§9704 Liability of assigned operators

Summary

Assigned operators must pay a yearly charge for each plan year starting on or after February 1, 1993. The yearly charge has three parts: a health part based on a per-person rate times the number of eligible people assigned to the operator, a death benefit part based on the Fund’s actuarial cost, and a part for beneficiaries who are not assigned to any operator. The Social Security Commissioner sets the per-person health rate using 1991 plan costs (plan year beginning July 1, 1991) divided by the number of people and then adjusts it by the change in the medical Consumer Price Index from 1992. If Medicare cuts reduce Fund benefits, trustees must raise the per-person rate to keep benefit levels. For plan years ending on or before September 30, 2006, operators pay a share of unassigned-beneficiary costs; for plan years beginning on or after October 1, 2006, those costs are normally paid from transfers under section 9705(b), unless those transfers fall short of amounts required under section 402 of the Surface Mining Control and Reclamation Act (30 U.S.C. 1232), in which case operators pay their share of the shortfall. Trustees must keep three separate accounts for the three charge parts, crediting premiums and transfers and charging benefits and administrative costs. Administrative costs are allocated by prior-year spending and interest is credited to the health account. Shortfalls or surpluses generally change next year’s premiums proportionally, subject to rules about carryovers and benefit limits. Yearly charges are paid in 12 equal monthly payments due on the 25th of each month; the February 1, 1993 plan year charge is added to the October 1, 1993 charge. Trustees must give the Commissioner needed plan information within 60 days after enactment. Special rules require certain 1988-agreement operators to make extra payments for costs in the Feb 1, 1993 plan year and through September 30, 1994, which reduce their premiums. Certain operators that meet detailed conditions may instead make a certified lump-sum payment equal to the present value of their liability; if an enrolled actuary files the valuation and 90 calendar days pass without objection, the Fund will hold that money in a separate account and use it only to pay that operator’s premiums. The law defines applicable percentage as an operator’s share of assigned beneficiaries based on assignments as of October 1, 1993 (with later redeterminations for appeals, ceased businesses, and revoked assignments), and it uses “controlled group of corporations” to mean a corporate group whose common parent’s shares are publicly traded on a U.S. exchange.