Brief Chronology of the
UMWA Health and Retirement Funds
and the History of U.S. Government Involvement
The UMWA Health and Retirement Funds “is as much a creature of government as it is
of collective bargaining. There is a line running from the original Boone Report to the
present system. In a way, the original Krug-Lewis agreement predisposed, if not
predetermined, the system that evolved.” Coal Commission Report, 1990.1

Early 1900s

Prior to the creation of the UMWA Health and Retirement Funds, there
was no pension plan for retired coal miners and medical care in the
nation's coal field communities consisted of a pre-paid system based on
deductions from the miners' paychecks. Under this system, coal companies
deducted money from the miners' pay and hired doctors to provide
medical services to the miners. Over time, the miners came to view the
company doctor system as wasteful and harmful to their interests.

1935

President Franklin Roosevelt appoints a federal Interdepartmental
Committee to Coordinate Health and Welfare Activities. He named as
chairman of the committee Josephine Roche, who later became neutral
trustee and executive director of the UMWA Funds. One of the major
activities of the committee was to convene a National Health Conference,
at which the UMWA called for the establishment of “group medicine and
group hospitalization” in coal mining communities.

1938

The UMWA, through the Good Will Fund of Boston and the Twentieth
Century Fund of New York, commissioned a report on medical conditions
in the coal fields. The study by the Bureau of Cooperative Medicine2
concluded that there was a pressing need for medical care reform in the
coal fields.

1946

When the National Bituminous Wage Conference convened in early 1946,
a health and welfare fund for miners was the union's top priority. The
operators rejected the proposal and miners walked off the job on April 1,
1946. Negotiations under the auspices of the U.S. Department of Labor
continued sporadically through April. On May 10, 1946, President Truman
summoned UMWA president John L. Lewis and the coal operators to the

1

Coal Commission Report: A Report to the Secretary of Labor and the American People, The Secretary of Labor’s
Advisory Commission on United Mine Workers of America Retiree Health Benefits, November 1990.
2

Medical Care in Selected Areas of the Appalachian Bituminous Coal Fields, The Bureau of Cooperative
Medicine, March 1, 1939.

 White House. The stalemate appeared to break when the White House
announced an agreement in principle on a health and welfare fund.
Despite the White House announcement, the coal operators still refused to
agree to the creation of a medical and pension fund. Another conference at
the White House failed to forge an agreement and the negotiations again
collapsed.
Faced with the prospect of a long strike that could hamper post-war
economic recovery, President Truman issued an Executive Order3
directing the Secretary of the Interior to take possession of all bituminous
coal mines in the United States and to negotiate with the union
“appropriate changes in the terms and conditions of employment.” The
Executive Order also provided that “All Federal Agencies are directed to
cooperate with the Secretary of the Interior to the fullest extent possible in
carrying out the purposes of this order.” Secretary of the Interior Julius
Krug seized the mines the next day and ordered the miners to return to
work. The miners refused, and negotiations continued, first at the Interior
Department and then at the White House, with President Truman
participating in several conferences.
On May 29, 1946 the historic Krug Lewis agreement was announced and
the strike ended. The agreement was signed in the White House with
President Truman presiding. It created a welfare and retirement fund to
make payments to miners and their dependents and survivors in cases of
sickness, permanent disability, death or retirement, and other welfare
purposes determined by the trustees. The fund was to be managed by three
trustees, one to be appointed by the federal government, one by the
UMWA and the third to be chosen by the other two. Financing for the new
fund was to derive from a royalty of 5 cents per ton of coal produced.
The Krug Lewis agreement also created a separate medical and hospital
fund to be managed by trustees appointed by the UMWA. The purpose of
the fund was to provide for medical, hospital, and related services for the
miners and their dependents.
The Krug Lewis agreement also committed the federal government to
undertake “a comprehensive survey and study of the hospital and medical
facilities, medical treatment, sanitary and housing conditions in coal
mining areas.” The expressed purpose was to determine improvements

3

Executive Order 9728, Authorizing the Secretary of the Interior to Take Possession of and to Operate Certain
Coal Mines, May 21, 1946.
2

 were necessary to bring coal field communities in conformity with
“recognized American standards.”
1947

To conduct the study, the Secretary of the Interior chose Rear Admiral
Joel T. Boone of the U.S. Navy Medical Corps. Government medical
specialists spent nearly a year exploring the existing medical care system
in the nation's coal fields. Their report, A Medical Survey of the
Bituminous Coal Industry4, found that in coal field communities
“provisions range from excellent, on a par with America's most
progressive communities, to very poor, their tolerance a disgrace to a
nation to which the world looks for pattern and guidance.” The survey
team discovered that “three-fourths of the hospitals are inadequate with
regard to one or more of the following: surgical rooms, delivery rooms,
labor rooms, nurseries and x-ray facilities.” The study concluded that “the
present practice of medicine in the coal fields on a contract basis cannot be
supported. They are synonymous with many abuses. They are
undesirable and in many instances deplorable.”
Thus the Boone report not only confirmed earlier reports of conditions in
the coal mining communities, but also established a strong federal
government interest in correcting long-standing inadequacies in medical
care delivery. Perhaps most important, it provided a road map for the
newly created UMWA Fund to begin the process of reform.

1947

The first checks from the UMWA Fund are issued to the widows of the
miners who died in the Centralia, Illinois mine disaster5. The checks are
signed by John L. Lewis and Captain N.H. Collisson, a U.S. Navy captain
who was a trustee appointed by the U.S. government.

1947

Nation’s bituminous coal mines returned to private owners. UMWA and
coal industry begin two-year struggle over direction of the Fund. After a
seven month stalemate, the neutral trustee resigns.

1948

Miners strike to force activation of UMWA pension plan. Court holds
UMWA in contempt because miners refuse to return to work. The
Speaker of the U.S. House of Representatives, Joseph Martin, asked Fund
trustees to meet with him. Speaker Martin proposes Senator Styles
Bridges of New Hampshire as the neutral trustee. Senator Bridges,
pointing out that nearly two years had elapsed since the Krug-Lewis

4

A Medical Survey of the Bituminous Coal Industry, Report of the Coal Mines Administrator, 1947.

5

The Centralia No. 5 mine exploded on March 25, 1947, killing 111 coal miners. The Bureau of Mines report on
the disaster found that “the dusty conditions of the mine and blasting procedures are contrary to the State mining law
and to the federal Mine safety Code under which the mine was being operated by the Coal Mines Administrator.”
3

 Agreement, voted with UMWA trustee John L. Lewis to activate the
pensions. The first UMWA pension check is presented to Horace
Ainscough, a retired miner from Rock Springs, Wyoming.
1950

Coal operators create the Bituminous Coal Operators’ Association
(BCOA) to represent the coal industry in bargaining with the UMWA.

1950s

UMWA Fund recruits doctors from the U.S. Public Health Service to
administer the medical care program.

1954

A special section 404 (c) is added by Congress to the IRS Code to
“grandfather” the existing UMWA Health and Retirement Fund to ensure
the deductibility of employer contributions and favorable tax treatment for
employees and retirees.

1955

Recognizing the need for modern hospital and clinic facilities, the UMWA
Funds constructed ten hospitals in Kentucky, Virginia and West Virginia.
The hospitals, known as Miners Memorial Hospitals, provided intern and
residency programs and training for professional and practical nurses.
Thus, because of the Funds, young doctors were drawn to areas of the
country that were sorely lacking in medical professionals.

1963

Kennedy Administration assists UMWA Funds in selling miners hospital
chain to Appalachian Regional Hospitals, providing federal funds to the
buyers. Although they were no longer owned and operated by the UMWA
Funds, the hospitals continued to serve miners and other residents of coal
field communities and contributed to a significant improvement in overall
medical care.

1971

Federal courts add nearly 20,000 primary beneficiaries to Funds pension
and health programs in Blankenship v. Boyle and Kiser v. Huge.

1971

The 1971 negotiations over the National Bituminous Coal Wage
Agreement (NBCWA) take place during a period of federal wage and
price controls imposed by the Nixon administration. The 1971 NBCWA
increased labor costs by 15%, driven in part by the doubling of
contributions to the UMWA Funds. The U.S. government approved the
contract but did not allow an increase in the price of coal to consumers to
pass through the increase in the contribution rates.

1974

Congress enacts the Employee Retirement Income Security Act (ERISA).
ERISA retained and amended Section 404(c) to retain the grandfathering
of the existing UMWA Health and Retirement Fund. To comply with
ERISA, the UMWA and BCOA create separate pension and benefit plans,
4

 creating the UMWA 1950 Pension Plan, the UMWA 1950 Benefit Plan,
the UMWA 1974 Pension Plan and the UMWA 1974 Benefit Plan.
1977-78

UMWA and BCOA bargain for a successor NBCWA agreement. BCOA
proposes individual company health plans to replace the UMWA Funds.
UMWA engages in 111 day nationwide strike. Federal government
intervenes, attempts to mediate the dispute and obtains Taft-Hartley
injunction. Under the NBCWA of 1978, responsibility for health care
benefits for active workers and post-1975 retirees shifts from the UMWA
Funds to individual companies. UMWA 1974 Benefit Plan is retained to
serve as an orphan safety net to provide lifetime retiree health benefits to
retirees when their employers go out of business.

1978

President Carter appoints President’s Coal Commission to examine the
issues that led to the 1978 nationwide miners’ strike, including “health,
safety and living conditions in the Nation’s coal fields.” The Coal
Commission found that medical care in the coal field communities had
greatly improved, not only for miners but for the entire community, as a
result of the UMWA Funds. “Conditions since the Boone Report have
changed dramatically, largely because of the miners and their Union--but
also because of the Federal Government, State, and coal companies.” The
Commission concluded that “both union and non-union miners have
gained better health care from the systems developed for the UMWA.”6

1980

Congress enacts the Multiemployer Pension Plan Amendments Act
(MPPAA). MPPAA includes provisions exempting the 1950 and 1974
Pension Plans from various withdrawal liability provisions, including the
20-year cap on amortized payments and the 50% cap on liquidation claims
and otherwise providing different treatment to those Plans.

1981

UMWA Funds enters into an agreement with U.S. Department of Labor to
process DOL Black Lung medical claims.

1980s

Royal-Nobel federal court cases7 hold that UMWA retiree health benefits
are for life, but an employer’s obligations to pay for that promise expires
with the contract. In the Royal II and Nobel decisions, courts hold that
lifetime promise rests at the UMWA Funds. Companies begin attempts to
dump their liabilities onto the UMWA Funds.

6

The American Coal Miner: A Report on Community and Living Conditions in the Coalfields, President’s
Commission on Coal, 1980.
7

District 29, UMWA v. Royal Coal Co., 768 F.2d 588, 590 (4th Cir. 1985) (“Royal I”), District 29, UMWA v. 1974
Benefit Plan, 826 F.2d 280, 282 (4th Cir. 1987), cert. denied, 485 U.S. 935 (1988) (“Royal II”), UMWA v. Nobel,
720 F. Supp. 1169, 1180 (W.D. Pa. 1989), affirmed without opinion, 902 F.2d 1558 (3d Cir.), cert. denied, 498 U.S.
957 (1990).
5

 1984

Retirement Equity Act exempts the 1950 Pension Plan from requirements
relating to Joint and Survivor Annuities and Preretirement Survivor
Annuities.

1988-1989

Pittston Strike–Pittston refuses to participate in UMWA Funds and
terminates health care for 2,000 retirees and widows. Pittston claims that
under Royal-Noble decisions, Pittston retirees are responsibility of
UMWA Funds. After working for over a year without a contract, Pittston
miners strike in April 1989. Thousands of UMWA supporters engage in
peaceful civil disobedience to protest Pittston’s cutoff of health care, and
more than 4,000 protesters are arrested. UMWA is fined $64 million by
state courts during the strike.

1989

U.S. Secretary of Labor Elizabeth Dole visits coal fields to investigate the
Pittston strike, appoints “super-mediator” Bill Usery, who mediates an end
to the strike on New Year’s Eve. Health benefits are restored and UMWA
miners return to work.

1989

MPPAA is amended to add a special withdrawal liability provision
applicable only to the 1950 Pension Plan.

1990

Secretary of Labor Elizabeth Dole appoints a federal commission (Coal
Commission) to examine the provision of retiree health care in the coal
industry.

1990

Coal Commission issues findings and recommendations–“Retired coal
miners have legitimate expectations of retiree health care benefits for life;
that is what they were promised during their working years and that is
how they planned their retirement years. That commitment should be
honored.”8

1990

UMWA Funds enters demonstration project with Medicare under which
the Funds is paid a per capita fee for Part B services, placing the Funds at
risk for providing benefits within the level of these payments.

1991

UMWA holds retiree meetings throughout the coal fields to rally support
for federal legislation. Thousands of UMWA retirees pledge support for
federal legislation.

8

Coal Commission Report: A Report to the Secretary of Labor and the American People, The Secretary of Labor’s
Advisory Commission on United Mine Workers of America Retiree Health Benefits, November 1990.
6

 1991

Congress holds hearings on Coal Commission recommendations. UMWA
testifies that Congress must step in to keep the promise of lifetime retiree
health benefits.

1992

Coal Act enacted by Congress and signed by President Bush. Pursuant to
the Coal Act, companies still in business are required to maintain benefit
plans for retired miners covered by the Act. The Coal Act merged the
UMWA 1950 Benefit Plan and the UMWA 1974 Benefit Plan into a new
Combined benefit Fund (CBF). The Act also mandated the transfer of
$210 million from UMWA 1950 Pension Plan to the new Combined
Benefit Fund. The Coal Act also established a new UMWA 1992 Benefit
Plan to serve as an orphan safety net for retirees whose employers go out
of business.

1990s

Coal companies mount continuing legal assault on Coal Act, “Reachback
companies” form political coalition to repeal or amend the Coal Act.
Companies mount more than 70 constitutional challenges and repeatedly
seek to relieve themselves of liability through legislation.

1994

U.S. Supreme Court unanimously overturns $64 million fines against
UMWA in Pittston strike.

1995

AML interest becomes available to fund Coal Act health benefits.
UMWA Funds and the U.S. Office of Surface Mining and Enforcement
(OSM) enter into a memorandum of understanding on the Coal Act
transfers.

1996

Alabama federal court issues NCA v. Chater ruling9, which reduces
premiums paid to the CBF by coal companies by about 10%. Over the
long run, this decision will cost the CBF hundreds of millions of dollars.

1997

UMWA Funds demonstration risk agreement with Medicare expands to
include Part A services.

1998

Supreme Court rules in Eastern Enterprises10, relieving some companies
of Coal Act retiree obligations. Obligations that Congress intended for the
companies to pay must now be paid from interest earned by the AML
Fund.

9
10

National Coal Association v. Chater, 81 F.3d 1077 (11th Cir. 1996).
Eastern Enterprises. v. Apfel, 524 U.S. 498 (1998).
7

 1999

Alabama federal court orders UMWA Combined Benefit Fund to rebate
$40 million to coal operators.

1999

Congress appropriates $68 million to shore up Combined Benefit Fund.

2000

Clinton Administration proposes $346 million Coal Act legislation, to be
funded out of general revenues.

2000

Congressman Nick Rahall introduces CARE 21, a bipartisan bill to shore
up the financing of the CBF.

2000

UMWA Rally in Washington, more than 10,000 UMWA supporters
gather on the Capitol steps to Save the Coal Act.

2000

Congress appropriates up to $98 million to cure deficits in CBF.

2000

LTV Steel files for bankruptcy.

2001

UMWA Funds demonstration agreement with Medicare again expanded to
include 3-year Medicare prescription drug study; Funds to receive
reimbursement for 27% of its Medicare prescription drug costs.

2001

Bethlehem Steel files for bankruptcy.

2002

Bankruptcy Court relieves LTV of its retiree health obligations. About
500 retired coal miners and surviving spouses are transferred from LTV’s
health plan to the UMWA Funds. In addition, LTV ceases paying Coal
Act premiums that support nearly 3,000 LTV retirees receiving benefits
from the CBF. While the CBF pursues and collects some money in
bankruptcy claims, most of the future costs of the LTV retirees in the CBF
shifts to the AML fund interest.

2002

General Accounting Office (GAO) issues report, reinforcing need for
additional Coal Act financing.11

2002

House of Representatives enacts CARE 21, Senate adjourns without
taking up the bill.

2002

National Steel files for bankruptcy.

11

Retired Coal Miners Health Benefit Funds: Financial Challenges Continue, U.S. General Accounting Office,
April 2002.

8

 2002

Horizon Natural Resources files for bankruptcy.

2003

Supreme Court decision in Barnhart v. Peabody requires companies to
continue paying for their retirees in the CBF, regardless of when initial
assignments are made.

2003

Bankruptcy Court approves Bethlehem’s motion to terminate benefits for
3,300 retired coal miners, who are transferred from Bethlehem’s health
plan to the UMWA Funds. In addition, Bethlehem ceases paying Coal Act
premiums that support nearly 1,500 Bethlehem retirees receiving benefits
from the CBF. While the CBF pursues and collects some money in
bankruptcy claims, most of the future costs of the Bethlehem retirees in
the CBF shifts to the AML fund interest.

2003

Congress appropriates $34 million to shore up CBF.

2003

Supreme Court denies cert. to A.T. Massey and Berwind Corp. in cases
where the companies sought to evade liability by claiming they were
“substantially identical” to Eastern Enterprises. The courts rejected those
arguments and held that they must continue to pay for their retirees.

2003

Bankruptcy Court relieves National Steel of its retiree health obligations.
About 750 retirees and their surviving spouses are transferred from
National Steel’s health plan to the UMWA Funds. In addition, National
Steel ceases paying Coal Act premiums that support nearly 570 national
Steel retirees receiving benefits from the CBF. The CBF pursues and
collects significant money in bankruptcy claims from a solvent related
party, so to date the costs of the National Steel retirees in the CBF have
not been shifted to the AML fund interest.

2004

UMWA Funds commissions a study by Mercer Consulting that found the
Funds population was older than and had a significantly higher burden of
illness (35% higher) than a geographically comparable Medicare
population. When adjusted for these factors, the Funds health
expenditures were 7% lower than Medicare.12

2004

Bush Administration announces extension and expansion of Funds
Medicare prescription drug demonstration project. UMWA Funds to
receive reimbursement for 60% of its Medicare prescription drug costs.

2004

Bankruptcy court relieves Horizon of its obligation to provide retiree
health care to some 4,500 UMWA retirees and surviving spouses. The

12

Health Status Assessment Project, Mercer Human Resource Consulting, July 2004.
9

 retired miners and their surviving spouses are transferred to the UMWA
Funds.
2006

Congress enacts the Pension Protection Act (PPA). PPA differentiated the
1974 Pension Plan from other multiemployer plans by placing the
responsibility for designing a Funding Improvement Plan or Rehabilitation
Plan on the UMWA and BCOA rather than on the Board of Trustees.

2006

Congress enacts Tax Relief and Health Care Act of 2006, which contained
Coal Act/AML provisions that the UMWA had advocated for several
years. President Bush signed the bill into law on December 20, 2006. The
legislation expanded the Coal Act to provide financing to cure deficits in
the Combined Benefit Fund and to provide support for orphan retirees in
both the UMWA 1992 Plan and the UMWA 1993 Plan. The UMWA
Funds now has access to AML interest, plus a permanent appropriation of
up to $490 million per year from the Federal Treasury.

2007

UMWA 1950 Pension Plan merged into UMWA 1974 Pension Plan.

2008-2009

Stock market plummets in response to Wall Street shenanigans, leading to
the worst recession since the Great Depression. Pension plans are
devastated. The UMWA 1974 Pension Plan goes from being about 92%
funded to about 74% funded. Federal government bails out banks
responsible for the financial crisis.

2009

UMWA Funds commissions a second study by Mercer Consulting that
found the Funds population was older than and had a significantly higher
burden of illness (32% higher) than a geographically comparable
Medicare population. When adjusted for these factors, the Funds health
expenditures were 12% lower than Medicare.13

2010

Bills are introduced in the U.S. House of Representatives and the U.S.
Senate (CARE Act) to include the UMWA 1974 Pension Plan in the 2006
Coal Act transfers. The bills would allow the 1974 Pension Plan access to
the $490 million permanent appropriation, after all existing Coal Act
health plan and state transfers are met.

2010

1974 Pension Plan commissions an analysis by Mercer that showed about
half of the retirees in the Plan and 40% of the accrued liability derived
from defunct employers that have gone out of business.

13

Health Status Assessment Project, Mercer, August 2009.
10

 2010

The 1974 Pension Plan is certified as being in “Seriously Endangered”
status under the PPA.

2012

Patriot Coal, the second largest contributor to the UMWA Funds, files for
bankruptcy.

2013

Revised CARE Act bills are introduced in the U.S. House of
Representatives and the U.S. Senate to include the UMWA 1974 Pension
Plan in the 2006 Coal Act transfers. The bills would allow the 1974
Pension Plan access to the $490 million permanent appropriation, after all
existing health plan and state transfers are met. In addition, the bills
would provide Coal Act protection to retirees of companies that shed their
retiree health obligations in bankruptcy.

2013

Bankruptcy court relieves Patriot Coal of the obligation to provide health
benefits to over 11,000 retired miners and surviving spouses. The retiree
health obligations are shifted by the bankruptcy court to the Patriot
Retirees Voluntary Employees’ Beneficiary Association (VEBA). The
bankruptcy court provides $15 million financing for an estimated retiree
health liability is $1.6 billion.
Patriot is also relieved by the bankruptcy court of its obligations to all
UMWA funds (including the 1993 Benefit Plan) except the 1974 Pension
Plan. Primarily as a result of Patriot’s withdrawal, the 1993 Benefit Plan
is facing a projected deficit of about $18 million by the end of 2016,
jeopardizing the health benefits of about 3,300 orphan retirees not covered
by the Coal Act.

2013

UMWA reaches settlement agreements with Patriot Coal, Peabody Energy
and Arch Coal to provide nearly $400 million in additional financing to
the Patriot VEBA through 2017.

2013

H.R. 2918 is introduced in the U.S. House of Representatives. This
legislation, which has substantial bi-partisan support, is similar to the
CARE Act with respect to the 1974 Pension Plan but represents an
alternative method of providing protection for the Patriot retirees. H.R.
2918 has 45 Republican co-sponsors and 37 Democratic co-sponsors.

2014

Senate Finance Committee Chairman Ron Wyden and Ranking Member
Orrin Hatch announce agreement to work together to solve the Coal Act
problems related to the Patriot retirees and the 1974 Pension Plan.

2014

1974 Pension Plan is projected to enter “Critical Status” under the PPA.

11

 2014

H.R. 2918 is considered as part of the 2015 Continuing Resolution enacted
in the lame duck session of Congress in December, but was ultimately
dropped before final passage.

2015

A provision based on H.R. 2918 is included in the President’s 2016
Budget proposal released by the White House February 2, 2015.

12