Opinion of Trustees
Resolution of Dispute
Case No. 84-655
Page 1
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OPINION OF TRUSTEES
______________________________________________________________________________
In Re
Complainant: Employee
Respondent: Employer
ROD Case No: 84-655 – July 21, 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 Complainant has been employed in a classified position with the Respondent since April
1986. In June 1986, the Respondent corporation was purchased by the current owner. The
Respondent is signatory to the National Bituminous Coal Wage Agreement (“Wage Agreement”)
of 1984.
The Respondent, under its previous owner, had provided health benefits coverage for the
Complainant 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 Complainant has submitted a copy of an unpaid hospital
bill for medical services rendered in May 1986. The Complainant would like tv know who is
responsible for the unpaid hospital bill.
Dispute
Whether the Respondent is responsible for payment of the outstanding medical charges incurred
by the Complainant in May 1986.
Positions of the Parties
Position of the Complainant: The Complainant asks who is responsible for payment of the
unpaid hospital bill which was incurred in May 1986 during his employment with the
Respondent.
Opinion of Trustees
Resolution of Dispute
Case No. 84-655
Page 2
Position of the Respondent: The Respondent has not responded to repeated correspondence from
Funds’ staff requesting 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 provides:
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. 84-655
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.” Although the Respondent corporation was purchased
by a new owner in June 1986, a change in ownership does not affect the corporate existence nor
the corporation’s debts, obligations or liabilities. Therefore, the Respondent corporation remains
liable for the health benefits coverage required by the Wage Agreement.
Article II. A of the Employer Benefit Plan provides health benefits coverage for an active
Employee working in a classified job 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
corporation of its primary obligation to provide benefits pursuant to the Wage Agreement.
Inasmuch as the Complainant was eligible for health benefits coverage from the Respondent as
an active Employee at the time his 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
Complainant and his eligible dependents during his employment with the Respondent under the
terms of the Wage Agreement and the Employer Benefit Plan.
