Friday, Dec 6, 2013
Peabody, Patriot Coal, UMWA Reach Benefits Settlement
WSIL -- It's been a long time coming for many retired coal miners. Peabody Energy, Patriot Coal, and the United Mine Workers have reached a settlement to have their health benefits covered. Those benefits had been cut after Patriot declared bankruptcy.
The settlement came late Wednesday, one year and three months after Patriot, a spin-off company from Peabody, filed for bankruptcy. It's not a long-term solution, but many former coal miners say they're pleased with the solution.
"I'm very excited about it, because it's something that we didn't have. All along we've struggled and fought for this, and finally when it came to pass, many people didn't think it would ever happen," explains retired coal miner Gary Hastings from Du Quoin.
He says this will mean the difference between surviving and financial ruin for many retirees. The agreement is to set up a Voluntary Employee Beneficiary Association, or VEBA, which will then pay out the benefits. Peabody will contribute $310 million into it over four years, and Patriot will add roughly $90 million over the same term.
"It's similar to what we had, we do have a deductible now," says Hastings. "Before we had co-pays, but now there is a deductible. But the deductible, I can live with it."
Phil Smith with the United Mine Workers says, "Our primary goal has been to make sure that the retirees that had worked for the companies were involved in this, got the health care that they had earned. This is yet another step down that road. it's a significant step, it's a significant amount of money."
Arch Coal, which also spun off some assets into Patriot Coal, has not yet agreed to help fund the VEBA. Smith with the United Mine Workers says the union will continue to push for Arch to pay up, but they're now focusing their sights on Congress. They are looking for a more permanent solution with an update to the Coal Act.
The Coal Act would cover long-term benefits for retired miners from bankrupted companies with money from a federal mine reclamation fund. This settlement gives the UMWA four years to get the law passed in Congress. So far, it has bipartisan support with 26 co-sponsors.
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