Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, March 18, 1990 TAG: 9003182344
SECTION: VIRGINIA PAGE: C1 EDITION: METRO
SOURCE: Associated Press
DATELINE: LEXINGTON, KY. LENGTH: Medium
The study recommended no solutions to the funds' problems.
The study was conducted by Employee Benefit Research Institute, a non-profit organization based in Washington.
It was financed by a grant from the Washington, D.C., law firm of Williams and Jensen, which represents several coal companies, said institute researcher Karen Horkitz.
The study said the Pittston Coal Group Inc., which recently settled a bitter UMW strike, is an example of how fewer coal companies are contributing to the fund.
Under its new contract with the UMW, Pittston will no longer make payments into the 1950 health fund, in return for a $10 million lump-sum payment.
UMW spokesman John Duray said the study failed to examine the history of collective bargaining within the coal industry, in which there have been tradeoffs between full health coverage and modest wage increases.
Duray also said the report did not consider the increased medical care required by people who had worked in underground coal mines for long periods.
The study released Friday comes a week after U.S. Labor Secretary Elizabeth Dole created a commission to recommend solutions to what she called a "financial crisis" in the funds.
The funds' current deficits have caused delays in payments to hospitals, doctors, clinics and pharmacies. Some health-care providers said the delays are getting worse.
"It's going to be unbearable," said Joe Myers, owner of Lee Drug in Harlan. Myers said the funds owe him more than $100,000 and are four to six months behind in making payments.
Those delays have led some pharmacists in eastern Kentucky to stop honoring the funds.
There are two funds, both financed by coal companies that have contracts with the UMW. The funds are separate from the union and are operated by independent trustees.
The 1950 fund provides medical benefits to miners who retired before 1976 and their dependents. That fund had a $45.2 million deficit June 30.
The 1974 fund provides medical benefits for post-1976 retirees whose last employer is no longer in business. The 1974 fund will have a deficit of $21 million to $31 million by June 30, the study said.
The 1950 fund's average payment for each beneficiary was $1,602 in 1988, while the 1974 fund's was $2,156, the study said. The average medical benefit payment for all U.S. employers was $854 in 1988.
That "exceptionally high level" of payments may exist because the funds do not require beneficiaries to help pay medical costs, the study said.
Also, the funds have few limits on coverage, it said.
by CNB