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OPINION OF TRUSTEES
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In Re
Complainants: Employees
Respondent: Employer
ROD Case No: 88-235 – August 22, 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 classified Employees of the Respondent, a signatory Employer. The
Complainants contend that the Respondent has failed to provide health benefits coverage at the
level prescribed by the terms of the Employer Benefit Plan established pursuant to the National
Bituminous Coal Wage Agreement (“Wage Agreement”) of 1988. The Complainants have
submitted copies of bills and notices from collection agencies of balances due for medical
expenses incurred during their employment with the Respondent.
Information provided to the Funds indicates that the Respondent provided health benefits
coverage for the Complainants through the New York Life Insurance Company from June 13,
1988 through June 14, 1989. Under this policy, benefit payments were subject to an annual
deductible of $100 and, thereafter, benefits were paid up to 80% of the covered expenses until a
beneficiary reached the annual out-of-pocket limit of $2000. One of the Complainants states that
the Respondent agreed to pay or reimburse the Complainants for their out-of-pocket expenses
under the 80/20 plan in excess of the 12-month maximum co-payment amount specified under
the Employer Benefit Plan; however, the Complainant states that such payments have not been
made. Since June 15, 1989, the Respondent has provided insurance coverage through Guardian
Insurance Company. Under this policy, benefit payments are subject to a $250 annual
deductible, after which the insurance company pays 100% of covered charges. Coverage for
vision care was not provided under either of the policies described above.
Dispute
Opinion of Trustees
Resolution of Dispute
Case No. 88-235
Page 2
Is the Respondent responsible for the provision of health benefits coverage for the Complainants
and their eligible dependents at the level prescribed by the Employer Benefit Plan?
Positions of the Parties
Position of the Complainant: The Respondent is responsible for payment of covered medical
expenses incurred by the Complainants and their eligible dependents and for the provision of
health benefits coverage for the Complainants and their eligible dependents at the level
prescribed by the Employer Benefit Plan.
Position of the Respondent: The Respondent has not replied to repeated correspondence from
Funds’ staff requesting its position in this dispute.
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.
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).
Opinion of Trustees
Resolution of Dispute
Case No. 88-235
Page 3
(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. (1) and (4) of the Employer Benefit Plan provide:
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
(4) a new Employee will be eligible for health benefits from the first day
worked with the Employer.
Article III A. (8) and (9) (a) of the Employer Benefit Plan provide, in pertinent part:
Article III – Benefits
A. Health Benefits
(8) Co-Payments
Certain benefits provided in this Plan shall be subject to the co-payments
set forth below and such co-payments shall be the responsibility of the
Beneficiary….
Co-Payments for covered Health Benefits are established as follows:
________
*
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. 88-235
Page 4
Benefit Co-Payment
(a) Physician services as an out- Working Group — $7.50 per
patient as set forth in Section A visit up to a maximum of $150
(2) and physician visits in con- per 12-month period(*
) per
nection with the benefits set family.
forth in Section A(3), paragraph Non-working Group — $5 per
(c) but only for pre- and post- visit up to a maximum of $100
natal visits if the physician per 12-month period(*
) per
charges separately for such visits family.
in addition to the charge for
delivery, and paragraphs (g)
through (m), paragraph (n) except
inpatient surgery, paragraph (o)
and Section A(7) paragraph (f).
(b) Prescription drugs and insulin, $5 per prescription or refill
as set forth in Section A(4) and up to a $50 maximum per
take-home drugs following hospi- 12-month period(*
) per
tal confinement as set forth in family.
Section A(1)(a). Note: For purposes of this
co-payment provision, a
prescription or refill shall
be deemed to be each 30 days
(or fraction thereof) supply.
(9) Vision Care Program
Actual Charge Up to
(a) Benefits Maximum Amount Frequency Limits
Vision Examination $20 Once every 24 months
Per Lens (Maximum =2) Once every 24 months
– Single Vision 10
– Bifocal 15
– Trifocal 20
– Lenticular 25
– Contact 15
Frames 14 Once every 24 months
________
*
The 12-month periods shall begin on the following dates: March 27, 1988;
March 27, 1989; March 27, 1990 and March 27, 1991 and March 27, 1992.
Discussion
Opinion of Trustees
Resolution of Dispute
Case No. 88-235
Page 5
Article III. A. (8) of the Employer Benefit Plan provides that certain benefits provided under the
Plan shall be subject to co-payments of $5.00 or $7.50, and such co-payments shall be the
responsibility of the beneficiary. The usual procedure for filing claims as contemplated under
the terms of the Wage Agreement is one in which the beneficiary is expected to authorize the
provider to bill the insurance carrier for services rendered and to pay only the co-payment charge
set forth in Article III. A. (8), until the specified maximum yearly amount is reached. The
procedure for filing claims and the method of payment established by the Respondent in this case
is inconsistent with the claim procedure contemplated under the terms of the Wage Agreement
and the Employer Benefit Plan.
Article XX Section (c)(3)(i) of the 1988 Wage Agreement requires each signatory Employer to
establish and maintain an Employer Benefit Plan, implemented through an insurance carrier(s),
to provide health and other non-pension benefits for its Employees. The Wage Agreement
further stipulates that benefits provided by the Employer pursuant to such Plan shall be
guaranteed during the term of the Agreement at levels set forth in such Plan. Thus, levels of
benefits to be provided to Employees, Pensioners and their dependents and survivors which are
established through collective bargaining may not be unilaterally changed. In addition, given the
clear language of Article XX, an Employer cannot partially implement its plan through an
insurance carrier and offer to pay a portion of the Plan benefits itself. The Trustees conclude that
the Respondent’s use of non-conforming health coverage plans and its offer to pay or reimburse
Employees for certain out-of-pocket expenses are inconsistent with the express provisions of the
Wage Agreement and the Employer Benefit Plan.
Opinion of the Trustees
The Respondent’s health coverage plans are inconsistent with the express provisions of the 1988
Wage Agreement. The Respondent is responsible for providing health benefits coverage for the
Complainants and their eligible dependents at the level specified in the Employer Benefit Plan
and for payment of the Plan-covered medical expenses incurred by the Complainants and their
eligible dependents.