March 15, 2017
Health Benefits for United Mine Workers of America Retirees
Section 167 of P.L. 114-254 (H.R. 2028, Further
the 1993 Plan paid $63.6 million in benefit payments to
Continuing and Security Assistance Appropriations Act,
6,139 participants in calendar year 2015.
2017) contained provisions that (1) expanded eligibility for
calendar year 2017 for a plan that provides health benefits
The plans are funded by (1) premiums paid by an “assigned
for eligible retired members of the United Mine Workers of
operator,” which is a plan participant’s former employer or
America (UMWA), a labor union that primarily represents
another responsible party if ownership of the former
coal mine workers and (2) authorized federal financial
employer has changed, and (2) two sources of federal
assistance to the plan through April 30, 2017, to pay for the
financial assistance. These sources of federal financial
benefits of the newly eligible retirees.
assistance are interest transferred from the Abandoned
Mine Reclamation Fund and supplemental payments from
On March 1, 2017, the UMWA sent notices to these newly
the General Fund of the U.S. Treasury. There is an annual
eligible retirees that their benefits would end on April 30,
cap on transfers from the General Fund of $490 million per
2017. Legislation proposed in the 115th Congress would
fiscal year, including grants to certified states and tribes that
permanently extend eligibility for the health plan and for
have reclaimed their priority abandoned coal mining sites.
the transfer of federal financial assistance to the plan to pay
the benefits of the newly eligible retirees.
The three UMWA health plans received $179.5 million
in financial assistance from the U.S. government in
This In Focus provides background on the issue of health
FY2016 and, prior to the enactment of P.L. 114-254)
benefits for UMWA retirees. For information on pension
were estimated to receive $164.7 million for FY2017.
benefits for UMWA retirees, see CRS In Focus IF10617,
Pension Benefits for United Mine Workers of America
Recent Developments for Certain
Retirees.
UMWA Retirees
The retirees who became eligible for the 1993 Plan in 2017
UMWA Retiree Health Plans
as a result of P.L. 114-254 worked for coal mining
Eligible UMWA members receive post-retirement health
companies that commenced bankruptcy proceedings in
and pension benefits from one of three multiemployer
either 2012 or 2015. Three of these companies were Patriot
health benefit plans and one multiemployer pension plan. A
Coal, Walter Energy, and Alpha Natural Resources. The
multiemployer plan is sponsored by employers in the same
UMWA had been administering a Voluntary Employee
industry and is maintained as part of a collective bargaining
Benefit Association (VEBA) with three separate funds to
agreement. These multiemployer retiree health plans are the
provide health benefits to those companies’ retirees. A
VEBA is a tax-advantaged trust fund created to finance
Combined Benefit Fund (CBF), which was established
employee benefits, such as retiree health insurance benefits.
as a result of a merger of the UMWA 1950 Benefit Plan
At the time of the VEBA’s creation, the retirees were not
and Trust and the UMWA 1974 Benefit Plan and Trust,
eligible for any of the UMWA multiemployer health plans.
UMWA 1992 Health Benefit Plan (1992 Plan), and
In March 2016, the International President of the UMWA
indicated that the UMWA was responsible for the health
UMWA 1993 Health Benefit Plan (1993 Plan).
benefits of about 12,150 Patriot Coal retirees and
dependents, 2,800 from Walter Energy, and 3,000 from
The CBF and the 1992 Plan were authorized by the Coal Alpha Natural Resources.
Industry Retiree Health Benefit Act of 1992 (Coal Act),
passed as part of The Energy Policy Act of 1992
Patriot Coal
(EPACT; P.L. 102-486). The 1993 Plan was created by
Patriot Coal was created in 2007 as spin-off from Peabody
UMWA’s 1993 collective bargaining agreement (the
Energy and was one of the largest coal mine operators in
National Bituminous Coal Wage Agreement of 1993).
the United States. Patriot filed for bankruptcy on July 9,
2012, and emerged from bankruptcy on December 18,
The amount of benefits and number of participants for the
2013. In its bankruptcy settlement, Patriot Coal and
plans were as follows:
Peabody Energy agreed to fund a VEBA to meet its
obligation under the collective bargaining agreement to
the CBF paid $80.7 million in benefit payments to 9,636 provide retirees with health benefits. Peabody Energy had
participants from October 1, 2014, to September 30,
an obligation for some of Patriot Coal’s benefit obligations
2015,
because of the past connections between the two
companies.
the 1992 Plan paid $47.6 million in benefit payments to
4,512 participants in calendar year 2015, and
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Health Benefits for United Mine Workers of America Retirees
On April 13, 2015, Peabody Energy filed for bankruptcy
Legislation Introduced in the 115th
and on May 12, 2015, Patriot Coal again filed for
Congress that Would Provide Health
bankruptcy. As part of its bankruptcy settlement, in
Benefits to Certain UMWA Retirees
December 2015, Peabody Energy agreed to contribute $7.5
In the 115th Congress, legislation has been introduced that
million per month from January 2016 to October 2016 to
would permanently extend eligibility for the 1993 Plan to
the VEBA established for Patriot workers. The Patriot
those individuals who became eligible for the plan as a
VEBA had been expected to exhaust its funds by end of
result of the P.L. 114-254 provisions.
2016. P.L. 114-254 made the retirees in the VEBA eligible
for the 1993 Plan for the year 2017 and authorized federal
H.R. 179, the Miners Protection Act of 2017, introduced by
financial assistance to the plan for these workers through
Representative David McKinley, and S. 175, the Miners
April 30, 2017.
Protection Act of 2017, introduced by Senator Joe Manchin,
are similar bills that would, among other provisions,
Alpha Natural Resources and Walter Energy
permanently extend eligibility for the 1993 Plan to Patriot
Alpha Natural Resources and Walter Energy were large
Coal, Alpha Natural Resources, and Walter Energy retirees
coal mining companies that participated in the UMWA’s
and authorize transfers of federal funds to the plan to pay
collective bargaining agreement. Both companies filed for
for the additional benefits. The bills would also transfer
bankruptcy in 2015. As part of their bankruptcy settlements,
federal funds to the pension plan that covers UMWA’s
the companies established UMWA-administered VEBAs to
retirees (the UMWA 1974 Pension Plan). The combined
fund retiree health benefits. The VEBAs covering these
amount of transfers from the General Fund of the U.S.
retirees were expected to exhaust their funds mid-2017.
Treasury to the UMWA health and pension plans would be
P.L. 114-254 made the retirees in these VEBAs eligible for
subject to an annual cap of $490 million, also including the
the 1993 Plan for the year 2017 and authorized federal
grants to certified states and tribes noted above.
financial assistance to the plan for these workers through
April 30, 2017.
S. 176, the HELP for Coal Miners Health Care Act of 2017,
introduced by Senator Mitch McConnell, would, among
Legislation Enacted in the 114th Congress other provisions, permanently extend eligibility for the
to Provide Health Benefits for Certain
1993 Plan to Patriot Coal, Alpha Natural Resources, and
UMWA Retirees
Walter Energy retirees and authorize transfers of federal
Section 167 of P.L. 114-254 (H.R. 2028, Further
funds to the plan to pay for the additional benefits. S. 176
Continuing and Security Assistance Appropriations Act,
does not contain a provision that would authorize the
2017) expanded eligibility only for calendar year 2017 for
transfer of federal funds to the UMWA 1974 Pension Plan.
the 1993 Plan. (This section was a modification of
provisions in S. 3470 in the 114th Congress that would have
For Further Information
permanently expanded eligibility in the 1993 Plan for the
For further information on these issues see
retirees of Patriot Coal, Alpha Natural Resources, or Walter
Energy.)
The Joint Committee on Taxation, Description Of The
Chairman’s Mark Of The Miners Protection Act Of
The newly eligible retirees are those whose employers were
2016, JCX-84-16, September 19, 2016,
part of a bituminous coal industry wage agreement and
https://www.jct.gov/publications.html?func=startdown&
whose health benefits would be reduced or eliminated as a
id=4956;
result of a bankruptcy that commenced in 2012 or 2015.
Those who were newly eligible were retirees from Patriot
UMWA Health and Retirement Funds, Health and
Coal, Alpha Natural Resources, or Walter Energy.
Medical Benefits, http://www.umwafunds.org/Health-
Medical-Benefits/Pages/default.aspx;
Section 167 of H.R. 2028 also required the VEBA to
transfer any funds remaining in the VEBA to the U.S.
Senate Finance Committee Hearing, The Multiemployer
Treasury. The VEBA was expected to have sufficient funds
Pension Plan System: Recent Reforms and Current
to pay benefits for the Alpha Natural Resources and Walter
Challenges, Testimony of Cecil Roberts, International
Energy retirees at least through mid-2017.
President of United Mine Workers of America, March 1,
2016,
The Congressional Budget Office (CBO) estimated that
https://www.finance.senate.gov/download/03012016-
Section 167 of P.L. 114-254 would reduce the federal
roberts-sfc-witness-testinmony; and
budget deficit by $2 million in FY2017. The amount of
federal financial assistance transferred to the UMWA health
CBO estimate for the Further Continuing and Security
plans is expected to be $49 million and is expected to be
Assistance Appropriations Act, 2017, Table 3,
offset by (1) $47 million in transfers from the UMWA
https://www.cbo.gov/sites/default/files/114th-congress-
VEBA to the U.S. Treasury and (2) $4 million in reduced
2015-2016/costestimate/H.R. 2028.pdf.
outlays by federal health programs.
John J. Topoleski, Analyst in Income Security
IF10616
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Health Benefits for United Mine Workers of America Retirees
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