Opinion of Trustees
Resolution of Dispute
Case No. 84-490
Page 1
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OPINION OF TRUSTEES
______________________________________________________________________________
In Re
Complainants: Employees
Respondent: Employer
ROD Case No: 84-490 – December 10, 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 were employed in classified jobs with the Respondent, Curley Ray Coal
Company, from May 1985 until about May 30, 1987, when the mine was closed. The
Complainants were then transferred to another company owned by the same individuals. 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
Complainants have stated that the Respondent did not provide health benefits coverage for them
after April 30, 1987.
The Complainants have submitted copies of unpaid medical bills incurred prior to April 30,
1987, during their employment with the Respondent. The Complainants ask whether the
Respondent is responsible for payment of their medical bills that are unpaid due to the
insolvency of BIT and California Life Insurance.
Dispute
Whether the Respondent is responsible for payment of the outstanding medical charges incurred
by the Complainants and their eligible dependents under the terms of the Employer Benefit Plan.
Positions of the Parties
Opinion of Trustees
Resolution of Dispute
Case No. 84-490
Page 2
Position of the Complainants: The Respondent is responsible for payment of the covered medical
charges incurred by the Complainants and their eligible dependents.
Position of the Respondent: The Respondent has not responded to repeated correspondence from
Funds staff 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 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 provide:
Article II – Eligibility
The persons eligible to receive health benefits pursuant to Article III are as follows:
A. Active Employees
Opinion of Trustees
Resolution of Dispute
Case No. 84-490
Page 3
(4) A new Employee will be eligible for health benefits from the first day
worked with the Employer.
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 active employees
working in classified jobs for a signatory Employer. The Respondent in the instant case
implemented its Employer Benefit Plan until April 30, 1987 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
Complainants were eligible for health benefits coverage from the Respondent as active
Employees at the time their outstanding medical charges were incurred, the Respondent is
responsible for payment of those charges under the terms of the Employer Benefit Plan.
Opinion of the Trustees
The Respondent, Curley Ray Coal Company, is responsible for payment of the covered medical
charges incurred by the Complainants and their eligible dependents during their employment
with the Respondent under the terms of the Employer Benefit Plan.
