The Department of Labor requires coal companies to cover medical bills for workers who contract black lung disease. But if a company can’t pay — usually due to bankruptcy — the government uses a trust fund as a backup.
A new rule on Wednesday requires self-insured coal companies to fully cover the potential liabilities for workers facing the incurable disease linked to coal mining. Most companies buy insurance, but some are self-insured — and likely far underinsured.
Some companies had as little as 3% of their potential liability for black lung payments available, according to a background document to support a federal rule change.
If those deficient self-insured companies went bankrupt, Rebecca Shelton with the Appalachian Citizens Law Center said the trust fund would likely foot the bill and coal companies would skirt responsibility for black lung victims.
“In the past decade there have already been some bankruptcies that have shed nearly a billion dollars of debt onto the fund,” Shelton said.
A 2020 report from the Government Accountability Office seems to agree with her assessment of the situation too.
“The Black Lung Disability Trust Fund faces financial challenges, and DOL’s limited oversight of coal mine operator insurance has further strained Trust Fund finances by allowing operator liabilities to transfer to the federal government.”
In recent years, silica dust exposure has led to a surge in black lung cases in Appalachian coal mines. It is caused by workers having to cut through more rock to get at what little coal is left.
Due to federal policies that require 30 day notices for changes, the self-insured coal mine rule would take effect in the final days of the Biden administration.
In a letter of support for a previous draft of the rule that proposed a 120% coverage, the National Black Lung Association said it protects “not just another account in the Treasury Department; it is a key part of the system for financing a benefit program that disabled and dying miners and their families need.”
At the same time, a lawyer representing two large self-insured mining companies, Alpha Natural Resources and Warrior Met Coal, wrote the rule is “arbitrary, capricious and inconsistent with the department’s statutory authority. It is also bad policy.”
Meanwhile, they have been pushing for bills in Congress that would increase black lung benefits for survivors. So far, they have been blocked by members of Congress who have pointed to the debt the fund has already incurred.
“Trying to eliminate this source of debt to the fund is important to improve benefits,” Shelton said. “Republicans have often pointed to the insolvency of the fund as an issue, so I hope that their actions are in line with that concern…and that they see this as a step towards making sure the trust fund doesn’t go more into debt.”
The ACLC says it remains to be seen if the rule will be targeted by an incoming Republican-controlled Congress via formal reviews or defunding efforts.
