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Bethlehem Steel: Press Room
  Bethlehem Steel: Press Room

Bethlehem Will Offer COBRA for Retiree Medical Coverage

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    For Immediate Release

    BETHLEHEM, Pa., March 24, 2003 - The U.S. Bankruptcy Court judge having jurisdiction of the bankruptcy cases of Bethlehem Steel Corporation today authorized Bethlehem to terminate the retiree medical and life insurance benefits for essentially all of its retirees and their eligible dependents effective March 31, 2003.

    This means Bethlehem will no longer pay any claims for retiree medical services incurred after March 31, 2003. In addition, Bethlehem will not make any retiree life insurance payment for any deaths occurring after March 31, 2003.

    While Bethlehem will terminate all retiree group health and life insurance plans on March 31, 2003, the corporation has arranged to make COBRA coverage available to all retiree groups from April 1, 2003 to not later than September 30, 2003. The judge, however, ruled that Bethlehem must, if sufficient funds are available, reimburse up to two weeks of COBRA premiums paid by Bethlehem's COBRA enrollees after all of Bethlehem's Chapter 11 allowed secured, administrative and priority claims have been paid.

    COBRA coverage for Bethlehem's retirees will be administered by Highmark Services Company, which will soon be mailing information to Bethlehem's COBRA-eligible individuals to explain enrollment procedures and costs. Enrollment in COBRA guarantees that there will be no lapse in medical coverage. Individuals selecting COBRA coverage may be eligible to receive a tax credit of 65 percent of the premiums paid through the Trade Adjustment Assistance Reform Act of 2002.

    The bankruptcy court is expected to issue an order implementing its ruling shortly.

    "Bethlehem recognizes the significant and important contributions our many retirees have made during Bethlehem's long history," said Robert S. Miller, Bethlehem's chairman and chief executive officer. "As we considered the best strategic alternative in resolving our bankruptcy, Bethlehem continued to pay for the health and life insurance programs for its retirees. Many companies cease paying for retiree health care immediately upon filing for bankruptcy protection. Since we entered into bankruptcy on October 15, 2001, we have paid more than $325 million for the health and life insurance needs of about 91,000 retirees and their eligible dependents. Unfortunately, we are no longer able to pay these bills and sincerely regret that circumstances have led us to this situation," he said.

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