Opinion of Trustees
Resolution of Dispute
Case No. 84-593
Page 1
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OPINION OF TRUSTEES
______________________________________________________________________________
In Re
Complainants: Employees
Respondent: Employer
ROD Case No: 84-593 – April 7, 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 were employed in classified positions by the Respondent until November
1987. 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 submitted copies of unpaid bills for medical services rendered
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.
The Respondent provided health benefits coverage for the Complainants through different
insurance carriers following the termination of the BIT.
Dispute
Whether the Respondent is responsible for payment of the Complainants’ medical bills that are
unpaid due to the insolvency of BIT and California Life Insurance.
Positions of the Parties
Opinion of Trustees
Resolution of Dispute
Case No. 84-593
Page 2
Position of the Complainants: The Complainants ask whether the Respondent is responsible for
payment of their outstanding medical bills that are unpaid due to the insolvency of BIT and
California Life Insurance.
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 nonpension 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 Bitumious 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
Benefits under Article III shall be provided to any Employee who:
Opinion of Trustees
Resolution of Dispute
Case No. 84-593
Page 3
(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
(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 the Complainants’ employment with the
Respondent under the terms of the Wage Agreement and the Employer Benefit Plan.
