
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 26USC9704]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                Subtitle J--Coal Industry Health Benefits
 
                CHAPTER 99--COAL INDUSTRY HEALTH BENEFITS
 
                   Subchapter B--Combined Benefit Fund
 
                           PART II--FINANCING
 
Sec. 9704. Liability of assigned operators


(a) Annual premiums

    Each 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 premium

    For purposes of this chapter--

                           (1) In general

        The 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 premium

        The 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 reductions

        If, 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 premium

    The 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).

(d) Unassigned beneficiaries premium

    The unassigned beneficiaries premium for any plan year for any 
assigned operator shall be equal to the applicable percentage of the 
product of the per beneficiary premium for the plan year multiplied by 
the number of eligible beneficiaries who are not assigned under section 
9706 to any person for such plan year.

(e) Premium accounts; adjustments

                            (1) Accounts

        The trustees of the Combined Fund shall establish and maintain 3 
    separate accounts for each of the premiums described in subsections 
    (b), (c), and (d). Such accounts shall be credited with the premiums 
    received and debited with expenditures allocable to such premiums.

                           (2) Allocations

        (A) Administrative expenses

            Administrative costs for any plan year shall be allocated to 
        premium accounts under paragraph (1) on the basis of 
        expenditures (other than administrative costs) from such 
        accounts during the preceding plan year.

        (B) Interest

            Interest shall be allocated to the account established for 
        health benefit premiums.

                    (3) Shortfalls and surpluses

        (A) In general

            Except as provided in subparagraph (B), if, for any plan 
        year, there is a shortfall or surplus in any premium account, 
        the premium for the following plan year for each assigned 
        operator shall be proportionately reduced or increased, 
        whichever is applicable, by the amount of such shortfall or 
        surplus.

        (B) Exception

            Subparagraph (A) shall not apply to any surplus in the 
        health benefit premium account or the unassigned beneficiaries 
        premium account which is attributable to--
                (i) the excess of the premiums credited to such account 
            for a plan year over the benefits (and administrative costs) 
            debited to such account for the plan year, but such excess 
            shall only be available for purposes of the carryover 
            described in section 9703(b)(2)(C)(ii) (relating to 
            carryovers of premiums not used to provide benefits), or
                (ii) interest credited under paragraph (2)(B) for the 
            plan year or any preceding plan year.

        (C) No authority for increased payments

            Nothing in this paragraph shall be construed to allow 
        expenditures for health care benefits for any plan year in 
        excess of the limit under section 9703(b)(2).

(f) Applicable percentage

    For purposes of this section--

                           (1) In general

        The term ``applicable percentage'' means, with respect to any 
    assigned operator, the percentage determined by dividing the number 
    of eligible beneficiaries assigned under section 9706 to such 
    operator by the total number of eligible beneficiaries assigned 
    under section 9706 to all such operators (determined on the basis of 
    assignments as of October 1, 1993).

                       (2) Annual adjustments

        In the case of any plan year beginning on or after October 1, 
    1994, the applicable percentage for any assigned operator shall be 
    redetermined under paragraph (1) by making the following changes to 
    the assignments as of October 1, 1993:
            (A) Such assignments shall be modified to reflect any 
        changes during the period beginning October 1, 1993, and ending 
        on the last day of the preceding plan year pursuant to the 
        appeals process under section 9706(f).
            (B) The total number of assigned eligible beneficiaries 
        shall be reduced by the eligible beneficiaries of assigned 
        operators which (and all related persons with respect to which) 
        had ceased business (within the meaning of section 9701(c)(6)) 
        during the period described in subparagraph (A).

(g) Payment of premiums

                           (1) In general

        The annual premium under subsection (a) for any plan year shall 
    be payable in 12 equal monthly installments, due on the twenty-fifth 
    day of each calendar month in the plan year. In the case of the plan 
    year beginning February 1, 1993, the annual premium under subsection 
    (a) shall be added to such premium for the plan year beginning 
    October 1, 1993.

                          (2) Deductibility

        Any premium required by this section shall be deductible without 
    regard to any limitation on deductibility based on the prefunding of 
    health benefits.

(h) Information

    The trustees of the Combined Fund shall, not later than 60 days 
after the enactment date, furnish to the Commissioner of Social Security 
information as to the benefits and covered beneficiaries under the fund, 
and such other information as the Secretary \1\ may require to compute 
any premium under this section.
---------------------------------------------------------------------------
    \1\ So in original. Probably should be ``Commissioner''.
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(i) Transition rules

                    (1) 1988 agreement operators

        (A) 1st year costs

            During the plan year of the Combined Fund beginning February 
        1, 1993, the 1988 agreement operators shall make contributions 
        to the Combined Fund in amounts necessary to pay benefits and 
        administrative costs of the Combined Fund incurred during such 
        year, reduced by the amount transferred to the Combined Fund 
        under section 9705(a) on February 1, 1993.

        (B) Deficits from merged plans

            During the period beginning February 1, 1993, and ending 
        September 30, 1994, the 1988 agreement operators shall make 
        contributions to the Combined Fund as are necessary to pay off 
        the expenses accrued (and remaining unpaid) by the 1950 UMWA 
        Benefit Plan and the 1974 UMWA Benefit Plan as of February 1, 
        1993, reduced by the assets of such plans as of such date.

        (C) Failure

            If any 1988 agreement operator fails to meet any obligation 
        under this paragraph, any contributions of such operator to the 
        Combined Fund or any other plan described in section 404(c) 
        shall not be deductible under this title until such time as the 
        failure is corrected.

        (D) Premium reductions

            (i) 1st year payments

                In the case of a 1988 agreement operator making 
            contributions under subparagraph (A), the premium of such 
            operator under subsection (a) shall be reduced by the amount 
            paid under subparagraph (A) by such operator for the plan 
            year beginning February 1, 1993.
            (ii) Deficit payments

                In the case a 1988 agreement operator making 
            contributions under subparagraph (B), the premium of such 
            operator under subsection (a) shall be reduced by the 
            amounts which are paid to the Combined Fund by reason of 
            claims arising in connection with the 1950 UMWA Benefit Plan 
            and the 1974 UMWA Benefit Plan as of February 1, 1993, 
            including claims based on the ``evergreen clause'' found in 
            the language of the 1950 UMWA Benefit Plan and the 1974 UMWA 
            Benefit Plan, and which are allocated to such operator under 
            subparagraph (E).
            (iii) Limitation

                Clause (ii) shall not apply to the extent the amounts 
            paid exceed the contributions.
            (iv) Plan years

                Premiums under subsection (a) shall be reduced for the 
            first plan year for which amounts described in clause (i) or 
            (ii) are available and for any succeeding plan year until 
            such amounts are exhausted.

        (E) Allocations of contributions and refunds

            Contributions under subparagraphs (A) and (B), and premium 
        reductions under subparagraph (D)(ii), shall be made ratably on 
        the basis of aggregate contributions made by such operators 
        under the applicable 1988 coal wage agreements as of January 31, 
        1993.

                          (2) 1st plan year

        In the case of the plan year of the Combined Fund beginning 
    February 1, 1993--
            (A) the premiums under subsections (a)(1) and (a)(3) shall 
        be 67 percent of such premiums without regard to this paragraph, 
        and
            (B) the premiums under subsection (a) shall be paid as 
        provided in subsection (g).

                          (3) Startup costs

        The 1950 UMWA Benefit Plan and the 1974 UMWA Benefit Plan shall 
    pay the costs of the Combined Fund incurred before February 1, 1993. 
    For purposes of this section, such costs shall be treated as 
    administrative expenses incurred for the plan year beginning 
    February 1, 1993.

(Added Pub. L. 102-486, title XIX, Sec. 19143(a), Oct. 24, 1992, 106 
Stat. 3042; amended Pub. L. 103-296, title I, Sec. 108(h)(9)(A), Aug. 
15, 1994, 108 Stat. 1487.)

                       References in Text

    The Social Security Act, referred to in subsec. (b)(3), is act Aug. 
14, 1935, ch. 531, 49 Stat. 620, as amended. Title XVIII of the Act is 
classified generally to subchapter XVIII (Sec. 1395 et seq.) of chapter 
7 of Title 42, The Public Health and Welfare. For complete 
classification of this Act to the Code, see section 1305 of Title 42 and 
Tables.


                               Amendments

    1994--Subsecs. (b)(2), (h). Pub. L. 103-296 substituted 
``Commissioner of Social Security'' for ``Secretary of Health and Human 
Services''.


                    Effective Date of 1994 Amendment

    Amendment by Pub. L. 103-296 effective Mar. 31, 1995, see section 
110(a) of Pub. L. 103-296, set out as a note under section 401 of Title 
42, The Public Health and Welfare.

                  Section Referred to in Other Sections

    This section is referred to in sections 9703, 9705, 9706, 9707 of 
this title; title 30 section 1232.
