Backlash on Y-12 benefit changes

As noted in earlier posts, a lot of Y-12 retirees are upset and unhappy with the changes to their benefits via Medicare supplement offerings put into place earlier this year by Consolidated Nuclear Security, the managing contractor at Y-12 (and its sister plant, Pantex, in Texas). I’ve heard from a number of the retirees who felt betrayed by the changes — and what they believe to be higher costs for reduced benefits — and the difficulties in working through the health exchange administered by AON Hewitt.

y12overviewAt its annual meeting last month, the leadership of the Coalition for Oak Ridge Retired Employees basically told retirees that there wasn’t anything they could do to halt the changes, but — individually and collectively — many of the retirees have taken their case to elected officials, contractor management, Energy Secretary Ernest Moniz, and anyone who else who could potentially be of help. “We retired knowing what our costs were approximately going to be for health care insurance knowing the premiums would rise, but never thinking we would have to pay these staggering co-pays and deductibles,” one retired Y-12er wrote. “We were given a benefit package when we retired and it is unethical to strip that away.”

Dave Mason, outgoing president of CORRE, said the benefit changes that have already taken place for retirees at ORNL and now at Y-12, will likely be coming in the future for retirees under the contracts of UCOR (cleanup manager) and National Strategic Protective Services (security contractor at the lab).

In the meantime, new healthcare packages were announced for the salaried workers at Y-12 and the pre-65 retirees, and those, too, have raised the ire of workers who don’t think their long-time loyalty is being respected or rewarded.

Asked about the changes in the Y-12 health-care benefits, Tyler Threadgill, a spokesman for U.S. Rep. Chuck Fleischmann provided this statement:

“The employee benefits of our contractor workforce are extremely important to them, their families and our community. While this was ultimately a decision made by the Department of Energy, Congressman Fleischmann has personally advocated for the retirees at the highest levels of the Department and will continue to do so. The Congressman has also been working with CORRE on a regular basis and looks forward to a continued partnership during these difficult financial times.”

Regarding the new health plans being offered to salaried workers (and pre-65 retirees) at Y-12, Consolidated Nuclear Security spokesman Jason Bohne said some of the changes were necessary for the contractor to achieve compliance with Department of Energy rules for spending levels on benefits. He said CNS is not benefiting financially from the change in the health benefit packages.

Bohne offered this explanation of the changes:

“We recognize that there are many changes in motion, and that the impact of these changes occur at a personal level for our employees and retirees. We have conducted many face-to-face meetings with employees and retirees at Y-12 and Pantex so we can describe the changes and answer questions. Our intent has been to be compliant and competitive with a plan that also continues to serve our retirees well and provides benefits that meet the needs of our employees and our families—all while being good stewards of taxpayer dollars.

“The new plan is different from the current benefits program. We redesigned our benefits program to provide an attractive package for current and future employees, while remaining in compliance with DOE requirements.

“DOE Order 350.1 requires contractors to evaluate their benefits program against comparative organizations (those with similar types of work, and employees of similar educational and skill levels) every few years and maintain the program at 105% or less than the average of the comparators.

“Because of the contract competition and subsequent protests, that evaluation hadn’t occurred at Y-12 or Pantex for several years. It was overdue. Our new benefits design is intended to return our benefits package into compliance. CNS earns no fee for cost savings related to benefits changes—we did that intentionally to avoid any conflict of interest. Our new plan remains among the top benefits packages among our comparators. We are making every effort to be competitive with the industries in which we compete for talent.

“The list of 27 comparator organizations in our study is proprietary, but it includes similar organizations in government, higher education, and commercial industries—including Oak Ridge National Laboratory, Los Alamos National Laboratory, and the Tennessee Valley Authority.”

Regarding the post-65 retirees, CNS spokeswoman Ellen Boatner earlier stated there were options available to retirees that would provide the same level of benefits as the previous insurance supplement. Boatner said, “There are several plans available through the Exchange that are almost identical in benefits coverage to the Medicare supplement plan currently provided to retirees. On average, premiums are comparable. The actual cost will, of course, depend upon the plan selection of the individual retiree.”

It’s difficult, of course, to accurately characterize how many people are upset by the changes or feel victimized. Mason said CORRE did a survey of ORNL retirees about a year or so after the changes in their health benefits went into effect and most of the respondents indicated they were OK. That could prove true with Y-12 retirees, too, once the newly chosen policies have gone into effect and people adapt to the changes. That remains to be seen.

I heard from one Y-12 retiree who’s already seeing a brighter side to the changes enacted by Consolidated Nuclear Security. He and his wife did a close evaluation of the options and — based on their initial review — believe they’ll get essentially the same coverage at an annual cost saving of about $3,000 or 40 percent. “For us, the Company’s contribution of $300 a month is huge,” he said.

He noted their situation could be helped because they don’t have much medicine to procure. Or, he added, “Maybe we’re just lucky.”

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About Frank Munger

Senior Writer Frank Munger covers the Dept. of Energy's Oak Ridge facilities and many related topics — nuclear weapons, nuclear waste and other things nuclear, environmental cleanup and science of all sorts. Atomic City Underground is, first and foremost, a news blog, but there's room for analysis, opinion and random thoughts that have no place else to go.