Black Lung Benefits Act: Authorization of Self-Insurers
Published Date: 7/30/2026
Proposed Rule
Summary
The Department is proposing revisions to regulations under the Black Lung Benefits Act (BLBA or the Act) governing authorization of self-insurers. These rules will determine the process for coal mine operators to apply for authorization to self-insure, the requirements operators must meet to qualify to self-insure, the amount of security self-insured operators must provide, and the types of security accepted for operators to self-insure.
Analyzed Economic Effects
8 provisions identified: 2 benefits, 4 costs, 2 mixed.
New $400,000 Minimum for First-Time Self-Insurers
If you are a coal mine operator applying to self-insure for the first time, you must provide at least $400,000 in security to be authorized. If your present and future estimated liabilities exceed $400,000 at application or during annual reviews in the first three years, you must provide 100% of those estimated liabilities as security; this three-year special requirement ends after the operator's first three years of authorization.
Three-Year Phase-In of Required Security
Approved self-insured coal operators may phase in their required security over three years: at least 34% in year one, at least 33% in year two (total ≥67%), and the remaining 33% in year three. OWCP will typically give 30 calendar days to submit each deposit (extendable for good cause), and initial authorization is contingent on receipt of either the full security amount or the first security deposit plus a completed OWCP-1 Agreement and Undertaking.
Risk-Based Tier System Replaces 100% Rule
OWCP would replace the prior flat 100% security requirement with a multi-tiered, risk-focused framework using a Composite Solvency Score to set required security percentages. The Composite Solvency Score is calculated from three indicators: (1) a company's long-term credit rating, (2) the Altman Z-score, and (3) the Ohlson O-score, and operators will be placed into one of seven tiers determining what percentage of estimated liabilities must be secured.
New Security Options with Usage Limits
The rule would expand acceptable security methods and set limits: letters of credit may secure at most 50% of estimated liability; newly created 501(c)(21) trusts may secure at most 50%; reinsurance (stop-loss/catastrophic) may cover up to 90% but must be paired with other security as a self-insured retention; parental guaranties are allowed but limited by the parent's Composite Solvency Score (parents with score ≥90 may secure over 50%, score ≥70 may secure less than 50%, and no guaranty allowed if score <70). Operators may also set a hierarchy of which instruments pay first in a default.
New Financial Documentation Requirements
Applicants must include, if available, their most recent long-term credit rating report issued within the past 18 months, and must submit audited financial statements and market capitalization data (for public companies) so OWCP can calculate Altman Z-scores and Ohlson O-scores. OWCP may also request additional information as needed to support these calculations.
Parent Company Liability Clarified
The rule clarifies that a parent company whose self-insurance authorization includes a subsidiary remains liable for federal black lung claims based on employment with that subsidiary regardless of any sale or transfer of the subsidiary.
OWCP Can Adjust Security Between Annual Reviews
OWCP may increase or decrease an operator's required security between annual reauthorization reviews when presented with material changes in submitted evidence or a change in the operator's Composite Solvency Score. Operators will receive notification of any adjustments.
Fallback: 30 Days to Buy Commercial Insurance
If an applicant cannot meet OWCP's security requirements, the applicant has 30 calendar days after OWCP issues its decision to obtain and submit proof of a commercial insurance policy or contract of insurance.
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Key Dates
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