Major Wyoming Coal Producer Cuts Back Health Care Benefit Plans
Peabody Energy Corp., which operates three coal mines in northeastern Wyoming, will stop providing benefits to certain employees beginning Jan. 1, according to a recent filing with the Securities and Exchange Commission.
"The Company will no longer subsidize medical costs for Medicare eligible individuals or provide life insurance to retirees," according to a statement in its September quarterly -- Form 10-Q -- report to the SEC.
"The Company will provide non-Medicare eligible retirees and eligible dependents a health reimbursement arrangement."
The decision will save the company $174.5 million, according to the Form 10-Q.
"The reduction was attributable to the elimination of health care benefits upon covered individuals’ attainment of Medicare eligibility. The reduction in liability was recorded with an offsetting balance in 'Accumulated other comprehensive income,' which is being amortized to earnings over an average remaining service period to full eligibility for participating employees of 5.1 years."
A company representative did not immediately return a call seeking comment about the effects of these decisions on employees of Peabody in Wyoming.
Peabody Energy Corp.-- DJIA: BTU -- is the world's largest coal company and operates the Caballo, North Antelope Rochelle and Rawhide mines in the Powder River Basin.
Earlier this year, Peabody was among several coal companies that laid off employees with the drop in electricity demand due to COVID-19.
In 2016, the company filed for Chapter 11 Bankruptcy Protection and emerged from bankruptcy a year later.
Earlier this month, the Financial Times reported that Peabody may need to file for bankruptcy protection again as the company struggles with the decline in demand for coal, the economic fallout from the coronavirus pandemic, and debt obligations.
This story will be updated.
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