Eastman Kodak has filed for Chapter 11 bankruptcy. When that happens to a company, it tends to generate a lot of anxiety for employees, both current and retired. What will happen to their health benefits? I cannot be certain exactly how that will work out, but, there are some general things that tend to happen in these type of situations.
Kodak is one of the most recognized names of film, cameras, and photography equipment. George Eastman started the company in 1888. The company started with the slogan “You press the button – we do the rest!”. Since then, the company has grown to have worldwide distribution of its products. There are a lot of photographers who were saddened by the news that Kodak has filed for Chapter 11 bankruptcy.
People who currently work for Kodak, as well as those who have retired from the company, are probably wondering what will happen to their health insurance now that Kodak has filed for bankruptcy. Kodak used to have one of the best employee benefits programs in the United States.
In 2008, Kodak announced that it was going to cease offering dental insurance coverage to its retired employees. At the same time, Kodak announced that it was going to start phasing out health insurance coverage for retired employees. This would gradually disappear over a ten year period.
In other words, Kodak was already planning to end their retired employee’s health insurance benefits by 2018. Sadly, this is becoming the normal thing for big businesses to do. Now that Kodak has officially filed for bankruptcy, there is the potential that whatever still remains of the retired employee health benefits plan could be prematurely ended.
Kodak has set up some free informational meetings for their employees, and retired employees, to attend. Some of the information given there will be about health insurance plans that are available for retirees who are eligible for Medicare.
Typically, when a company has filed for bankruptcy, it begins taking steps to cut costs. This could, potentially result in a cutdown in the number of workers who are currently employed by Kodak. Another cost cutting measure is for a company to reduce, or discontinue, employee health insurance plans.
There is good reason for employees of Kodak to be extremely nervous right now. On the other hand, there is the possibility that the bankruptcy will give Kodak the opportunity to restructure itself, and make changes that could help it to build up once again. Even so, it could be years before Kodak is able to offer health insurance plans to its employees again.
Image by Naval History & Heritage Command on Flickr