Beth retirees due drug benefits

United Steelworkers to offer coverage by Feb. to 48,000, plus dependents

37,000 at other companies in plan

December 08, 2004|By Bill Atkinson | Bill Atkinson,SUN STAFF

The United Steelworkers union said yesterday that it will offer as early as February a prescription drug benefits plan to Bethlehem Steel Corp. retirees who lost their health-care benefits 20 months ago.

The drug benefits plan will target about 48,000 retired hourly workers and their dependents at Bethlehem Steel, and 37,000 others at other bankrupt steelmakers whose assets were acquired by International Steel Group Inc. of Cleveland.

"Any hourly retiree who lost their health care coverage in the Bethlehem bankruptcy is eligible for this benefit," said John Duray, a spokesman for the union, which represents 1.2 million working and retired steel workers in the United States and Canada. "This isn't something we are setting up with the likelihood that it will get discontinued in six months. The goal is to keep it there."

Duray said in Pittsburgh that the aim is to have the drug benefits plan operational "as quickly as we can get the thing up and running," which could be soon as February.

The prescription benefit will be paid out of a retiree health care trust fund set up by a 2003 labor pact between ISG and the union, Duray said. The fund is expected to have $185 million at year's end.

"There is clearly enough funding to give some level of benefit to everybody," he said.

Such funding agreements are common among steel companies and labor unions, said Charles Glazer, an ISG spokesman.

He said the company has nothing to do with the union's management of the trust fund.

"What they do with it and how they pay it out is for them to comment on," Glazer said.

About 20,000 Bethlehem Steel retirees in the Baltimore area, most of them veterans of the Sparrows Point mill in Baltimore County, lost their health care coverage March 31 last year when a U.S. bankruptcy judge in Manhattan approved Bethlehem's plan to terminate health care and life insurance benefits for retirees and their dependents.

Bethlehem's assets were subsequently sold to ISG, which also acquired the assets of LTV Corp., Georgetown Steel Co. and Acme Steel Co. and - minus those companies' billions of dollars in pension and benefit obligations - quickly became a profitable steelmaker.

In October, ISG agreed to sell out to Netherlands-based Mittal Steel Co. for about $4.5 billion, creating the world's largest steelmaker.

Company officials said they didn't expect job cuts at the Sparrows Point mill, which has about 2,500 employees.

Difficult time

"It has been pure hell for retirees," said John Cirri, president of the Steelworkers Local 9477 in Baltimore. "A lot of them have lost their pensions; a lot of them have been drastically reduced. People have been surviving the best they can by penny-pinching."

Under the new plan, retirees would have a co-payment of $5 for generic drugs, $15 for name-brand drugs and $30 for nondiscounted brand drugs, Duray said.

Participants would pay a monthly premium of $25, he said.

Broad coverage wanted

"The goal is to make it as broad a coverage as we can possibly can make it," Duray said.

Bethlehem Steel retiree Stanley Morris, who worked at the company for more than 43 years, said he was pleased to learn about the new drug benefit plan but didn't know the details.

"We are doing what we can to survive," Morris said.

Bruce E. Davis, general counsel for the Retired Employees' Benefits Coalition, which represents salaried employees, said the 28,000 former salaried employees - about 10,000 of them in the Baltimore area - are not eligible to participate in the union program.

Salaried employees

About $8.4 million, $300 per salaried employee, has been set aside for them as part of the bankruptcy court's liquidation plan, he said, and the money is expected to be sent out early next year.

Davis said an additional payment could be made in 2006 or 2007.

"The court took notice that there was nothing in that trust fund arrangement for salaried employees," Davis said. "It will be a piece of good news before the holidays."

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