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House Bill Would Continue Health Coverage For Miners Despite Patriot Coal Bankruptcy

Wednesday, July 17, 2013
By Gayle Cinquegrani

Three Congressman from coal-producing areas introduced legislation (H.R. 2627) July 8 that would ensure continued health care coverage for miners in danger of losing their benefits because of Patriot Coal Corp.'s bankruptcy.

Rep. Ed Whitfield (R-Ky.) introduced the bill, known as the Caring for Coal Miners Act, which would amend the Surface Mining Control and Reclamation Act of 1977. Rep. David McKinley (R-W.Va.) and Rep. Shelley Moore Capito (R-W.Va.) are co-sponsoring the legislation.

“It is critical that we protect the health care benefits of the thousands of Kentucky miners who have worked hard their entire careers to earn those benefits,” Whitfield said in a July 8 statement. “That is why I have introduced the Caring for Coal Miners Act to ensure that the hardworking miners who took to the mines day in and day out don't lose the health care that they have rightfully earned.”

The legislation would make miners who are in danger of losing their health care benefits because of Patriot Coal's bankruptcy eligible for UMWA's 1993 Benefit Plan, Whitfield said.

In May, Judge Kathy Surratt-States of the U.S. Bankruptcy Court for the Eastern District of Missouri authorized Patriot to change its collective bargaining agreements with the United Mine Workers of America to modify payments for its retirees' health care and to eliminate retiree health care benefits for currently active employees (25 BBLR 786, 6/6/13).


Uncertainty About VEBA
The bankruptcy court authorized Patriot Coal to transition retirees into a Voluntary Employee Beneficiary Association, but Whitfield said in the statement that “there is uncertainty regarding the solvency and availability of the VEBA due to the United Mine Workers of America (UMWA) recent appeal of the court's ruling.”

The UMWA has asserted that Patriot's parent company, the profitable Peabody Energy, set up Patriot Coal as its failing subsidiary in 2007 so Peabody could avoid paying pension and long-term health care benefits for retirees and their families (24 BBLR 1443, 11/8/12). The union said the Patriot bankruptcy affects more than 22,000 active and retired UMWA members and their dependents, most of whom live in West Virginia, Illinois, Indiana, Kentucky, and Ohio (24 BBLR 1588, 12/6/12).

Whitfield acknowledged that challenges also exist with retirees' pensions. “Protecting the health care benefits is just the first step in what may very well amount to a multifaceted process,” he said.

McKinley and Capito issued statements July 8 indicating that they also plan to work on legislation that would protect retirees' pensions. Capito said she will work “with [her] colleagues, retirees and the UMWA over the coming days on a comprehensive solution that protects pension benefits in addition to health care.”

McKinley said, “After hearing the stories of what these men and their families face if they lose their benefits, it's clear that we must find a solution.” He said he will soon introduce “a separate bill that addresses both health care and pensions.” McKinley said he hopes Patriot and the UMWA “can come to an acceptable agreement” but added, “[W]e need to be ready with legislative solutions should it become necessary.”

H.R. 2627 has been referred to the House Committee on Natural Resources. The committee has not scheduled a hearing on the bill.

Aaron Palash, a spokesman for Patriot Coal Co., declined to comment to BNA July 15.


'An Important Step.'
In a July 10 statement, Cecil E. Roberts, the international president of the United Mine Workers of America, called the introduction of the bill “an important step toward securing the health care benefits of thousands of retirees who are affected by the Patriot Coal bankruptcy.”

“These retired miners did all they were supposed to do to earn their health care benefits, putting their lives and health on the line every single day to power America,” Roberts said. “But now, they find the benefits they were promised, and that they earned, at risk through no fault of their own.” He added, “This isn't about party or politics, this is about doing the right thing for these miners, who gave so much to build our nation. I urge Congress to act, and act quickly, to pass legislation that meets their long term needs.”

Another bill, S. 468, was introduced in the Senate March 6 to deal with the ramifications of the Patriot Coal bankruptcy. Sen. Jay Rockefeller (D-W.Va.) sponsored the bill, titled the Coal Accountability and Retired Employee Act, which would make Patriot's union retirees and other union retirees who lose health care benefits because of an employer's bankruptcy eligible for health benefits under the Coal Act of 1992 (25 BBLR 387, 3/21/13). Rep. Nick Rahall (D-W.Va.) introduced a similar bill (H.R. 980) in the House.

Patriot Coal Corporation and 99 affiliated debtors, including substantially all of Patriot Coal's wholly owned subsidiaries, filed for Chapter 11 protection July 9, 2012, in the U.S. Bankruptcy Court for the Southern District of New York (24 BBLR 892, 7/12/12)


Text of H.R. 2627 is available at /uploadedFiles/Content/News/Legal_and_Business/Bloomberg_Law/Legal_Reports/H.R.-2627-Caring-for-Coal-Miners-Act(2).pdf.

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