Opinion of Trustees
Resolution of Dispute
Case No. 84-422
Page 1
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OPINION OF TRUSTEES
______________________________________________________________________________
In Re
Complainants: Laid-off Employee
Respondent: Employer
ROD Case No: 84-422 – July 25, 1989
Board of Trustees: Joseph P. Connors, Sr., Chairman; Paul R. Dean, Trustee; William Miller,
Trustee; Donald E. Pierce, Jr., Trustee; Thomas H. Saggau, Trustee.
Pursuant to Article IX of the United Mine Workers of America (“UMWA”) 1950 Benefit Plan
and Trust, and under the authority of an exemption granted by the United States Department of
Labor, the Trustees have reviewed the facts and circumstances of this dispute concerning the
provision of health benefits coverage for a laid-off Employee under the terms of the Employer
Benefit Plan.
Background Facts
The Complainant was employed in a classified position by the Respondent from August 18, 1986
until December 29, 1986, when the Complainant was laid off. Funds’ records indicate that the
Complainant worked over 500 hours for the Respondent during the 24-month period prior to the
Complainant’s date last worked. The Respondent provided health benefits coverage for the
Complainant through the Bituminous Industry Trust/Business Insurance Trust (“BIT”) and
California Life Insurance. The Complainant has submitted copies of unpaid bills for medical
services rendered between September 14, 1986 and February 19, 1987. A representative for
California Life Insurance states that the Complainant’s medical bills have been approved for
payment, but it is awaiting the settlement of the carrier’s bankruptcy. Information indicates that
both BIT and California Life Insurance ceased paying health benefits claims for services
rendered prior to April 30, 1987 due to the insolvency of BIT and California Life Insurance.
Dispute
Whether the Respondent or the UMWA 1974 Benefit Plan and Trust is required to pay the
Complainant’s medical bills that are unpaid due to the insolvency of BIT and California Life
Insurance.
Positions of the Parties
Position of the Complainant: The Complainant asks whether the Respondent or the UMWA 1974
Benefit Plan and Trust is required to pay his medical bills that are unpaid due to the insolvency
of BIT and California Life Insurance.
Opinion of Trustees
Resolution of Dispute
Case No. 84-422
Page 2
Position of the Respondent: The Respondent has not replied to repeated correspondence from
Funds’ staff requesting its position in this dispute.
Pertinent Provisions
Article XX Section (c)(3)(i) of the National Bituminous Coal Wage Agreement of 1984 provides
in pertinent part:
(3)(i) Each signatory Employer shall establish and maintain an
Employee benefit plan to provide, implemented through an
insurance carrier(s), health and other non-pension benefits for its
Employees covered by this Agreement as well as pensioners, under
the 1974 Pension Plan and Trust, whose last signatory classified
employment was with such Employer. The benefits provided by
the Employer to its eligible Participants pursuant to such plans
shall be guaranteed during the term of this Agreement by that
Employer at levels set forth in such plans.
Article I (1), (2) and (4) of the Employer Benefit Plan provide:
Article I – Definitions
The following terms shall have the meanings herein set forth:
(1) “Employer” means (Employer’s Name).
(2) “Wage Agreement” means the National Bituminous Coal Wage
Agreement of 1984, as amended from time to time and any successor
agreement.
(4) “Employee” shall mean a person working in a classified job for the
Employer, eligible to receive benefits hereunder.
Article II A. (4) of the Employer Benefit Plan provides:
Article II – Eligibility
A. Active Employees
(4) A new Employee will be eligible for health benefits from the first day
worked with the Employer.
Article III D. (1)(a) of the Employer Benefit Plan provides:
Opinion of Trustees
Resolution of Dispute
Case No. 84-422
Page 3
D. General Provisions
(1) Continuation of Coverage
(a) Layoff
If an Employee ceases work because of layoff, continuation of health, life
and accidental death and dismemberment insurance coverage is as
follows:
Number of Hours Worked for
the Employer in the 24
Consecutive Calendar Month
Period Immediately Prior to Period of Coverage
the Employee’s Date Continuation from the
Last Worked Date Last Worked
2,000 or more hours Balance of month plus
12 months
500 or more but less than Balance of month plus
2,000 hours 6 months
Less than 500 hours 30 days
Discussion
Article XX Section (c)(3)(i) of the 1984 Wage Agreement requires an Employer to provide an
Employer Benefit Plan,…implemented through an insurance carrier(s), [for] health and other
non-pension benefits….” It further requires that, “…benefits provided by the Employer to its
eligible Participants pursuant to such plans shall be guaranteed during the term of this
Agreement by that Employer at levels set forth in such plans.”
Article II. A. of the Employer Benefit Plan provides health benefits coverage to an active
employee working in a classified job for a signatory Employer. In addition, Article III. D. (1)(a)
provides continued benefits coverage for a laid-off Employee for a defined period based upon
the number of hours worked for the Employer during the 24-month period immediately prior to
the date last worked. Because the Complainant had worked for the Respondent for more than
500 hours in the 24-month period immediately prior to his layoff, the Respondent continued to
be responsible for the Complainant’s health benefits for the balance of the month in which the
Complainant last worked plus six months, or through June 30, 1987.
The Respondent implemented its Employer Benefit Plan through an employer trust fund and
insurance carrier. The employer trust fund and the carrier subsequently became insolvent.
Implementation of a plan through a carrier, in and of itself, does not relieve the Respondent of its
primary obligation to provide benefits pursuant to the Wage Agreement. Inasmuch as the
Opinion of Trustees
Resolution of Dispute
Case No. 84-422
Page 4
Complainant was eligible for health benefits coverage from the Respondent at the time the
medical charges in question were incurred, the Respondent is responsible for payment of those
charges under the terms of the Employer Benefit Plan.
The Complainant has asked in the alternative whether benefits might be provided by the 1974
Benefit Plan and Trust. Under that Plan, a beneficiary may be entitled to coverage if his last
signatory employer is “no longer in business.” However, a “no longer in business” determination
is made according to established procedures separate from the ROD process.
Opinion of the Trustees
The Respondent is responsible for payment of the covered medical charges incurred by the
Complainant and his eligible dependents during the Complainant’s employment wish the
Respondent and during his period of eligibility for continued benefits coverage consistent with
the terms of the Wage Agreement and the Employer Benefit Plan.
