Summary

These two fact sheets provide information on proposed legislation concerning financing health benefits for retirees in the coal industry, an issue that has sparked considerable interest because of shortfalls in the two trusts that are providing benefits. GAO responds to questions about the characteristics of the trusts' beneficiaries, the benefits provided, and the present and projected financial condition of the trusts. The first fact sheet focuses solely on benefits accruing to retired coal miners, while the second examines benefits accruing for coal industry retirees in general, including miners and white-collar workers.

GAO found that: (1) both trusts provide inpatient and outpatient hospital benefits, physician and primary care services, low prescription drug copayment benefits, and other specialized benefits; (2) enrollment in the trusts totals about 116,000; (3) many employers and signatories to the trusts are either no longer in business, their business status is unknown, or the company is unidentifiable; (4) annual net costs for both trusts total about $230 million; (5) requiring beneficiaries to reenroll or recertify would not identify a significant number of ineligible beneficiaries; (6) nonsignatory mines operated by signatory companies produced about 66 million tons of coal in 1990, and a significant number of formerly signatory mines are operated by nonsignatory companies; (7) the trusts' funding formula is based on employee work hours and additional contributions coming from employers through coal tonnage purchases from other operators; (8) past and pending lawsuits attempt to require signatory and nonsignatory coal companies to fund the trusts; (9) changes in the actuarial surplus include plan benefits, actuarial assumptions used, and the plan's actual experience; and (10) withdrawal liability of the largest companies totals $350 million.