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OPINION OF TRUSTEES
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In Re
Complainants: Employees
Respondent: Employer
ROD Case No: 84-647 – August 10, 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 clan.
Background Facts
The Complainants are Employees working in classified jobs for the Respondent. 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 Mountain
Trails Health Plan from March 1, 1987 through August 21, 1987. Information provided to the
Funds indicates that Mountain Trails Health Plan was declared insolvent, effective September
23, 1987. Due to insolvency, Mountain Trails Health Plan has ceased paying benefits claims for
services rendered prior to September 23, 1987. The representative for the Complainants
contends that during this period the Complainants incurred medical bills which have not been
paid.
The Respondent states that Mountain Trails Health Plan is presently reviewing the
Complainants’ claims as part of a liquidation process and that further action may be taken after
June 1, 1988. Information provided to the Funds indicates that June 1, 1988 is the final date for
filing claims against Mountain Trails Health Plan; however, it is unknown when Mountain Trails
Health Plan may settle claims, due to pending litigation.
The representative for the Complainants asks that the Respondent be held responsible for
payment of the Complainants’ medical bills that are unpaid due to the insolvency of Mountain
Trails Health Plan.
Dispute
Opinion of Trustees
Resolution of Dispute
Case No. 84-647
Page 2
Whether the Respondent is responsible for payment of the Complainants’ medical bills that are
unpaid due to the insolvency of Mountain Trails Health Plan.
Positions of the Parties
Position of the Complainants: The Complainants ask whether the Respondent is responsible for
payment of their medical bills that are unpaid due to the insolvency of Mountain Trails Health
Plan.
Position of the Respondent: The Respondent states that Mountain Trails Health Plan is in a
liquidation process and the Complainants’ claims are under review as part of that process.
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:
Opinion of Trustees
Resolution of Dispute
Case No. 84-647
Page 3
Article II – Eligibility
The persons eligible to receive health benefits pursuant to Article III are as follows:
A. Active Employees
(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 through Mountain Trails Health Plan, which
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.
