Thousands of Eastman Kodak retirees may soon lose their health care coverage.
As part of its restructuring efforts, Kodak has filed a motion with the U.S. Bankruptcy Court requesting permission to discontinue benefits under its medical plan for certain retirees.
A hearing to consider the motion will be held next week in U.S. Bankruptcy Court. If the court approves the motion, health care coverage for many retirees will end effective May 1.
Kodak filed for Chapter 11 bankruptcy protection earlier this year and said at the time that it would review its legacy cost structure, including retiree benefits, to determine ways to reduce expenses.
“Among the legacy costs that must be addressed as part of our reorganization are retiree health care costs that are not borne by many of the companies we compete against in the marketplace,” Patrick M. Sheller, Kodak’s senior vice president and general counsel, wrote in a letter to retirees. “As we have changed these benefits over time, we have always tried to balance the needs of our retirees with the needs of the company. It is now clearer than ever that in order to remain a participant in the market tomorrow, we must put Kodak on a sustainable financial path today.”
According to the motion filed by the company, Kodak wants to discontinue health care benefits for the following individuals who have reached age 65 (regardless of Medicare eligibility) or those who are under 65 and are eligible for Medicare if they are:
•Former employees who retired on or after Oct. 1, 1991.
•Former employees who became eligible for long-term disability benefits on or after Oct. 1, 1991.
•Current employees who are retirement eligible when they leave the company.
•Survivors and dependents of these individuals.
The plan would impact about 16,000 retirees.
“We understand that this change will be difficult. However, individuals affected by this change who have Medicare coverage will continue to be covered by Medicare, and will typically have access to a variety of other insurance options available in their community to supplement their Medicare coverage,” Sheller said.
The Eastman Kodak Retirees Association (EKRA) has filed an objection to the plan and has requested that a committee be formed to represent the interests of Kodak retirees.
The court is expected to hear both sides of the issue on March 20 in U.S. Bankruptcy Court for the Southern District of New York.
Many Kodak retirees live in the Tri-Cities region. Eastman Chemical Co. was part of Kodak before it spun off Jan. 1, 1994, as a standalone company headquartered in Kingsport.