Employee Benefits:

Financing Health Benefits of Retired Coal Miners

HRD-92-130FS: Published: Jul 22, 1992. Publicly Released: Aug 5, 1992.

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Pursuant to a congressional request, GAO provided information regarding proposed legislation for coal industry retirees' health benefits and existing pension trusts, focusing on: (1) the characteristics of the trusts' beneficiaries; (2) the benefits provided; and (3) the present and projected financial condition of the trusts.

GAO found that: (1) both trusts provide inpatient and outpatient hospital benefits, physician and primary care services, low prescription drug copayment benefits, and other specialized benefits; (2) enrollment in the trusts totals about 116,000; (3) many employers and signatories to the trusts are either no longer in business, their business status is unknown, or the company is unidentifiable; (4) annual net costs for both trusts total about $230 million; (5) requiring beneficiaries to reenroll or recertify would not identify a significant number of ineligible beneficiaries; (6) nonsignatory mines operated by signatory companies produced about 66 million tons of coal in 1990, and a significant number of formerly signatory mines are operated by nonsignatory companies; (7) the trusts' funding formula is based on employee work hours and additional contributions coming from employers through coal tonnage purchases from other operators; (8) past and pending lawsuits attempt to require signatory and nonsignatory coal companies to fund the trusts; (9) changes in the actuarial surplus include plan benefits, actuarial assumptions used, and the plan's actual experience; and (10) withdrawal liability of the largest companies totals $350 million.

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