NewPage Corp. Retirees Sue over Health Benefit Reductions

December 29, 2009 ( – Retirees of paper producer NewPage Corp. are suing the company over its plans to phase out subsidies for their health care premiums.

The Dayton Daily News reports that the lawsuit claims Miamisburg, Ohio-based NewPage’s decision breaches collective bargaining agreements for workers at its Wisconsin paper mills, and violates the Employee Retirement Income Security Act (ERISA). It alleges collective bargaining agreements reached between NewPage — or its predecessors — and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union (AFL-CIO/CLC) or its predecessors give the company no right to unilaterally shift health-care costs to employees once they have retired.

NewPage confirmed that it notified retirees in November that employees over 65 years old who retired after 1985 would gradually see their premium subsidies reduced, according to the news report. In 2010, retirees will receive 66% of the premium subsidy they received this year. That will drop to 33% in 2011 and will disappear in 2012.

“NewPage is not terminating retiree health-care benefits,” spokeswoman Shannon Semmerling said in a prepared statement, according to the Daily News. “We will continue to provide access to retiree health-care plans and continue to seek low-cost options in order to keep plans affordable.”

Semmerling also said the action is necessary to keep the company financially viable and benefits available and affordable amid “unprecedented market conditions.”

The lawsuit seeks class action certification, an injunction to keep NewPage from terminating or modifying retiree health benefits, and reimbursement of attorney fees and other costs.

As employers continue to shift health costs to retirees (see Employers Continue to Shift Health Costs to Retirees), other lawsuits have sprung up, most recently against the city of Cincinnati (see Cincinnati Retirees Go to Court Over Retiree Health Care).