§9712 Establishment and Coverage of 1992 Umwa Benefit Plan

Summary

Settlors must set up a private plan called the United Mine Workers of America 1992 Benefit Plan soon after the law was passed. The plan will be treated as tax-exempt and as an employee welfare and multiemployer benefit plan. The settlors design how the plan works and pick the board of trustees, which starts with five members. Money sent to the plan under section 402(h) and (i) of the Surface Mining Control and Reclamation Act of 1977 must be put into the plan and used to pay health benefits for beneficiaries who do not have a monthly premium paid for them. A special 1993 plan must also take similar transferred amounts and use them for the specific people and benefits identified in that Act. The plan can only cover eligible beneficiaries who are not covered by the Combined Fund. Eligible beneficiary: someone who would have been eligible for the 1950 or 1974 UMWA Benefit Plans based on age and service as of February 1, 1993, or someone required to be covered under section 9711 but not getting coverage from the last signatory operator, and their family members; coal industry retirees who left after September 30, 1994, and their beneficiaries are excluded. Health coverage must be basically the same as what the 1950 and 1974 plans offered on January 1, 1992. The plan must set up managed-care and cost-control rules that keep patient choice but encourage using network providers; examples include drug formularies, negotiated discounts, payment limits tied to Medicare rates, service-appropriateness checks, provider-run utilization review, and point-of-service network use. Any managed-care system must meet quality standards approved by a medical peer review panel. 1988 last signatory operators must pay a monthly per-beneficiary premium for their eligible beneficiaries, post security (bond, letter of credit, or cash) for a share of projected future costs, and pay an extra backstop premium if required federal transfers fall short. Premiums can be adjusted yearly for cost changes. Other last signatory operators must pay the monthly premium for their beneficiaries. Operators and related parties share full responsibility for amounts they must pay. Premiums required by the plan are tax-deductible without regard to limits tied to prefunding health benefits. 1988 last signatory operator: a last signatory operator that was an agreement operator in 1988.