Murray Energy Corp. confirmed Wednesday it will terminate medical coverage of nearly 1,200 Consol Energy retirees who worked in coal mines that Murray purchased 16 months ago.
It said benefits for those salaried retirees – medical, prescription drug and life insurance – will be halted Dec. 31. The cutoff will not apply to union members, and will affect 161 households in Pennsylvania.
Gary Broadbent, media director and assistant general counsel, said in a prepared statement that “in keeping with Murray Energy’s historic practice, it will not be able to provide retiree medical coverage to salaried retirees of Murray American Energy Inc., formerly Consolidation Coal Co.”
Murray, headquartered in St. Clairsville, Ohio, announced in late October that it was paying Consol $3.5 billion for five longwall mines in West Virginia: McElroy, Shoemaker, Robinson Run, Loveridge and Blacksville No. 2. The deal included the transfer of 3,722 hourly and salaried employees.
The sale was completed Dec. 5, almost exactly a year before the medical coverage will be terminated. Kate O’Donovan, manager of corporate communications for Southpointe-based Consol, said that “as part of the transaction … we insisted that Murray Energy continue to provide retiree health insurance to our former salaried employees for at least one year.
“Consol Energy’s hope and expectation was that Murray Energy would honor these obligations beyond the one-year period … While we respect the fact that Murray Energy is a different company with different priorities, this is an unfortunate and disappointing decision.”
Murray is one of the largest employers in the U.S. coal industry, providing more than 7,200 jobs and operating 13 active coal mines in six states.
Broadbent said in the statement that “Murray Energy’s inability to provide these benefits is, in part, due to the destruction of the coal industry, including our markets, by the Obama administration and its appointees and supporters, who have eliminated the livelihoods of thousands of coal miners, and their families, by the forced closing of 392 coal-fired electric power plants in America, now and in the immediate future.
“Due to these actions and devastated coal markets, Murray Energy is unable to support these benefits.”
He said Murray made the announcement now to give affected retirees time to “make other arrangements” and that that more than 80 percent “of the lost benefits can be made up with Medicare.”