Eligibility
Available to assigned operators who were not 1988 agreement operators, ceased coal production by July 1, 2005, and were members of a publicly traded controlled group as of July 20, 1992.
Frequently Asked Questions
Who is eligible for the Prepayment of Premium Liability for Controlled Groups?
Available to assigned operators who were not 1988 agreement operators, ceased coal production by July 1, 2005, and were members of a publicly traded controlled group as of July 20, 1992.
How does the Prepayment of Premium Liability for Controlled Groups work?
Certain assigned operators or related persons can elect to make a lump-sum prepayment of the present value of their total future premium liability, potentially shifting the sole future liability to a common parent corporation.
What law authorizes the Prepayment of Premium Liability for Controlled Groups?
The Prepayment of Premium Liability for Controlled Groups is authorized under IRC §9704(j) of the Internal Revenue Code (Title 26, United States Code).
Statutory Text — IRC §9704
Source: Internal Revenue Code, Title 26, United States Code
§ 9704. Liability of assigned operators(a) Annual premiumsEach assigned operator shall pay to the Combined Fund for each plan year beginning on or after February 1, 1993, an annual premium equal to the sum of the following three premiums—(1) the health benefit premium determined under subsection (b) for such plan year, plus
(2) the death benefit premium determined under subsection (c) for such plan year, plus
(3) the unassigned beneficiaries premium determined under subsection (d) for such plan year.
Any related person with respect to an assigned operator shall be jointly and severally liable for any premium required to be paid by such operator.
(b) Health benefit premiumFor purposes of this chapter—(1) In generalThe health benefit premium for any plan year for any assigned operator shall be an amount equal to the product of the per beneficiary premium for the plan year multiplied by the number of eligible beneficiaries assigned to such operator under section 9706.
(2) Per beneficiary premiumThe Commissioner of Social Security shall calculate a per beneficiary premium for each plan year beginning on or after February 1, 1993, which is equal to the sum of—(A) the amount determined by dividing—(i) the aggregate amount of payments from the 1950 UMWA Benefit Plan and the 1974 UMWA Benefit Plan for health benefits (less reimbursements but including administrative costs) for the plan year beginning July 1, 1991, for all individuals covered under such plans for such plan year, by
(ii) the number of such individuals, plus
(B) the amount determined under subparagraph (A) multiplied by the percentage (if any) by which the medical component of the Consumer Price Index for the calendar year in which the plan year begins exceeds such component for 1992.
(3) Adjustments for medicare reductionsIf, by reason of a reduction in benefits under title XVIII of the Social Security Act, the level of health benefits under the Combined Fund would be reduced, the trustees of the Combined Fund shall increase the per beneficiary premium for the plan year in which the reduction occurs and each subsequent plan year by the amount necessary to maintain the level of health benefits which would have been provided without such reduction.
(c) Death benefit premiumThe death benefit premium for any plan year for any assigned operator shall be equal to the applicable percentage of the amount, actuarially determined, which the Combined Fund will be required to pay during the plan year for death benefits coverage described in section 9703(c).
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