The Funds’ Beneficiaries

The Coal Act limited coverage under the Funds to retired coal miners,  their spouses and dependents who were eligible for benefits under former  UMWA retiree benefit plans. If an employer has   gone out of business, or the premium cannot otherwise be collected, the  cost of affected 1992 Benefit Plan beneficiaries is shared by other coal  companies that were signatories to a prior agreement between the  industry and UMWA and that have either current or potentially eligible  beneficiaries under the 1992 Benefit Plan. Along Some Dimensions, the Funds’ Benefits Are More Generous than Those Offered by Major Manufacturers or Companies with Unionized Labor Forces

In four areas—premium contributions, annual deductible, the cap on  beneficiary out-of-pocket expenses, and coverage for SNF care—the  Funds’ benefits are more generous than those benefits typically offered to  retirees and workers by major manufacturing companies or to unionized  hourly workforces in other companies. In  contrast, most employer-sponsored retiree plans do not offer SNF care. The Funds’ Beneficiaries Have Higher Health Care Costs than Comparable Beneficiaries

The average annual health care cost of the Funds’ beneficiaries is  approximately 29 percent higher than the average cost of demographically  similar Medicare retirees with employer-provided insurance. Specifically, they  emphasized that coal miners traded lower pensions for better health care  benefits in their labor contracts. Retiree Health Insurance: Gaps in Coverage and Availability,  GAO-02-178T. Financial and Legal Issues Facing the United Mine Workers of America  Combined Benefit Fund, GAO/AIMD-00-280R.
What GAO Found

More than 100,000 retired coal miners and their spouses and dependents in 1992 faced a potential decrease in their employment-related health insurance coverage or loss of such coverage altogether. Some former employers had stopped mining coal or gone out of business and were no longer contributing to the United Mine Workers of America (UMWA) retiree benefit funds. To ensure that these individuals would continue to receive the health benefits specified in previous collective bargaining agreements reached with coal companies, often gained in exchange for lower pensions, Congress enacted the Coal Industry Retiree Health Benefit Act of 1992 (Coal Act). The Coal Act replaced the existing UMWA benefit funds with the Combined Benefit Fund (CBF) and the 1992 Benefit Plan. These funds' benefits requires less cost sharing by beneficiaries and provides more extensive coverage than benefit packages offered by the major manufacturing companies and companies with unionized workforces. However, the extent of coverage is generally comparable. The cost of health care for the funds' beneficiaries in 1999 was about 29 percent higher than for demographically similar Medicare beneficiaries with employer-sponsored insurance. The funds' officials have attempted to control costs largely through approaches that do not reduce or limit the benefits for beneficiaries, do not increase beneficiary cost-sharing requirements, or that have a minimal impact on beneficiaries.