Internal Revenue Code:Sec. 9712. Establishment and coverage of 1992 UMWA Benefit Plan
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Location in Internal Revenue Code
TITLE 26 - INTERNAL REVENUE CODE
Subtitle J - Coal Industry Health Benefits
CHAPTER 99 - COAL INDUSTRY HEALTH BENEFITS
Subchapter C - Health Benefits of Certain Miners
PART II - 1992 UMWA BENEFIT PLAN
Statute
Sec. 9712. Establishment and coverage of 1992 UMWA Benefit Plan
(a) Creation of plan
(1) In general
As soon as practicable after the enactment date, the settlors
shall create a separate private plan which shall be known as the
United Mine Workers of America 1992 Benefit Plan. For purposes of
this title, the 1992 UMWA Benefit Plan shall be treated as an
organization exempt from taxation under section 501(a). The
settlors shall be responsible for designing the structure,
administration and terms of the 1992 UMWA Benefit Plan, and for
appointment and removal of the members of the board of trustees.
The board of trustees shall initially consist of five members and
shall thereafter be the number set by the settlors.
(2) Treatment of plan
The 1992 UMWA Benefit Plan shall be -
(A) a plan described in section 302(c)(5) of the Labor
Management Relations Act, 1947 (29 U.S.C. 186(c)(5)),
(B) an employee welfare benefit plan within the meaning of
section 3(1) of the Employee Retirement Income Security Act of
1974 (29 U.S.C. 1002(1)), and
(C) a multiemployer plan within the meaning of section 3(37)
of such Act (29 U.S.C. 1002(37)).
(3) Transfers under other federal statutes.--
(A) In general.--The 1992 UMWA Benefit Plan shall
include any amount transferred to the plan under
subsections (h) and (i) of section 402 of the Surface
Mining Control and Reclamation Act of 1977 (30 U.S.C.
1232).
(B) Use of funds.--Any amount transferred under
subparagraph (A) for any fiscal year shall be used to
provide the health benefits described in subsection (c)
with
respect to any beneficiary for whom no monthly per
beneficiary premium is paid pursuant to paragraph (1)(A)
or (3) of subsection (d).
(4) Special rule for 1993 plan.--
(A) In general.--The plan described in section
402(h)(2)(C) of the Surface Mining Control and
Reclamation Act of 1977 (30 U.S.C. 1232(h)(2)(C)) shall
include any amount transferred to the plan under
subsections (h) and (i) of the Surface Mining Control
and Reclamation Act of 1977 (30 U.S.C. 1232).
(B) Use of funds.--Any amount transferred under
subparagraph (A) for any fiscal year shall be used to
provide the health benefits described in section
402(h)(2)(C)(i) of the Surface Mining Control and
Reclamation Act of 1977 (30 U.S.C. 1232(h)(2)(C)(i)) to
individuals described in section 402(h)(2)(C) of such
Act (30 U.S.C. 1232(h)(2)(C)).
(b) Coverage requirement
(1) In general
The 1992 UMWA Benefit Plan shall only provide health benefits
coverage to any eligible beneficiary who is not eligible for
benefits under the Combined Fund and shall not provide such
coverage to any other individual.
(2) Eligible beneficiary
For purposes of this section, the term ''eligible beneficiary''
means an individual who -
(A) but for the enactment of this chapter, would be eligible
to receive benefits from the 1950 UMWA Benefit Plan or the 1974
UMWA Benefit Plan, based upon age and service earned as of
February 1, 1993; or
(B) with respect to whom coverage is required to be provided
under section 9711, but who does not receive such coverage from
the applicable last signatory operator or any related person,
and any individual who is eligible for benefits by reason of a
relationship to an individual described in subparagraph (A) or
(B). In no event shall the 1992 UMWA Benefit Plan provide health
benefits coverage to any eligible beneficiary who is a coal
industry retiree who retired from the coal industry after
September 30, 1994, or any beneficiary of such individual.
(c) Health benefits
(1) In general
The 1992 UMWA Benefit Plan shall provide health care benefits
coverage to each eligible beneficiary which is substantially the
same as (and subject to all the limitations of) coverage provided
under the 1950 UMWA Benefit Plan and the 1974 UMWA Benefit Plan
as of January 1, 1992.
(2) Managed care
The 1992 UMWA Benefit Plan shall develop managed care and cost
containment rules which shall be applicable to the payment of
benefits under this subsection. Application of such rules shall
not cause the plan to be treated as failing to meet the
requirements of this subsection. Such rules shall preserve
freedom of choice while reinforcing managed care network use by
allowing a point of service decision as to whether a network
medical provider will be used. Major elements of such rules may
include, but are not limited to, elements described in paragraph
(3).
(3) Major elements of rules
Elements described in this paragraph are -
(A) implementing formulary for drugs and subjecting the
prescription program to a rigorous review of appropriate use,
(B) obtaining a unit price discount in exchange for patient
volume and preferred provider status with the amount of the
potential discount varying by geographic region,
(C) limiting benefit payments to physicians to the allowable
charge under title XVIII of the Social Security Act, while
protecting beneficiaries from balance billing by providers,
(D) utilizing, in the claims payment function
''appropriateness of service'' protocols under title XVIII of
the Social Security Act if more stringent,
(E) creating mandatory utilization review (UR) procedures,
but placing the responsibility to follow such procedures on the
physician or hospital, not the beneficiaries,
(F) selecting the most efficient physicians and
state-of-the-art utilization management techniques, including
ambulatory care techniques, for medical services delivered by
the managed care network, and
(G) utilizing a managed care network provider system, as
practiced in the health care industry, at the time medical
services are needed (point-of-service) in order to receive
maximum benefits available under this subsection.
(4) Last signatory operators
The board of trustees of the 1992 UMWA Benefit Plan shall
permit any last signatory operator required to maintain an
individual employer plan under section 9711 to utilize the
managed care and cost containment rules and programs developed
under this subsection if the operator elects to do so.
(5) Standards of quality
Any managed care system or cost containment adopted by the
board of trustees of the 1992 UMWA Benefit Plan or by a last
signatory operator may not be implemented unless it is approved
by, and meets the standards of quality adopted by, a medical peer
review panel, which has been established -
(A) by the settlors, or
(B) by the United Mine Workers of America and a last
signatory operator or group of operators.
Standards of quality shall include accessibility to medical care,
taking into account that accessibility requirements may differ
depending on the nature of the medical need.
(d) Guarantee of benefits
(1) In general.--All 1988 last signatory operators shall
be responsible for financing the benefits described in
subsection (c) by meeting the following requirements in
accordance with the contribution requirements established in the
1992 UMWA Benefit Plan:
(A) The payment of a monthly per beneficiary
premium by each 1988 last signatory operator for each
eligible beneficiary of such operator who is described
in subsection (b)(2) and who is receiving benefits under
the 1992 UMWA Benefit Plan.
(B) The provision of a security (in the form of a
bond, letter of credit, or cash escrow) in an amount
equal to a portion of the projected future cost to the
1992 UMWA Benefit Plan of providing health benefits for
eligible and potentially eligible beneficiaries
attributable to the 1988 last signatory operator.
(C) If the amounts transferred under subsection
(a)(3) are less than the amounts required to be
transferred to the 1992 UMWA Benefit Plan under
subsections (h) and (i) of section 402 of the Surface
Mining Control and Reclamation Act of 1977 (30 U.S.C.
1232), the payment of an additional backstop premium by
each 1988 last signatory operator which is equal to such
operator's share of the amounts required to be so
transferred but which were not so transferred,
determined on the basis of the number of eligible and
potentially eligible beneficiaries attributable to the
operator.
(2) Adjustments
The 1992 UMWA Benefit Plan shall provide for -
(A) annual adjustments of the per beneficiary premium to
cover changes in the cost of providing benefits to eligible
beneficiaries, and
(B) adjustments as necessary to the annual backstop premium
to reflect changes in the cost of providing benefits to
eligible beneficiaries for whom per beneficiary premiums are
not paid.
(3) Additional liability
Any last signatory operator who is not a 1988 last signatory
operator shall pay the monthly per beneficiary premium under
paragraph (1)(A) for each eligible beneficiary described in such
paragraph attributable to that operator.
(4) Joint and several liability
A 1988 last signatory operator or last signatory operator
described in paragraph (3), and any related person to any such
operator, shall be jointly and severally liable with such
operator for any amount required to be paid by such operator
under this section. The provisions of section
9711(c)(2) shall apply to any last signatory operator described in such
section (without regard to whether security is provided under such
section, a payment is made under section 9704(j), or both) and if
security meeting the requirements of section 9711(c)(3) is provided, the
common parent described in section 9711(c)(2)(B) shall be exclusively
responsible for any liability for premiums under this section which, but
for this sentence, would be required to be paid by the last signatory
operator or any related person.
(5) Deductibility
Any premium required by this section shall be deductible
without regard to any limitation on deductibility based on the
prefunding of health benefits.
(6) 1988 last signatory operator
For purposes of this section, the term ''1988 last signatory
operator'' means a last signatory operator which is a 1988
agreement operator.
Sources
(Added Pub. L. 102-486, title XIX, Sec. 19143(a), Oct. 24, 1992,
106 Stat. 3053.)
Miscellaneous
AMENDMENTS
2006 - Tax Relief and Health Care Act of 2006 (P.L. 109-432)
Section 212(b) 1992 UMWA Benefit and Other Plans.--
(1) Transfers to plans.--Section 9712(a) of the Internal
Revenue Code of 1986 (relating to the establishment and coverage
of the 1992 UMWA Benefit Plan) is amended by adding at the end
the following:
``(3) Transfers under other federal statutes.--
``(A) In general.--The 1992 UMWA Benefit Plan shall
include any amount transferred to the plan under
subsections (h) and (i) of section 402 of the Surface
Mining Control and Reclamation Act of 1977 (30 U.S.C.
1232).
``(B) Use of funds.--Any amount transferred under
subparagraph (A) for any fiscal year shall be used to
provide the health benefits described in subsection (c)
with
respect to any beneficiary for whom no monthly per
beneficiary premium is paid pursuant to paragraph (1)(A)
or (3) of subsection (d).
``(4) Special rule for 1993 plan.--
``(A) In general.--The plan described in section
402(h)(2)(C) of the Surface Mining Control and
Reclamation Act of 1977 (30 U.S.C. 1232(h)(2)(C)) shall
include any amount transferred to the plan under
subsections (h) and (i) of the Surface Mining Control
and Reclamation Act of 1977 (30 U.S.C. 1232).
``(B) Use of funds.--Any amount transferred under
subparagraph (A) for any fiscal year shall be used to
provide the health benefits described in section
402(h)(2)(C)(i) of the Surface Mining Control and
Reclamation Act of 1977 (30 U.S.C. 1232(h)(2)(C)(i)) to
individuals described in section 402(h)(2)(C) of such
Act (30 U.S.C. 1232(h)(2)(C)).''.
(2) Premium adjustments.--
(A) In general.--Section 9712(d)(1) <<NOTE: 26 USC
9712.>> of such Code (relating to guarantee of benefits)
is amended to read as follows:
``(1) In general.--All 1988 last signatory operators shall
be responsible for financing the benefits described in
subsection (c) by meeting the following requirements in
accordance with the contribution requirements established in the
1992 UMWA Benefit Plan:
``(A) The payment of a monthly per beneficiary
premium by each 1988 last signatory operator for each
eligible beneficiary of such operator who is described
in subsection (b)(2) and who is receiving benefits under
the 1992 UMWA Benefit Plan.
``(B) The provision of a security (in the form of a
bond, letter of credit, or cash escrow) in an amount
equal to a portion of the projected future cost to the
1992 UMWA Benefit Plan of providing health benefits for
eligible and potentially eligible beneficiaries
attributable to the 1988 last signatory operator.
``(C) If the amounts transferred under subsection
(a)(3) are less than the amounts required to be
transferred to the 1992 UMWA Benefit Plan under
subsections (h) and (i) of section 402 of the Surface
Mining Control and Reclamation Act of 1977 (30 U.S.C.
1232), the payment of an additional backstop premium by
each 1988 last signatory operator which is equal to such
operator's share of the amounts required to be so
transferred but which were not so transferred,
determined on the basis of the number of eligible and
potentially eligible beneficiaries attributable to the
operator.''.
(B) Conforming amendments.--Section 9712(d) of such
Code is amended--
(i) in paragraph (2)(B), by striking
``prefunding'' and inserting ``backstop'', and
(ii) in paragraph (3), by striking ``paragraph
(1)(B)'' and inserting ``paragraph (1)(A)''.
2006 - Tax Relief and Health Care Act of 2006 (P.L. 109-432)
Subtitle B--Coal Industry Retiree Health Benefit Act
SEC. 211. CERTAIN RELATED PERSONS AND SUCCESSORS IN INTEREST RELIEVED OF
LIABILITY IF PREMIUMS PREPAID.
(c) <<NOTE: Applicability.>> 1992 UMWA Benefit Plan.--Section
9712(d)(4) of the Internal Revenue Code of 1986 <<NOTE: 26 USC
9712.>> (relating to joint and several liability) is amended by adding
at the end the following new sentence: ``The provisions of section
9711(c)(2) shall apply to any last signatory operator described in such
section (without regard to whether security is provided under such
section, a payment is made under section 9704(j), or both) and if
security meeting the requirements of section 9711(c)(3) is provided, the
common parent described in section 9711(c)(2)(B) shall be exclusively
responsible for any liability for premiums under this section which, but
for this sentence, would be required to be paid by the last signatory
operator or any related person.''.
EFFECTIVE DATE OF 2006 AMENDMENT
2006 - Tax Relief and Health Care Act of 2006 (P.L. 109-432)
Section 212(b)(1)(C) <<NOTE: 26 USC 9712 note.>> Effective date.--The
amendments made by this paragraph shall apply to fiscal years
beginning on or after October 1, 2010.
References in Text
REFERENCES IN TEXT
The Social Security Act, referred to in subsec. (c)(3)(C), (D),
is act Aug. 14, 1935, ch. 531, 49 Stat. 620, as amended. Title
XVIII of the Act is classified generally to subchapter XVIII (Sec.
1395 et seq.) of chapter 7 of Title 42, The Public Health and
Welfare. For complete classification of this Act to the Code, see
section 1305 of Title 42 and Tables.
References
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 9701, 9711 of this title.
