing that the ICD-10
implementation has been likened to Y2K. In years
leading up to Y2K, every occurrence of a date had to
be inspected in every database and line of software
code to determine whether the year was two digits
or four. An analogous effort will need to take place
In today’s world, most medical claims are submitted
electronically. HIPAA 5010 paved the way for ICD(continued on page 6)
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10 by changing the length of the diagnosis fields to
accept both ICD-9 and ICD-10 codes and adding
qualifiers to indicate whether codes are ICD-9 or
ICD-10. HIPAA 5010 is a prerequisite for ICD-10,
however, compliance with HIPAA 5010 is only a first
step towards ICD-10 implementation.
To prepare for ICD-10, you must complete an
impact assessment to thoroughly review your
organizations processes and procedures. The
objective of this assessment is to identify all areas
of the business that will be impacted by ICD-10 so
that a plan and budget can be developed. Some
questions you need to answer are:
• What software uses ICD-10 codes and is it ICD10 compliant?
• What changes need to be made to operational
procedures to process ICD-10 coded claims?
• Which business rules (benefits determination,
claim payment, deductibles, etc) need to be
modified for ICD-10?
• What staff needs to be trained?
• Are claims exchanged with third parties, and if so,
do the third parties have an ICD-10 plan in place?
When do the third parties plan to begin testing?
• What documentation needs to be updated?
The impact assessment must be completed early
enough to give the health payer time to address all
areas that need to be modified for ICD-10. Health
payers that are not ready to accept claims with
ICD-10 codes on 10/1/2014 are at risk for claim
payment timeliness and non-compliance penalties.
Consequently, many organizations are already
well on their way to compliance. Many resources
exist to assist health payers with education,
preparation, impact assessments, consulting and
implementation. By preparing early, health payers
can be confident that they are ready on 10/1/2014.
Some commercial claims systems and internal
systems may not be able to effectively comply by
the Oct 1, 2014 deadline. Many database structures
with fixed-length fields which cannot accommodate
the additional digits without major modifications. You
should be engaged today with your claims system
vendor to understand their readiness as well as
how they plan to support you through the transition.
THE ABA IS PLEASED TO ANNOUNCE THAT
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SAVE THE DATE!
WEDNESDAY, DECEMBER 12, 2012
6:00 PM TO 9:00 PM
ST. REGIS HOTEL
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HAROLD J. DAGGETT
International Longshoremen’s Assoc., AFL-CIO
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If Your Computer System is the
Weakest Link in Your Operation,
Over 285 Fund Administrators and TPAs count on ISSI’s
easy-to-use computer systems to securely manage
their operations with maximum efficiency and
reliability, providing stability for the Funds, Trustees,
Participants, and Employers.
Fo r m o r e i n fo r m a t i o n , v i s i t o u r w e b s i t e : w w w. I S S I s y s t e m s. c o m
o r c o n t a c t B i l l We k l u k b y p h o n e : 8 5 6 - 9 1 0 - 9 1 9 0
o r b y e m a i l : B i l l W @ I S S I s y s t e m s. c o m
Syntonic Systems, Inc. (SSI)
A graduate of Columbia College,
where he studied history and
sociology, Robert started working
with computers in 1970 (when
computers were big and scary
instead of small and scary). He
founded Syntonic Systems, Inc.
(SSI) in 1977 and has counted many unions and their
associated trust funds as his clients since that time.
SSI provides a wide range of multi-employer and
municipal unions with software to handle all of the
administrative needs of the benefit offices, including
imaging and Web-based systems providing 24/7
access for the membership. His company also provides
software to support a variety of union functions. In
addition, SSI uses the same proprietary software
to perform administrative services as a third party
administrator (TPA) for benefit funds. Robert works with
a full-time staff of fund administrators and performs
many of the activities of a fund office, including health
and dental claims, Medicare retiree programs, and
pension and annuity fund administration.
Robert enjoys meeting with clients to evaluate their
needs and then coordinating with SSI’s staff of
programmers and administrative personnel on how to
best satisfy these needs. He very much appreciates
the challenges of the fund office environment. He has
been a member of the IFEBP since 1979 and has
participated in the ABA for many years.
Robert lives in New York City with his wife Hazel and
has two grown children. In his spare time, he likes to
read fiction and non-fiction, is an avid follower of the
ups and downs of politics, and the mostly downs of the
New York Mets.
The ABA is pleased to offer the Rx Well
Card discount prescription program. Visit
our website at www.assocbenadmin.com to
download your copy of the card from our
home page. Print the card and take it to your
pharmacy to take advantage of discounts
on prescriptions. Links are also provided on
the website for the following: (1) search for
medications and calculate pricing,
(2) locate pharmacies in a desired area
and (3) frequently asked questions.
Ginger Hourihan was recently
elected to serve as a Board
Member of the Association
of Benefits Administrators.
Ginger has over 16 years
experience with the Plan that
she currently administers, and
brings a wealth of experience
in Benefits Administration to this role. She is the
Administrative Manager for Associated Third
Party Administrators (ATPA), which is the 2nd
largest Taft-Hartley TPA in the country. She
manages ATPA’s New York office and oversees
the administration of the 32BJ School Workers
Pension Fund (formerly the SEIU Local 74
Pension Fund), which has over 9,000 participants.
Prior to joining ATPA, Ginger worked at SEIU Local
74’s Benefits Fund Office for over ten years, and
also served as a Trustee to their Pension Fund
and their Training & Scholarship Funds.
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OPEIU Local 153 Pension Fund
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