Frequently Asked Questions
Who is eligible for the Election to Use Interest for Benefit Payments?
Available to the trustees of the UMWA Combined Benefit Fund to manage fund liquidity and reduce employer premium burdens.
How does the Election to Use Interest for Benefit Payments work?
Trustees may elect to use interest earned by the Combined Fund to pay for health benefits, which can offset the total premium payments required to be paid into the fund.
What law authorizes the Election to Use Interest for Benefit Payments?
The Election to Use Interest for Benefit Payments is authorized under IRC §9703 of the Internal Revenue Code (Title 26, United States Code).
Statutory Text — IRC §9703
Source: Internal Revenue Code, Title 26, United States Code
§ 9703. Plan benefits(a) In generalEach eligible beneficiary of the Combined Fund shall receive—(1) health benefits described in subsection (b), and
(2) in the case of an eligible beneficiary described in subsection (f)(1), death benefits coverage described in subsection (c).
(b) Health benefits(1) In generalThe trustees of the Combined Fund shall provide health care benefits to each eligible beneficiary by enrolling the beneficiary in a health care services plan which undertakes to provide such benefits on a prepaid risk basis. The trustees shall utilize all available plan resources to ensure that, consistent with paragraph (2), coverage under the managed care system shall to the maximum extent feasible be substantially the same as (and subject to the same limitations of) coverage provided under the 1950 UMWA Benefit Plan and the 1974 UMWA Benefit Plan as of January 1, 1992.
(2) Plan payment rates(A) In generalThe trustees of the Combined Fund shall negotiate payment rates with the health care services plans described in paragraph (1) for each plan year which are in amounts which—(i) vary as necessary to ensure that beneficiaries in different geographic areas have access to a uniform level of health benefits; and
(ii) result in aggregate payments for such plan year from the Combined Fund which do not exceed the total premium payments required to be paid to the Combined Fund under section 9704(a) for the plan year, adjusted as provided in subparagraphs (B) and (C).
(B) ReductionsThe amount determined under subparagraph (A)(ii) for any plan year shall be reduced—(i) by the aggregate death benefit premiums determined under section 9704(c) for the plan year, and
(ii) by the amount reserved for plan administration under subsection (d).
(C) IncreasesThe amount determined under subparagraph (A)(ii) shall be increased—(i) by any reduction in the total premium payments required to be paid under section 9704(a) by reason of transfers described in section 9705,
(ii) by any carryover to the plan year from any preceding plan year which—(I) is derived from amounts described in section 9704(e)(3)(B)(i), and
(II) the trustees elect to use to pay benefits for the current plan year, and
(iii) any interest earned by the Combined Fund which the trustees elect to use to pay benefits for the current plan year.
(3) Qualified providersThe trustees of the Combined Fund shall not enter into an agreement under paragraph (1) with any provider of services which is of a type which is required to be certified by the Secretary of Health and Human Services when providing services under title XVIII of the Social Security Act unless the provider is so certified.
(4) Effective dateBenefits shall be provided under paragraph (1) on and after February 1, 1993.
Showing first 3,000 characters of full section text.