Black Lung Benefit Trusts as a Federal Self-Insurance Alternative
Since the enactment of the Federal Coal Mine Health and Safety Act1 (FCMHSA) in late 1969, occupational pneumoconiosis, "black lung disease," has been compensable under federal law. These federal black lung benefits are coordinated with state workmen's compensation or occupational disease laws to provide death or disability benefits for coal miners suffering from the disease. Black lung benefits are provided at federal cost under Part B of Title IV of the FCMHSA with respect to claims which arose before July 1, 1973 (Part B benefits)." Benefits are payable directly or indirectly by coal mine operators under Part C of Title IV of the FCMHSA with respect to claims arising after June 30, 1973 (Part C benefits). Part C liability is imposed directly on the coal mine operator found to be the last responsible operator with respect to a Part C claim. To the extent that no last responsible operator can be found or such operator fails to satisfy its obligations to pay Part C benefits, benefits will be paid by a Black Lung Disability Trust Fund, the "National Disability Trust," established in 1978 for this purpose. The National Disability Trust is funded by a tonnage excise tax on coal mined and sold in the United States. The Trust is also responsible for the payment of Part C benefits with respect to miners who had no coal mine employment after the end of 1969. The coordination of federal and state black lung programs has been adequately discussed elsewhere; similarly, a detailed description of federal and state benefits and the source of payment of those benefits may be found elsewhere.1 However, a brief discussion of the obligation of coal mine operators to satisfy certain insurance or self-insurance requirements with respect to Part C liabilities will provide necessary background for the principal focus of this article: the use of individually established and maintained qualified black lung benefit trust funds to provide Part C benefits and satisfy self-insurance requirements. Black lung benefit trusts provide significant tax and funding advantages to the operator. However, current regulations place restrictions upon establishment and maintenance of these trusts, thereby discouraging their use. As will be seen, these restrictions may easily be corrected by Congress and the Internal Revenue Service, thus encouraging the use of black lung benefit trusts to effectively provide benefits and satisfy self-insurance needs, yet provide tax and funding savings to the operator.