Opinion of Trustees
Resolution of Dispute
Case No. 84-677
Page 1
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OPINION OF TRUSTEES
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In Re
Complainant: Employee
Respondent: Employer
ROD Case No: 84-677 – October 12, 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 for an Employee under the terms of the Employer Benefit
Plan.
Background Facts
The Complainant was actively employed in a classified position by the Respondent from August
1986 until October 1, 1987. The Respondent is signatory to the National Bituminous Coal Wage
Agreement (“Wage Agreement”) of 1984.
The Respondent provided health benefits coverage for the Complainant through Mountain Trials
Health Plan from August 1, 1987 through August 31, 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 Complainant has submitted copies of unpaid bills for
medical services rendered during August 1987, and he contends that the Respondent is
responsible for payment of those bills.
The Respondent provided health benefits coverage for the Complainant through a different
insurance carrier beginning September 1, 1987.
Dispute
Whether the Respondent is responsible for payment of the Complainant’s medical bills that are
unpaid due to the insolvency of Mountain Trails Health Plan.
Opinion of Trustees
Resolution of Dispute
Case No. 84-677
Page 2
Positions of the Parties
Position of the Complainant: The Complainant asks whether the Respondent is responsible for
payment of his outstanding medical bills that are unpaid due to the insolvency of the insurance
carrier.
Position of the Respondent: The Respondent has not replied 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:
(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:
Opinion of Trustees
Resolution of Dispute
Case No. 84-677
Page 3
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 an active
employee working in a classified job for a signatory Employer. The Respondent in the instant
case implemented its Employer Benefit Plan through an insurance carrier 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 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 the Complainant’s employment with the
Respondent under the terms of the Wage Agreement and the Employer Benefit Plan.
