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Livermore National Lab axes its retirees, blames federal Affordable Care Act

Rather than bring retiree medical benefits into compliance with the requirements of the Affordable Care Act (ACA), the management of Lawrence Livermore National Lab chose the more draconian – and crueler – option of simply eliminating the entire job classification that would have benefited from it.

The “lab associates” title covers returning lab retirees, many with decades of expertise, who work less than 1000 hours per year and are paid by the hour. Although they are employees, they neither get regular employee health benefits nor earn sick or vacation leave.

The lab was UC-run for decades, but in 2007 it was removed from University of California management and is managed by a private LLC called Lawrence Livermore National Security, LLC, or LLNS (of which the University of California is a majority partner).

LLNS could have brought retiree
health care into compliance with
the ACA instead of terminating
all the lab associates

Management determined that the health care benefits under the retirees’ plan did not meet the requirements of the ACA. While LLNS could have enhanced the retiree health care plan to bring it into compliance with the ACA, it decided instead to terminate all the lab associates.

In all, some 200 lab associates received letters terminating their employment with the lab. While some will continue in their current assignments, they will do so as employees of Akima – a company that subcontracts with LLNS – rather than as lab employees. The cost will be at approximately double to the programs at the lab that benefit from the experience and expertise that lab associates bring.

Union proposal to fix situation

The Society of Professionals, Scientists and Engineers (SPSE), Chapter 12 of UPTE-CWA, advocates for all lab employees and retirees including lab associates.

SPSE-UPTE’s fix would continue medical benefits and bring any deficiencies up to the standards of the ACA. This would retain the skills and experience of the lab associates, rather than of only a handful of survivors shunted into the employ of a subcontractor – and would, moreover, be the decent and compassionate solution.

Gathering with signs and banners at the lab’s West Gate Drive, members of UPTE’s skilled trades unit at Livermore National Lab held an action in mid-July to call attention to issues in contract bargaining. They’ve been working without a contract since January 1, 2014. (Eileen Montano, photo)

Lab privatization problematic

The loss of the lab associates is the latest in a steady erosion of pay and retirement benefits since the privatization of the lab in 2007, which has hit both active employees and retirees hard. The erosion began with the elimination of the defined benefit plan (pension) for new employees hired after the transition from UC management to LLNS.

Continuing employees who opted to roll their UC pension funds into the new company’s pension plan were then hit with a big increase in employee contributions that were not offset by pay increases.

Then, lab retirees were thrown off the old retiree medical plans and instead given a fixed sum (either $2400 per year for a single retiree or $4800 per year for a retiree with a dependent spouse) with which to purchase supplemental health insurance on the open market.

For many retirees, if not most, this change meant a drastic increase in out-of-pocket costs for health insurance.

The latest blow in pay and benefits is part of a national trend toward increased income inequality. Consequently, many SPSE-UPTE members now face financial hardships, and a few face financial disasters, such as eviction or foreclosure and consequent loss of their homes.


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