Opinion of Trustees
Resolution of Dispute
Case No. 88-196
Page 1
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OPINION OF TRUSTEES
_____________________________________________________________________________
In Re
Complainants: Employees
Respondent: Employer
ROD Case No: 88-196 – 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.
According to the Respondent, the Complainants were immediately asked to return to work on
their next scheduled shift, and they were informed that refusal to return to work would result in
the suspension of their health benefits. The Respondent notified the Complainants by letter
dated June 28, 1989 that, if their health benefits coverage was terminated, they could choose to
continue such coverage at their expense for a period of up to 18 months under the Consolidated
Omnibus Budget Reconciliation Act of 1985 (COBRA). The Respondent notified the
Complainants by letter dated July 6, 1989 that because they had not returned to work, their
employer-provided health benefits coverage was terminated effective July 5, 1989. Some of the
Complainants elected to continue their coverage by paying the appropriate premium to the
Respondent’s COBRA administrator. Employer-provided coverage was reinstated when the
Complainants returned to work on July 18, 1989.
The Complainants contend that the Respondent should pay the medical expenses incurred by
them and their dependents during the period from July 5, 1989 through July 17, 1989 because
Article XX of the National Bituminous Coal Wage Agreement (“Wage Agreement”) of 1988
does not provide for the cancellation of health benefits coverage during an unauthorized work
Opinion of Trustees
Resolution of Dispute
Case No. 88-196
Page 2
stoppage. The Complainants also request reimbursement of any health insurance premiums they
paid to continue their health benefits coverage during the work stoppage pursuant to COBRA.
Dispute
Is the Respondent responsible for providing 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 coverage during the work stoppage?
Positions of the Parties
Position of the Complainants: The 1988 Wage Agreement does not provide for the cancellation
of health benefits coverage during a work stoppage; therefore, the Respondent is required to pay
the medical expenses incurred by the Complainants and their eligible dependents during the
period from July 5, 1989 through July 17, 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 unauthorized work stoppage because the Complainants were not
considered “active” or “working miners” and the 1988 Wage Agreement was in a state of
suspension during the work stoppage. The Respondent contends that since the Plan provides for
the termination of coverage during an approved leave of absence, it is reasonable to terminate
coverage during an unapproved leave of absence such as the work stoppage in this case. In
addition, the Respondent is not required to reimburse the Complainants for premiums paid to
continue coverage during the work stoppage because neither the Wage Agreement nor COBRA
requires such reimbursement. The Respondent states that this position is consistent with
previous decisions of the Trustees in RODs 81-17, 81-640 and 84-437.
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.
Opinion of Trustees
Resolution of Dispute
Case No. 88-196
Page 3
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.
________
*
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.
Opinion of Trustees
Resolution of Dispute
Case No. 88-196
Page 4
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.
(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
Opinion of Trustees
Resolution of Dispute
Case No. 88-196
Page 5
The Complainants contend that the Respondent is required to provide health benefits coverage
during the work stoppage from July 5, 1989 through July 17, 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. Accordingly, the
Respondent is responsible for providing health benefits coverage for the Complainants for the
period during the work stoppage from July 5, 1989 through July 17, 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 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 for the period during the work stoppage from July 5, 1989 through July 17,
1989, and for providing reimbursement for health insurance premiums paid by the Complainants
to continue coverage during the work stoppage.