Peabody Energy is ending a health care benefit program for retired miners as a cost-saving measure.
The St. Louis-based coal giant announced plans last week to discontinue coverage of medical expenses for workers enrolled in Medicare and to stop providing life insurance to retirees, The Casper Star-Tribune reported.
The change is expected to go into effect Jan. 1.
Peabody conducted a financial review earlier this year that determined covering the cost of existing retiree medical benefits was “not sustainable.”
Discontinuing the retiree health care program is expected to save Peabody $174.5 million.
In Wyoming, the coal operator owns the North Antelope Rochelle, Rawhide and Caballo mines in the Powder River Basin.
Peabody declined to disclose how many workers would be affected by the policy change.
Non-represented employees, retirees and workers in other states in which the company operates will be affected.
“We regret not being able to maintain our existing retiree health care program; however, we are continuing to offer some financial support for pre-65 retirees,” Peabody Vice President of Communications Julie Gates said in a statement.
“The change in financial support is designed to maintain Peabody’s retiree medical subsidy where it is needed most — for retirees and spouses who are not yet age 65 and Medicare-eligible,” Gates said.
The decision is among the initiatives Peabody undertook this year to improve operating performance and ensure a structure that responds to market conditions, Gates said.
The company reported a 39% revenue decline between July and September partly because of lower production volumes and weaker exported coal prices.