Opinion of Trustees
Resolution of Dispute
Case No. 84-431
Page 1
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OPINION OF TRUSTEES
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In Re
Complainants: Laid-off Employees and Pensioners
Respondent: Employer
ROD Case No: 84-431 – July 17, 1987
Board of Trustees: Joseph P. Connors, Sr., Chairman; Paul R. Dean, Trustee; William B. Jordan,
Trustee; William Miller, Trustee; Donald E. Pierce, Jr., 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 under the terms of the Employer Benefit Plan.
Background Facts
The Complainants are laid-off Employees of the Respondent and Pensioners whose last
classified signatory employment in the coal industry was for the Respondent. The laid-off
Complainants worked for the Respondent until December 1986, when the Respondent ceased
operations. The Respondent is signatory to the National Bituminous Coal Wage Agreement
(“Wage Agreement”) of 1984.
The Respondent provided health benefits,coverage for the Complainants through the Bituminous
Industry Trust/Business Insurance Trust (“BIT”) and California Life Insurance until April 30,
1987, when the BIT was terminated. Due to insolvency, the BIT and California Life Insurance
have ceased paying health benefits claims for services rendered prior to April 30, 1987. The
representative for the Complainants has stated that the Respondent has not provided health
benefits for the Complainants after April 30, 1987.
The representative for the Complainants asks whether the Respondent is responsible for payment
of the Complainant’s medical bills that are unpaid due to the insolvency of BIT and California
Life Insurance. The representative for the Complainants also asks whether the Respondent is
responsible for providing the Complainants’ health benefits coverage after April 30, 1987.
Dispute
Whether the Respondent is responsible for the provision of health benefits for the Complainants
under the terms of the Employer Benefit Plan.
Opinion of Trustees
Resolution of Dispute
Case No. 84-431
Page 2
Positions of the Parties
Position of the Complainants: The Respondent is responsible for payment of the covered medical
charges incurred by the Complainants prior to April 30, 1987, and for the provision of health
benefits coverage for the Complainants beyond that date during their individual periods of
eligibility as determined under the terms of Employer Benefit Plan.
Position of the Respondent: The Respondent has not responded to repeated correspondence from
the Funds regarding 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:
(c) 1974 Plans and Trusts
(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 1 (1), (2), (4) and (5) 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.
(5) “Pensioner” shall mean any person who is receiving a pension, other than
(i) a deferred vested pension based on less than 20 years of credited
service, or (ii) a pension based in whole or in part on years of service
Opinion of Trustees
Resolution of Dispute
Case No. 84-431
Page 3
credited under the terms of Article II G of the 1974 Pension Plan, or any
corresponding paragraph of any successor thereto, under the 1974 Pension
Plan (or any successor thereto), whose last classified signatory
employment was with the Employer, subject to the provisions of Article II
B of this Plan.
Article II A. (1) and (4) of the Employer Benefit Plan provide:
Article II – Eligibility
The persons eligible to receive health benefits pursuant to Article III are as follows:
A. Active Employees
Benefits under Article III shall be provided to any Employee who:
(1) is actively at work* for the Employer on the effective date of the
Wage Agreement; on
(4) A new Employee will be eligible for health benefits from the first
day worked with the Employer.
Article II B. (1) of the Employer Benefit Plan provides:
B. Pensioners
Health benefits and life insurance under Article III hereof shall be provided to
Pensioners as follows:
(1) Any Pensioner who is not again employed in classified signatory
employment subsequent to
(a) such Pensioner’s initial date of retirement under the 1974
Pension Plan, and
(b) October 1, 1984, shall be eligible for coverage as a
Pensioner under, and subject to all other Provisions of this
Plan. Notwithstanding (i) and (ii) of the definition of
Pensioner in Article I(5) of this Plan, any such Pensioner
who was eligible for benefits under the 1974 Benefit Plan
as a Pensioner on December 5, 1977, shall be eligible for
such benefits, subject to all other provisions of this Plan.
Opinion of Trustees
Resolution of Dispute
Case No. 84-431
Page 4
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*
Actively at work includes an Employee of the Employer who was actively at work on
September 30, 1984, and who returns to active work with the Employer two weeks after the
effective date of the Wage Agreement.
Article III D. (1)(a) of the Employer Benefit Plan provides:
Article III – Benefits
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.” Although the Respondent in the instant case had
implemented its Employer Benefit Plan until April 30, 1987 through an employer trust fund and
insurance carrier which subsequently became insolvent, such event does not relieve the
Respondent of its primary obligation to provide benefits pursuant to the Wage Agreement.
Inasmuch as the Complainants were eligible for health benefits coverage from the Respondent at
the time their outstanding medical charges were incurred, the Respondent is responsible for
Opinion of Trustees
Resolution of Dispute
Case No. 84-431
Page 5
payment of those charges under the terms of the Employer Benefit Plan. Furthermore, inasmuch
as the Complainants were eligible for health benefits coverage beyond April 30, 1987 as laid-off
Employees and Pensioners, the Respondent is responsible for the provision of their health
benefits coverage throughout their individual periods of eligibility as determined under the terms
of the Employer Benefit Plan.
Opinion of the Trustees
The Respondent is responsible for payment of the covered medical charges incurred by the
Complainants prior to April 30, 1987, and for the provision of health benefits coverage for the
Complainants throughout their individual periods of eligibility as determined under the terms of
the Employer Benefit Plan.