Nov 11, 2015 2 min read

CHARLESTON, W.Va. — Coal operator Alpha Natural Resources is seeking to eliminate health and other non-pension benefits for more than 4,500 non-union retirees and their eligible spouses and dependents.

The benefits are a financial burden that cost the company about $2.7 million in 2014 and represent a liability of about $125 million on its balance sheet, Bristol, Va.-based Alpha said in a recent filing in U.S. Bankruptcy Court in Richmond, Va.

Alpha filed for Chapter 11 bankruptcy Aug. 3. The company has coal operations in Pennsylvania, West Virginia, Virginia, Kentucky and Wyoming.

Alpha said the benefits include life insurance and subsidies to reimburse retirees for buying medical coverage through health care exchanges. Those receiving benefits include retirees and eligible spouses and dependents, spouses of deceased retirees, and employees who retired because of a disability.

The company does not set aside non-pension retiree benefits in a trust or pre-fund them. With the exception of life insurance, the company pays the costs out of its general revenue as obligations occur, Alpha said.

If approved, the elimination of benefits would be effective Dec. 31. Alpha said it selected that date so benefits recipients could choose new medical coverage while the election period is still open.

Alpha said it believes it has the authority under applicable contract and bankruptcy law to terminate or amend the benefits in the ordinary course of its business. It said it is seeking the bankruptcy court’s approval “out of an abundance of caution, in the event that the proposed termination of Non-Pension Retiree Benefits is found to be outside the ordinary course of the Debtors’ business.”

In that event, Alpha said terminating the benefits is a reasonable exercise of its business judgment.

A hearing on the company’s motion is set for Tuesday in Richmond.

Alpha plans to close Emerald Mine, near Waynesburg, by the end of this month. The company continues to operate Cumberland Mine in Greene County.