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OPINION OF TRUSTEES
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In Re
Complainant: Laid-off Employees
Respondent: Employer
ROD Case No: 98-038 – January 28, 2003
Trustees: A. Frank Dunham, Michael H. Holland, Marty D. Hudson and
Elliot A. Segal.
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 on January 31,
2002, when they were laid off, and the company ceased operations. The representative for the
Complainants states that the Respondent stopped paying medical claims around August 2001.
As a result, the Complainants have received collection notices. The representative for the
Complainants also states that the Respondent is required to provide payment of the covered
medical expenses incurred by the Complainants and their eligible dependents during their
employment and during their period of eligibility for continued coverage as laid-off Employees.
The UMWA filed a lien against the Respondent for the Complainants unpaid medical bills. The
Respondent states that money to pay the unpaid medical bills is currently in an escrow account
and should be released shortly. The representative for the Complainants states that the money
for the Complainants’ medical bills has been released; however, it is insufficient to pay all the
outstanding medical bills. In addition, the representative states that there is no money to provide
continuation of coverage for the laid-off employees.
The Respondent is signatory to the National Bituminous Coal Wage Agreement (“Wage
Agreement”) of 1998.
Dispute
Is the Respondent required to provide coverage for the Complainants’ unpaid medical bills and
for the provision of health benefits coverage for the Complainants as laid-off Employees under
the terms of the Employer Benefit Plan?
Opinion of Trustees
ROD Case No. 98-038
Page 2
Positions of the Parties
Position of the Complainant: The Respondent is responsible for payment of the covered medical
charges incurred by the Complainants during their employment and during their periods of
eligibility for continued coverage as laid-off Employees under the terms of the Employer Benefit
Plan.
Position of the Respondent: The Respondent states that the delinquent accounts will be settled.
Pertinent Provisions
Article XX Section (c)(3)(i) of the National Bituminous Coal Wage Agreement of 1998 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 and who are not eligible to receive benefits from a plan maintained
pursuant to the Coal Act. The benefits provided by the Employer to its eligible
Participants pursuant to such plan shall be guaranteed during the term of this Agreement
by that Employer at levels set forth in such plan. . . .
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 Agreement of 1998,
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:
Opinion of Trustees
ROD Case No. 98-038
Page 3
Article II – Eligibility
The person eligible to receive the health benefits pursuant to Article III are as follows:
A. Active Employee
(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 of Coverage
Period Immediately Prior to Continuation from
the Employee’s Date Last Worked the Date Last Worked
2,000 or more hours Balance of month
plus 12 months
500 or more but less Balance of month
than 2,000 hours plus 6 months
Less than 500 hours 30 days
Opinion of Trustees
ROD Case No. 98-038
Page 4
Discussion
Article XX (c)(3)(i) of the 1998 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.
Article II A. (4) of the Employer Benefit Plan provides health benefit coverage for active
Employees working in classified jobs for a signatory Employer. Article III D. (1)(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.
The Complainants were actively employed in classified positions when they were laid off by the
Respondent in January 2002. Therefore, the Respondent is required to provide health benefits
coverage to the Complainants during their employment and for the continuation of the
Complainants’ health benefits coverage beyond January 2002, pursuant to Article III. D. (1)(a) of
the Employer Benefit Plan.
Opinion of the Trustees
The Respondent is required to provide payment of the covered medical expenses incurred by the
Complainants and their eligible dependents during their employment and during their individual
periods of eligibility for continued coverage as laid-off Employees, consistent with the terms of
the Employer Benefit Plan.