CORRE Blog

Larry Long has additional thoughts on the possible BJC medical cost increases. 

(Incidentally, Al Brooks made some interesting comments on Larry's posting just below this one.)

While announcing that the Bechtel Jacob's (BJC) intended increase in insurance cost for retirees has been placed on hold, DOE has indicated that BJC intends to conduct a reevaluation. In doing so, BJC needs to recognize that DOE established two groups of employees/retirees at the former K-25 site. There are grandfathered employees and employees hired since 1998. "Grandfathered Employees For purposes of all Contract Work, the definition of "contract" includes DE-AC05-98OR22700 and DE-AC05-03OR22980 (collectively "these Contracts") and shall mean individuals who meet both of the following conditions:

Larry Long writes: 

 Bechtel Jacobs has notified us that they will be raising the cost of the Pre-Age 65 medical insurance from apx. $406/mo to $812.50/mo beginning in January. They have implied in their announcement that they have to do this to comply with DOE requirements.

 It is true that all of the DOE contractors must comply with these requirements, but there is a great deal of contractor latitude in how they comply. It is not true that they had to raise these piece of the benefits. BJC chose to raise this particular piece. They could have choosen to stay in compliance with the DOE requirements in other ways. The changes that they proposed are changes of convenience. They need to look closely at why the cost are as high as they are. Maybe a root cause analysis would reveal some inefficiencies, You never know when you take the convenient way out and you don't look a little.

 It should be noted at this point that none of the employees hired by BJC after 1998 will receive an Oak Ridge Pension or any Oak Ridge benefits when they leave here. Kinda convenient. Also, both Y-12 and ORNL have been able to comply with these requirements without passing a 100% increase on to their Pre-Age 65 retirees. 

They have supposely conducted a study and compared benefits to a list of DOE approved competitors. I wonder how this list compares to Y-12's or ORNL's list. Give me enough time and the backing to contact other DOE facilities and I believe that I can develop a very creditable list of DOE facilities that will demonstrate the need to lower the cost of our benefits to stay competitive with our competitors. I don't have the list of competitors, but it should be of other DOE sites, not Bechtel peers. After all they don't even get a pension.

The total cost of the Pre-age 65 BJC insurance is $1625.01. Based on some of my research, this cost at Y-12 is less than $1200. Wonder why! Couldn't be administrative cost could it? I don't know why, but perhaps there is some cost savings here that could cover what they are trying to do me. By the way, my total cost is over $10,000 dollars a year and that doesn't preclude them from raising it future years. Try managing that on a fixed income with gas prices and taxes. I should have kept working, but how could I have predicted this.

Now, the Oak Ridge Coalition of Retired Workers (CORRE) has been working to get DOE to bring the pensions more in line with the other DOE facilities across the country. Looks like they may have missed the boat. Our pensions are protected by law. Our medical benefits are not. Looks to me like, they plan to take our pension through our medical. Anyway, at this time, I would be happy to maintain what I had. Unless something changes between now and the first of Jan., I will have apx. $406 less each month to pay my bills. I don't expect that I will ever see a pension increase to compensate me for this, let alone an increase above that.

There are many problems with what is happening, but it appears to me that a basic change in DOE philosohies would help a great deal. DOE is continuing to split contracts and make smaller and smaller units. Folks, the sum of the parts, don't equal the whole. I'm sure that all the DOE requirements for managing a benefit program flow to each of these smaller units and they cannot begin to manage as efficiently with such a small base. They should keep the benefit groupings large to take advantage of cost savings. Put us back with Y-12 and ORNL. Many of us worked for Y-12 and ORNL for part of our careers; we just happen to be with BJC when we retired. Also, DOE should look at competing the management of our benefit package. I would love to have this contract.

Anyway, I worked many long hours for Union Carbide, Lockheed Martin, and Bechtel Jacobs and feel that I made many contributions. I don't nor do the other retirees deserve to be treated this way.

P.S. I have learned that BJC is sending us a new letter this week supposely reducing our contribution. I'll wait to see what it says before commenting further.

Kenneth Cook has sent the following letter to Representative Davis, Senator Alexander and Senator Corker: 

I am a retired Bechtel Jacobs Company (BJC) employee.  As you know, BJC is a subcontractor to the Department of Energy (DOE) Oak Ridge Operations (ORO) Office Environmental Management (EM) Program for the Oak Ridge Reservation.

Prior to retirement, I spent thirty-two years working within the DOE complex at the Paducah Gaseous Diffusion Plant, the Oak Ridge Gaseous Diffusion Plant (K-25), and the Oak Ridge National Laboratory (X-10).  I worked in both the diffusion and centrifuge uranium enrichment programs and the environmental restoration program.  When I completed all the requirements for a full pension, I retired in 2002.  I am currently sixty years old, i.e. a “pre-65 retiree.”

On Friday, November 16, I received an information package from BJC presenting information on various benefits.  This is usually standard practice this time of year.  The package usually contains information about the pension plan, miscellaneous health care benefits and any premium increases for the coming year by the healthcare provider, i.e.

I have included a copy of the announcement received by the retirees.  As you read this announcement, please notice the following:

• The cost sharing is targeted toward retirees only.  Current employees are not affected with respect to cost sharing.  Why not?  This action could possibly be construed as age discrimination;
• Who were the “DOE approved competitors” that were benchmarked?  I can’t speak for the entire retiree population but I would like to know who these “approved competitors” were.  For instance, did they include UT-Battelle, the current (X-10) operating contractor, or BWXT Y-12, the current contract Y-12 operating contractor. These contractors would have the most similar competitive packages to that of BJC.  If UT-Battelle and BWXT are both DOE contractors, why are they not subject to the same cost sharing?  It would seem that the same DOE Order 350.1 would apply.  It does follow however, that should BJC be successful with this action, DOE will expect these contractors to follow suit placing other retirees at risk.  Although not confirmed at the writing of this letter, it appears that DOE has recently required BJC to re-classify itself as a construction company, which clearly they are not, and benchmark against that industry.
• Unfortunately, this is the typical way BJC deals with its employees.  It sends out time-sensitive announcements of this type on a Friday in many cases just prior to a holiday.  It makes it very difficult to get in touch with anybody at BJC.  I tried to make contact Friday but was routed to an answering machine.  You should also notice the short period of time allotted for retirees to make any changes in their medical or dental coverage.  We have until November 30 to decide if we want to keep our healthcare coverage, make changes, or cancel…as if that were truly a viable option at this time.  Notice that the “Open Enrollment” extended from November 12 through November 30 and we received the notice on November 16 effectively losing four days.  Whatever decision we make must be made during this Thanksgiving week or the next.

This does not seem to be an equitable action.  There is also some question with respect to profit motive.  BJC is a cost-plus-incentive fee contractor which means that they are reimbursed for normal operating costs and receive an additional fee based on their performance against some baseline.  My understanding is that healthcare cost is reimbursable to BJC, and is not fee bearing.  However, if there is a cost savings, the funds can then be reprogrammed back into the DOE ORO EM operating budget which can then be utilized by BJC via additional work to obtain additional fee.  At best, this has the appearance of an indirect way for BJC to profit from this action and, in the worst case, the retirees are subsidizing EM’s operating funds.

The Oak Ridge DOE complex was once managed by one subcontractor, i.e. Union Carbide Nuclear Division and then Lockheed-Martin Energy Systems.  Since then, DOE has split the management of their programs among several contractors, i.e.

I ask that you look into these matters and provide any assistance possible.  There has to be a better way.  As I stated before, the BJC cost-sharing change will be devastating to the retirees as it is neither equitable nor reasonable.  A 100% increase in premium cost to the retiree will have negative quality of life impacts.

I look forward to your response and I thank you for your time and consideration.

Larry Long writes: 

Hello Dave, it has been a while since I talked with you. Hope things are well. Anyway, I would like to post something on the blog. BJC has notified us that they are going to raise our cost for medical insurance from $406 to $812. Everyone appreciates the need to get our pensions increased, but everyone should also understand that medical benefits at this time are far more detrimental to our livelihood. This increase effectively reduces my pension by $406/mo. Now a pension increase would nice, but I don't think that I will ever be compensated for this loss.

I have learned that BJC will be sending a letter rescinding part of this increase. I don't have the details but, sounds like a little bait and switch. The fact remains that our pensions are protected by law, our medical benefits are not. This is an area that we need to all get involved in.

 I have added your blog as a favorite.  I retired about 8 or 9 years ago.  Took a VRIF and the level income option.  When I turned 62 I started taking Social Security and my pension went down to approximately $318 per month (which is rediculous in itself).  Anyway I have had NO cost of living increases in all that time.  Right now my net monthly pension benefit is approximately $65 after medical and dental are deducted.  Effective Jan 2008 after the latest medical insurance increase I will owe money each month to pay medical and dental- my pension benefits are GONE except for the medical and dental insurance.  THIS IS A COMPLETE INJUSTICE AND INSULT to an employee of 22 years.  Obviously I feel like I am being denied what was supposed to become the "golden years".    Please feel free to forward this email to anyone who might be able to "actually help" (but not to those who just say they will but never really do anything.

Thanks,

Ken Murphy

Here is Congressman Lincoln Davis' recent letter to Department of Energy Secretary Bodman about DOE withholding Part D Medicare funds.

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September 21, 2007

Secretary Samuel Bodman
United States Department of Energy
1000 Independence Avenue, SW
Washington, DC 20585

Dear Secretary Bodman:

I am writing this letter on behalf of several of my constituents, who are retirees from Department of Energy facilities in Oak Ridge, regarding their continued efforts to obtain an increase in their pension benefits. Several constituents as well as members of the Coalition of Oak Ridge Retired Employees (CORRE) have contacted my office requesting additional assistance with this issue.

In recent correspondence forwarded to my office, representatives from CORRE have also expressed their concerns about the possible withholding of Part D Medicare funds from contractors for partial payments of their costs of maintaining drug benefits for retirees.

Since taking office, I have worked with my colleagues in the Congress to address CORRE’s pension issues as well as other issues important to the Oak Ridge facilities. It is my hope that through working with contractors, the Department of Energy, my congressional colleagues and all CORRE members, this situation can be resolved in the very near future.

I would respectfully request that the Department of Energy revisit the retirees’ concerns about their pension benefits and attempt to resolve this issue in such a manner that provides fair and equitable treatment to all concerned. I would also request any information you can provide which would address concerns expressed by members of CORRE about the Part D Medicare funds.

Thank you for your consideration in this matter. I look forward to hearing from you in the near future. Please do not hesitate to contact my office with any additional questions regarding this issue.

Sincerely,

Lincoln Davis
Member of Congress TN-04

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We retirees appreciate very much the initiative of Congressman Davis.  The problem, however, is that DOE takes 3 to 9 months to reply to these letters.  DOE Headquarters needs to make quicker response to these requests that deal with DOE's unfair treatment of people.

At the Annual CORRE meeting on September 26, the Medicare Part D subsidy was discussed. A member asked for that information to be repeated here. Charlie Kurykendall supplied the information below.

-The Editor

The essence of the Medicare Part D subsidy story is this: Many
private companies have eliminated their medicare supplementary
medical insurance for retirees and the government was trying to stem
the tide by offering to provide a "subsidy" to any company willing to
continue the supplementary medical insurance. All DOE prime
contractors have continued their coverage and DOE got the subsidy. In
Oak Ridge we have been told that our supplementary insurance costs
are split 50/50 with the contractor. If DOE got the 28% subsidy why
wasn't half of it applied to cutting our portion of the Major Medical
Medicare Supplementary Insurance.

There is evidence that DOE is circumventing the intent of Congress by withholding Part D Medicare funds from contractors for partial payments of their costs of maintaining drug benefits for retirees.

Our understanding is that the 2003 Congress passed the Medicare Improvement Act to benefit older citizens. This Act established a The DOE contractors were apparently discouraged by DOE from applying for the subsidy. In the case of the Oak Ridge, Tennessee facilities, UT-Battelle LLC, operator of Oak Ridge National Laboratory, applied for the subsidy, but that request was rejected by DOE. BWXT LLC (operator of the Oak Ridge Y-12 Plant) did not apply for the subsidy after it heard about the rebuff of UT-Battelle’s application. We do not know whether other DOE contractors in Oak Ridge applied. Since the contractors split the cost of their drug benefit with retirees on a 50-50 basis, the easiest way for them to apply the subsidy would have been to apply it to the total insurance cost (and thus reduce the cost) and then split the remaining cost on a 50-50 basis. However, the contractors have not received this subsidy from the DOE.

In other words, the Part D supplement could have been used to reduce your insurance premiums. It has not been. Retirees might want to ask their congressmen–"Why not?".