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OPINION OF TRUSTEES
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In Re
Complainants: Laid-off Employees
Respondent: Employer
ROD Case No: 84-409 – August 12, 1987
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 benefits coverage under the terms of the Employer Benefit Plan.
Background Facts
The Complainants worked in classified jobs for the Respondent until on or about February 27,
1987, when the Respondent ceased operations. The representative for the Complainants has
stated that the Respondent provided health benefits coverage for eight (8) of the Complainants
through a Health Maintenance Organization (HMO) until November 4, 1986, when such
coverage was terminated, and through a Blue Cross/Blue Shield plan for the remaining
Complainants. Information provided to the Funds indicates that health benefits coverage for the
Complainants who were enrolled in the Blue Cross/Blue Shield plan was terminated effective
January 1, 1987.
The representative for the Complainants contends that the Respondent is responsible for
providing health and other non-pension benefits for the Complainants as Employees and laid-off
Employees during their individual periods of eligibility as determined under the Employer
Benefit Plan. The Respondent states that it has ceased operations and is financially unable to
provide health and other non-pension benefits for the Complainants. The Respondent has stated
that it is attempting to obtain additional financing in order to resume operations and to provide
health benefits for its laid-off Employees.
Dispute
Whether the Respondent is responsible for providing health and other non-pension benefits for
the Complainants as Employees and laid-off Employees.
Positions of the Parties
Opinion of Trustees
Resolution of Dispute
Case No. 84-409
Page 2
Position of the Complainants: The Respondent is responsible for providing health and other nonpension benefits for the Complainants as Employees and laid-off Employees during their
individual periods of eligibility as determined under the terms of the Employer Benefit Plan.
Position of the Respondent: The Respondent is currently financially unable to provide health and
other non-pension benefits for the Complainants.
Pertinent Provisions
Article XX Section (c)(3)(i) of the National Bituminous Coal Wage Agreement of 1984 provides
in pertinent part:
(c) 1974 Plans and Trusts
(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 provides:
Article II – Eligibility
The persons eligible to receive the health benefits pursuant to Article III are as follows:
Opinion of Trustees
Resolution of Dispute
Case No. 84-409
Page 3
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 the
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
Discussion
Article XX (c)(3)(i) of the National Bituminous Coal Wage Agreement of 1984 requires a
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 health benefits does not relieve it of its obligation to provide such
benefits under the Wage Agreement.
Opinion of Trustees
Resolution of Dispute
Case No. 84-409
Page 4
Article II A. (4) of the Employer Benefit Plan provides that active Employees shall be eligible
for health and other non-pension benefits from the first day worked for the Employer. Article III
D. (1)(a) provides that such coverage shall continue for each laid-off Employee for a period
based on the number of hours worked by the Employee for the Employer during the 24-month
period prior to the date last worked. Inasmuch as the Complainants were active Employees of the
Respondent until on or about February 27, 1987, and laid-off Employees thereafter, the
Respondent is responsible for providing health and other non-pension benefits for the
Complainants during their individual periods of eligibility as determined under the terms of the
Employer Benefit Plan.
Opinion of the Trustees
The Respondent is responsible for providing health and other non-pension benefits for the
Complainants during their individual periods of eligibility as determined under the terms of the
Employer Benefit Plan.
