Opinion of Trustees
Resolution of Dispute
Case No. 84-509
Page 1
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OPINION OF TRUSTEES
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In Re
Complainants: Employees
Respondent: Employer
ROD Case No: 84-509 – February 3, 1988
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 classified employees of the Respondent. 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. Information submitted by the
representative for the Complainants indicates that the Respondent intends to pay the balance due
on any medical claims after the assets of the employer trust fund and the insurance carrier are
distributed and any funds received by the Respondent are paid toward the Complainants’ claims
on a prorata basis. There is no information indicating when such a distribution will be made. The
representative for the Complainants contends that the Complainants should not be subjected to
this lengthy process and that the Respondent is responsible for payment of the Complainants’
covered medical expenses which 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 during the Complainants’ employment with
the Respondent.
Positions of the Parties
Opinion of Trustees
Resolution of Dispute
Case No. 84-509
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 and such payment should be
made without further delay.
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:
(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. (1) and (4) of the Employer Benefit Plan provide:
Article II – Eligibility
The persons eligible to receive the health benefits pursuant to Article III are as follows:
A. Active Employees
Opinion of Trustees
Resolution of Dispute
Case No. 84-509
Page 3
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; or
________
*
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.
(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 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.