Eaton's Employees' Benefits Largely Restored

Former employees of Eaton Corp. will soon receive some previously unpaid medical benefits and life insurance coverage as a result of court settlements reached earlier this month.

The employees' benefits had been terminated during the summer when Eaton's was going through financial problems that led to the retailer's insolvency, according to Koskie Minsky, the court-appointed representative for Eaton's employees.

Court proceedings were brought against Imperial Life Insurance when the company terminated life insurance coverage and employee health benefits without notice to the employees.

Imperial Life said the benefits had been terminated because it did not receive premium payments from Eatons.

However, Justice Farley of the Ontario Superior Court of Justice, found in favor of Eatons. In court orders issued Dec. 9., the justice ruled that health care claims incurred by Eaton employees after August 20, (the date Eaton's filed for court bankruptcy protection) must be processed by Imperial Life and paid in accordance with the Eaton's employee benefits plan. Richter & Associates, the court-appointed monitor of Eaton's, will make the payments to employees. The justice said Eaton's has no obligation to pay any claims incurred after the implementation date for Eaton's restructuring plan, which is scheduled for Dec. 29.

Employee health claims incurred prior to August 20, 1999 will be adjudicated by Imperial Life, and Eaton employees' court appointed representative will file a claim for their total value.

In addition, Eaton employees who had life insurance coverage through the retailer are entitled to benefits if they died while employed with Eatons or within 31 days of terminating employment. Employees have the right to convert to an individual life policy with Imperial Life until Jan. 21, 2000, if they meet conversion eligibility requirements and pay conversion fees and the first month's premium. The justice also ruled that these employees can continue life insurance coverage without having to pass a medical examination.