Audit letter threatens lab retirees with loss of health insurance

By ROGER SNODGRASS, Los Alamos Monitor Editor

One-tenth of Los Alamos National Laboratory retirees recently received letters concerning a “Dependent Eligibility Audit” related to their medical insurance.

At least one recipient thought the cancellation of benefits threatened in the letter was a bit much, especially when compared to the nonchalant way it was delivered.

The envelope, dug out of a recycle pile, “is a generic-looking thing from a P.O. Box in Orlando Florida. Sort of like a Publisher’s Clearinghouse offer or something,” wrote lab retiree Abe Jacobson from Washington state in an e-mail to the Monitor.

The envelope with return address marked as “Customer Care Center” has a headline, “Your Benefits Resources” and a relatively unassuming subhead indicating, “Important Information About Your Health and Insurance Benefits.”

It was sent by first-class mail.

Although the threatened consequences of loss of medical coverage for 12 months, might be considered vital, the letter was not registered and no return-receipt was requested upon delivery.

The sender is not clear on the outside, but is specified in the letter itself as the lab’s management company, Los Alamos National Security, LLC. There is also a bold first line: “Time Sensitive: Your Action Required.”

Laboratory spokesperson Steve Sandoval confirmed Wednesday that the letter is the second round of a two-part audit. The first round went to laboratory employees. In both mailings, 10 percent of the enrollees in each category were chosen to receive letters.

The letter informs the recipient that he or she has been randomly selected for a medical insurance audit and that a response is required before July 31. If the response does not arrive in time, the letter states, “you and your listed dependent(s) will be dropped from coverage … for 12 months.”

In a telephone conversation and several e-mails to the Monitor, Jacobson insisted that the matter had been handled in a “preremptory and careless manner.”

“That is,” he wrote, “for people lucky enough to be in this random sample … their failure to open, read and respond to this letter means they will be dropped from coverage on Aug. 1.”

Jacobson said he typically tries to be away from home for up to three months during the summer, “and it was only good fortune that I got this letter before my departure.”

Had he left a bit earlier, he noted, he would have returned to find that he and his wife were without medical insurance and extremely vulnerable.

Sandoval relayed questions from Jacobsen and the Monitor to human resources officials at the laboratory. One of the questions was about follow-up policy in case there is not a reply.

The officials answered that, with the audit of active employees and a previous audit of retirees under the University of California, they sent several reminders.

“We went above and beyond to contact these people, which resulted in 100-percent compliance and no one lost their medical coverage except for those dependents who truly were ineligible,” officials said.

They also responded to the question about the relatively minimal attempt to command the attention of the recipient compared to the specified consequences, saying the first audit of active employees was sent “certified.”

But letters were not sent certified to the retirees because they had been informed by callers that the postal service “sporadically delivers to outlying areas,” and the certified letters did not need to be signed by the addressee, only family members.

“Certifying the letters added an expense that we realized was not necessary because the follow-up reminder letters, which were not certified, resulted in an enormous response,” the human resource officials replied.

They added, “Our intention is NOT to de-enroll them. It is simply to ensure the plan is being used appropriately.”

The response still did not satisfy Jacobson, who suggested in an e-mail early this morning that the letter should then have said, “The cancellation will occur on Aug. 1 and will be repealed as soon as the required documentation is provided to LANL.”

Without such working, he added, “it’s like saying, if you do not bother to prove your innocence of shoplifting by sending us the purchase receipt for the plasma TV in your living room, we’ll send you to jail for a year, and if the receipt is produced after you enter jail then you’ll still spend a year in jail.”