Opinion of Trustees
Resolution of Dispute
Case No. 84-609
Page 1
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OPINION OF TRUSTEES
______________________________________________________________________________
In Re
Complainants: Employees
Respondent: Employer
ROD Case No: 84-609 – April 20, 1988
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 health benefits coverage under the terms of the Employer Benefit Plan.
Background Facts
The Complainants are Employees working in classified jobs for the Respondent. The Respondent
is signatory to the National Bituminous Coal Wage Agreement (“Wage Agreement”) of 1984.
The Respondent provided health benefits coverage for the Complainants through the Bituminous
Industry Trust/Business Insurance Trust (“BIT”) and California Life Insurance from November
1, 1985 through January 31, 1987. The BIT was terminated on April 30, 1987. Due to
insolvency, the BIT and California Life Insurance have ceased paying health benefits claims for
services rendered prior to April 30, 1987.
The Respondent provided health benefits coverage for the Complainants through Mountain
Trails Health Plan from February 1, 1987 through August 31, 1987. Information provided to the
Funds indicates that Mountain Trails Health Plan was declared insolvent, effective September
23, 1987. Due to insolvency, Mountain Trails Health Plan has ceased paying benefits claims for
services rendered prior to September 23, 1987.
The Respondent has provided health benefits coverage for the Complainants through a different
insurance carrier since September 1, 1987. The Complainants have submitted copies of unpaid
bills for medical services rendered during their employment with the Respondent prior to
September 1, 1987. The Complainants ask whether the Respondent is responsible for payment
of their medical bills that are unpaid due to the insolvency of BIT, California Life Insurance, and
Mountain Trails Health Plan.
Dispute
Opinion of Trustees
Resolution of Dispute
Case No. 84-609
Page 2
Whether the Respondent is responsible for payment of the Complainants’ medical bills that are
unpaid due to the insolvency of BIT, California Life Insurance, and Mountain Trails Health Plan.
Positions of the Parties
Position of the Complainants: The Complainants ask whether the Respondent is responsible for
payment of their outstanding medical bills that are unpaid due to the insolvency of the insurance
carriers.
Position of the Respondent: The Respondent has not responded to repeated correspondence from
Funds’ staff regarding its position in this dispute.
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 provide:
Opinion of Trustees
Resolution of Dispute
Case No. 84-609
Page 3
Article II – Eligibility
The persons eligible to receive 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.
Discussion
Article XX Section (c)(3)(i) of the 1984 Wage Agreement requires an Employer to provide an
Employer Benefit Plan… “implemented through an insurance carrier(s), [for] health and other
non-pension benefits…” It further requires that “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 II. A of the Employer Benefit Plan provides health benefits coverage to active employees
working in classified jobs for a signatory Employer. The Respondent in the instant case
implemented its Employer Benefit Plan through an employer trust fund and insurance carriers
which subsequently became insolvent. Implementation of a plan through a carrier, in and of
itself, does not relieve the Respondent of its primary obligation to provide benefits pursuant to
the Wage Agreement. Inasmuch as the Complainants were eligible for health benefits coverage
from the Respondent as active Employees at the time their outstanding medical charges were
incurred, the Respondent is responsible for payment of those charges under the terms of the
Employer Benefit Plan.
Opinion of the Trustees
The Respondent is responsible for payment of the covered medical charges incurred by the
Complainants and their eligible dependents during the Complainants’ employment with the
Respondent under the terms of the Wage Agreement and the Employer Benefit Plan.
