UC Gives 'Thumbs Down' to Lab Health Care Petitioners



By Independent News 6/18/09


    The University of California has effectively said “no” to petitions signed by more than 500 Livermore Lab retirees requesting reinstatement to the UC medical programs that covered them when they retired.
     “I understand your concerns with losing UC coverage when the Laboratory contract was changed at the end of 2007, wrote Katherine Lapp, executive vice president for business operations at the University, in a message to a number of the petitioners.  “However, UC employees do not have a vested right to retiree healthcare benefits.”  She noted that benefits had always been subject to change or termination at any time.
     The Laboratory retirees who submitted the petitions were once UC employees who had the University’s group health coverage plans under a succession of contracts that lasted more than 50 years.  Beginning in 2008, the new contractor, Lawrence Livermore National Security, used a health consulting firm and an insurance broker to move most retirees out of group insurance into individual plans that stand to become less secure and more expensive as retirees age. 
     The exception to date is Kaiser, which covers nearly 40 percent of Lab retirees in group plans very much like those that existed prior to 2008.  Kaiser coverage is predicted to be shifted to the new system at year’s end in a move whose details have not yet been announced.
     The complaints of retirees have fallen into several categories that contrast sharply with their favorable memories of the University’s reliable, easy to understand programs.  One major complaint has been that poor service and communication have meant confusing administrative changes, unfamiliar plans, delays in reimbursement and even dropped coverage.  Another is that being moved out of group plans into individual ones appears to set retirees up for future cost increases and possible insurance cancelation as they age and develop the inevitable medical burdens of later life. 
     And finally, on a personal basis, many retirees express anger that a company they never worked for – Lawrence Livermore National Security – is now defining their health care options.  
     At the most senior level, UC President Mark Yudoff asked that the organizer of the retiree petitions communicate in future with the UC Office of General Counsel.  The organizer is Joe Requa, who formed the Livermore Retiree Group to deal with the health care issue and has seen an enthusiastic response from retirees.
     For her part, UC Vice President Lapp cited a booklet called Your Group Insurance Plans.  She said that the booklet makes it clear that “the benefits of all employees, retirees and plan beneficiaries are subject to change or termination at the time of contract renewal or at any other time by the University or other governing authorities." 
     While several retirees said they had no memory of such a warning, it exists and can be found in the fine print of UC publications, including “New Dimensions,” which is mailed periodically to retiree homes.
     For example, the New Dimensions of Winter 2001 reads, "The University intends to continue the benefits described here indefinitely; however, the benefits of all employees, annuitants and plan beneficiaries are subject to change or termination at the time of contract renewal or at any other time by the University or other governing authorities.  The University reserves the right to change the premiums and employer contributions at any time."
     At the time The Independent went to press, retiree organizations had not responded formally to the University’s communication.  Livermore Retiree Group leader Joe Requa said that his organization is preparing communications with UC Office of General Counsel as requested by President Yudoff.  He also said his group is willing to press forward with legal action if necessary.