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OPINION OF TRUSTEES
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In Re
Complainants: Employees
Respondent: Employer
ROD Case No: 88-169 – February 28, 1990
Board of Trustees: Joseph P. Connors, Sr., Chairman; Paul R. Dean, Trustee; William Miller, Trustee; Donald E. Pierce, Jr., Trustee; Thomas H. Saggau, 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 Employees under the terms of the Employer Benefit Plan.
Background Facts
The Complainants are employed in classified positions by the Respondent, a signatory employer. The representative for the Complainants states that beginning June 12, 1989 there was a work stoppage at the Respondent’s operations.
The Complainants observed their regularly scheduled vacation period from June 24, 1989 through July 8, 1989. The Respondent notified the Complainants by memorandum dated June 23, 1989 that unless they returned to work on or before July 10, 1989, their health benefits coverage would be terminated as of the first day of the work stoppage. The Complainants were also notified that they could choose to continue such coverage at their own expense for a period of up to 18 months. The Complainants did not return to work on July 10, 1989, and their employer-provided health benefits coverage was terminated effective June 12, 1989. Some of the Complainants elected to continue their coverage by paying the appropriate premium to the Respondent. Employer-provided coverage was reinstated when the Complainants returned to work on July 20, 1989.
The Complainants contend that the Respondent should pay the medical expenses incurred by them and their dependents during the period from June 12, 1989 through July 19, 1989 in accordance with the terms of Article XX of the National Bituminous Coal Wage Agreement (“Wage Agreement”) of 1988 and the Employer Benefit Plan established pursuant to the Wage Agreement. The Complainants also request reimbursement of any health insurance premiums they paid to continue their health benefits coverage during the work stoppage.
Dispute
Is the Respondent required to provide health benefits coverage for the Complainants during a work stoppage, and, if so, is the Respondent responsible for reimbursement of the premiums paid by some of the Complainants to continue such coverage during the work stoppage?
Positions of the Parties
Position of the Complainants: The Respondent is required under the terms of the Wage Agreement and the Employer Benefit Plan to pay the medical expenses incurred by the Complainants and their eligible dependents during the period from June 12, 1989 through July 19, 1989, and to reimburse the Complainants for health insurance premiums paid by the Complainants to continue coverage during the work stoppage.
Position of the Respondent: The Respondent is not required to provide health benefits coverage for the Complainants during the work stoppage because the Complainants were not considered “actively at work” or “actively employed” during the work stoppage. The Respondent also contends that neither the 1988 Wage Agreement nor the Employer Benefit Plan requires an Employer to provide health benefits coverage during a work stoppage.
Pertinent Provisions
Article XX Section (c)(3)(i) of the National Bituminous Coal Wage Agreement of 1988 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…. The plans established pursuant to this subsection are incorporated by reference and made a part of this Agreement, and the terms and conditions under which the health and other non-pension benefits will be provided under such plans are as to be 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 1988, 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. 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
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
(2) is on layoff or disabled from the Employer and had continuing eligibility as of the effective date of the Wage Agreement for coverage under the 1984 Employer’s Benefit Plan (“prior Plan”) as a laid-off or disabled employee. Coverage for such laid-off or disabled Employees shall not continue beyond the date when they would no longer have been eligible for such coverage under the provisions of the prior Plan.
(3) Except as provided in paragraph (2) above, any Employee of the Employer who is not actively at work* for the Employer on the effective date of the Wage Agreement will not be eligible for coverage under the Plan until he returns to active employment with the Employer.
Any Employee of the Employer who as of January 31, 1988, was eligible for benefits under the prior Plan who is not scheduled to work within two weeks after the effective date of the Wage Agreement because of lack of work, such an Employee will, for purposes of this Plan, be considered eligible for coverage under this Plan as of the effective date of the Wage Agreement but as an Employee on layoff as of such date.
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* Actively at work includes an Employee of the Employer who was actively at work on January 31, 1988, 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.
Article III D. (1)(c) and (e) of the Employer Benefit Plan provide, in pertinent part:
Article III – Benefits
D. General Provisions
(1) Continuation of Coverage
(c) Leave of Absence
1. During any period for which an employee is granted an approved leave of absence for the purpose of accepting temporary employment with the United Mine Workers of America (UMWA) such Employee shall be eligible to continue health, life and accidental death and dismemberment insurance coverage for a period not to exceed 120 calendar days within any 12-month period.
2. During any period for which an Employee is granted an approved leave of absence for any other reason, such Employee’s eligibility for health, life and accidental death and dismemberment insurance coverage shall be terminated as of the day last worked and shall not be reinstated until the Employee returns to active work except as provided in paragraph 3 below.
(e) Quit or Discharge
If an Employee quits (for any reason) or is discharged, health, life and accidental death and dismemberment insurance coverage will terminate as of the date last worked….
Discussion
The Respondent contends that it is not required to provide health benefits coverage for the Complainants during the work stoppage from June 12, 1989 through July 19, 1989. The Trustees have addressed the issue of an Employer’s obligation under the Employer Benefit Plan to provide coverage for Employees during a work stoppage in ROD 88-181 (copy enclosed herein). In their decision in ROD 88-181, which assumed that the Wage Agreement was in full force and effect, the Trustees concluded that under the Employer Benefit Plan, the Employer was responsible for providing health benefits coverage for its Employees during the work stoppage. The Respondent has made the additional argument that the negotiators of the Wage Agreement did not intend that strikers would ever be entitled to health benefits coverage because they provided for termination of such coverage during strikes occurring at the expiration of a Wage Agreement and for resumption of such coverage when strikers return to work after such strikes. The provisions regarding coverage during strikes occurring at the expiration of a Wage Agreement do not apply to a work stoppage occurring when the Wage Agreement is assumed to be in effect. Accordingly, the Respondent is responsible for providing health benefits coverage for the Complainants during the work stoppage from June 12, 1989 through July 19, 1989.
The Complainants also ask that the Respondent be required to reimburse them for health insurance premiums which Complainants paid to the Respondent pursuant to a COBRA continuation of coverage offer made by the Respondent at the time of the termination of coverage. The Trustees have previously held that Employers were not responsible for reimbursement of private insurance premiums even though the Trustees found the Employers to be obligated for coverage under the Employer Benefit Plan for the periods covered by the premiums. See RODs 81-17, 81-640 and 84-437. The RODs are distinguishable because in all of these cases the Insurance was purchased by the beneficiaries on their own from third party insurers. In this instance the premiums are paid directly to the employer for a continuation of coverage in the Employer Benefit Plan. Thus the Plan has met any obligations to pay benefits for the beneficiary. However, based on the Trustees assumption that the Wage Agreement was in full force and effect, there was no COBRA event and therefore the premiums were collected in error. Therefore, the premiums must now be refunded to the beneficiaries.
Opinion of the Trustees
Based upon the provisions of and consistent with the terms of the Employer Benefit Plan, the Respondent is responsible for providing health benefits coverage to the Complainants and their eligible dependents during the work stoppage from June 12, 1989 through July 19, 1989, and for providing reimbursement for health insurance premiums paid by the Complainants to continue coverage during the work stoppage.