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OPINION OF TRUSTEES
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In Re
Complainants: Laid-off Employees
Respondent: Employer
ROD Case No. 88-383 – June 26, 1991
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 Nine 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 laid-off Employees under the terms of the Employer
Benefit Plan.
Background Facts
The Complainants were employed in classified positions for the Respondent, a signatory
Employer. One of the Complainants last worked for the Respondent on December 31, 1990.
The others last worked or January 2, 1991, at which time the Complainants were laid off.
The representative for the Complainants states that the Respondent notified the Complainants
that it could not afford to pay their insurance premiums for December 1990 and, if the
Complainants wanted to maintain their health benefits, one-half of the premium payment would
be deducted from their paycheck. The complainants’ representative has submitted copies of pay
stubs which show that an amount of $150.00 was deducted for insurance from the Complainants’
December 22, 1990 paychecks. In January 1991, the Respondent notified the Complainants by
letter that if they wanted to continue their insurance coverage for January, they were to pay the
premium no later than January 25, 1991. They were also notified that failure to do so would
result in the cancellation of the Complainants’ insurance coverage effective January 1, 1991.
The representative for the complainants contends that the Respondent is required to provide
continued benefits coverage for the complainants during their individual periods of eligibility as
determined under the terms of the Employer Benefit Plan. The representative also contends that
the Respondent is required to reimburse the complainants for insurance premiums paid by the
Complainants during periods of eligibility for coverage under the Employer Benefit Plan. The
Respondent states that it is financially unable to provide insurance coverage for the
Complainants.
Opinion of Trustees
Resolution of Dispute
Case No. 88-383
Page 2
Dispute
Whether the Respondent is required to provide health benefits coverage for the Complainants
and reimbursement for Insurance premiums paid by the Complainants.
Positions of the Parties
Position of the Complainants: The Respondent is required to provide continued benefits
coverage for the Complainants as laid-off Employees under the terms of the Employer Benefit
Plan and to provide reimbursement for Insurance premiums paid by the Complainants to
maintain coverage during their periods of eligibility for coverage under the Employer Benefit
Plan.
Position of the Respondent: The Respondent is financially unable to provide insurance coverage
for the Complainants.
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 far its Employee’ 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 1988, as amended from time-to time and any successor
agreement.
Opinion of Trustees
Resolution of Dispute
Case No. 88-383
Page 3
(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
(4) A new Employee will be eligible for health benefits from the first
day worked with the Employer.
Article III D. (1)(a) of the Employer Benefit Plan provides:
Article III – Benefits
D. General Provisions
(1) Continuation of Coverage
(a) Layoff
If an Employee ceases work because of layoff, continuation of
health, life and accidental death and dismemberment insurance coverage is
as follows:
Number of Hours Worked for
the Employer in the 24
Consecutive Calendar Month
Period Immediately Prior to Period of Coverage
the Employee’s Date Continuation from he
Last Worked Date Last worked
2,000 or more hours Balance of month plus
12 months
500 or more but less than Balance of month plus
2,000 hours 6 months
Less than 500 hours 30 days
Opinion of Trustees
Resolution of Dispute
Case No. 88-383
Page 4
Discussion
Article XX Section (c)(3)(i) of the 1988 Wage Agreement requires each signatory Employer to
establish and maintain an Employer Benefit Plan to provide health and other non-pension
benefits for its Employees. The Wage Agreement stipulates that benefits provided by the
Employer pursuant to such Plan shall be guaranteed during the term of the Agreement by that
Employer at levels set forth in such Plan. The Respondent’s claim that it Is financially unable to
provide insurance coverage does not relieve It of Its obligation to provide health and other nonpension benefits coverage under the terms of the Wage Agreement.
Article II A.(4) of the Employer Benefit Plan provides health benefits coverage for active
Employees working in classified jobs for a signatory Employer. Article III.D.(13(a) of the Plan
provides continued benefits coverage for laid-off Employees based upon the number of hours
worked for the Employer during the 24-month period immediately prior to the date last worked.
Inasmuch as the Complainants were actively employed in classified positions by the Respondent
until they were laid off in January 1991, the Respondent Is required to provide health and other
non-pension benefits coverage to the Complainants during their employment and during their
individual periods of eligibility for coverage as laid-off Employees, as determined pursuant to
Article III D.(13(a) of the Employer Benefit Plan.
The Complainants have asked that the Respondent be required to reimburse them for Insurance
premiums paid to the Respondent during their periods of eligibility for coverage under the
Employer Benefit Plan. The Trustees have held that an Employer who is obligated to provide
coverage is not responsible for reimbursement of the cost for insurance premiums when the
insurance was purchased by an Employee from a third party insurer. See RODs 81-17, 81-640
and 84-437. However, where the Employee has paid the Employer for the cost of insurance
premiums to maintain coverage under the Employer Benefit Plan during a period when the
Employer is obligated to provide coverage, the Employer is required to reimburse the Employee
for the cost of the insurance premiums. See ROD 88-195 (copy enclosed herein). Consistent
with the Trustees’ finding in ROD 88-195, the Complainants in this case are entitled to
reimbursement of the insurance premiums that were deducted from their paychecks by the
Respondent.
Opinion of the Trustees
The Respondent is required to provide health benefits coverage for the Complainants and their
eligible dependents during the Complainants’ employment and during their Individual periods of
eligibility for continued coverage as laid-off Employees. The Respondent is also required to
provide reimbursement for premiums paid by the Complainants to maintain their coverage
during such periods.
