October 2012
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Kodak Will Try To End Retiree Health Benefits

It’s a sad chapter in a storied American company, but one-time photography giant Kodak has filed a motion in U.S. Bankruptcy court to end retiree health benefits for some 25,000 Kodak retirees living in the Rochester area. According to an agreement with Kodak’s, in return for agreeing to end the retiree health benefits, Kodak will give $7.5 million in cash and future claims on the company to subsidize some benefits.

Even though many Eastman Kodak retirees have known that their retiree benefits have been in jeopardy for quite some time, it’s still a bitter pill for many. The Eastman Kodak Retiree Association had this to say:

An EKRA statement said: “We should all expect and deserve full disclosure on why the situation is so bad that it requires full elimination of health and welfare benefits, what steps each retiree needs to take to make any transition, what resources are available to make individual interpretations when necessary, the specific dates when each particular benefit is due to terminate, (and) what, if any, alternatives are available for continuing a particular benefit.”

For 56,000 Kodak retirees and dependents worldwide relying on the company for health care benefits, it would mean a financial wallop. A 2010 study by the Washington-based Employee Benefit Research Institute found that retirees who don’t have employer subsidies would need upward of $200,000 in savings just to guarantee they could afford a Medicare subsidy, and upward of $100,000 to make sure they could cover drug expenses.

Kodak retirees also would join a growing number of retirees locally and nationally who no longer have an employer-provided health insurance. The Rochester Business Alliance’s 2011 health benefits survey of area employers found that only 14% of companies offered health benefits to all retirees, down from 17% the previous year.

And, according to the Kaiser Family Foundation’s annual nationwide survey, 25% of companies with 200 or more employees in 2012 offered retiree health coverage. That was down from 34% in 2006 and 46% in 1991.

Kodak seeks to end retiree health benefits

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