As a coal operator, you understand the risks and challenges posed by black lung claims filed by current and former workers. Managing and estimating black lung liabilities can be arduous, and it is important to know what options companies have to protect themselves and cover the cost of claims. Understanding how to self-insure against black lung claims is critical in deciding whether to purchase black lung insurance from a provider or self-insure.
James “Mac” Heslep is a Clarksburg black lung claim defense attorney at Jenkins Fenstermaker, PLLC. Mac helps coal company owners and operators understand what it takes to meet insurance requirements for black lung claims manage liabilities, and defend against claims and litigation when they arise.
Coal Operators, the Law, and How to Self-Insure against Black Lung Claims
When it comes to black lung claims coverage, the law requires coal operators to assume liability for black lung claims under the Black Lung Benefits Act. The operator may either qualify as a self-insurer or obtain appropriate insurance coverage. To qualify for self-insurance, the coal operator must meet the following requirements, as outlined in 20 CFR § 726.101:
- Be in the business of mining coal for at least three consecutive years;
- Demonstrate the administrative ability to process claims;
- Have sufficient funds;
- Obtain security in a manner approved by the Office of Workers’ Compensation Programs; and
- Have five or more full-time employees.
Once you become a self-insured coal operator, the processing and payment of claims fall solely on you. For help ensuring you meet all requirements and handle claims correctly, contact an attorney to understand how to self-insure against black lung claims.
The Benefits of Learning How to Self-Insure against Black Lung Claims
Self-insurance for black lung claims has potential benefits for coal operators. Insurance company rates can be expensive because they consider the insured's risk and the insurance company's liabilities and costs. Through self-insurance, the operator avoids the extra costs an insurance company may pass to them.
In addition to costs, insurance coverage introduces potential issues related to denial of coverage or policy limits that do not adequately cover black lung claims. Self-insured coal operators set aside funds for black lung claims and may accrue interest on those funds while they are held in reserve.
However, there are also disadvantages to being self-insured. Companies that self-insure must be able to anticipate black lung claim liabilities accurately. As it is difficult to predict how much future claims may cost, operators may not always set aside adequate reserves. Insurance companies assume the risk of losses exceeding anticipated liabilities, whereas a self-insured operator could be scrambling if it has no excess funds set aside.
Understand How to Self-Insure against Black Lung Claims Brought by Workers and Families
Black lung disease is a medical condition with potentially serious outcomes, including death. Those eligible to recover benefits include the worker and the worker’s surviving dependents. Dependents who may be eligible for survivor’s benefits include the following:
- Children; and
- Dependent parents and siblings.
Black lung survivor’s benefits are paid in monthly payments, typically around $600, but this can increase to $1,300 per month if the worker had three or more dependents. The benefits paid out under a black lung claim also include treatments and medical services to reduce its effects and symptoms in the worker.
The Black Lung Disability Trust Fund
In an attempt to cover the substantial liabilities of black lung claims, the United States Department of Labor established the Black Lung Disability Trust Fund. The trust fund subsidizes the cost of claims, paying black lung benefits under these conditions:
- When a miner was last employed before January 1, 1970;
- A responsible mine operator is not identified; or
- The miner's most recent employment ended while the operator was self-insured and the company can no longer fund benefit payments.
The significant burdens on the Black Lung Disability Trust Fund are covered mostly by taxes on operating coal companies, which creates a significant burden for those solvent employers.
Contact a Clarksburg Black Lung Claim Defense Attorney
Evaluating the best options to insure and mitigate black lung claims is critical for West Virginia coal operators. Before attempting to qualify and committing to self-insurance, companies must understand how to self-insure against black lung claims and consider the related liabilities and requirements. Clarksburg black lung claim defense attorney James “Mac” Heslep serves clients throughout North Central WV from the Clarksburg office of Jenkins Fenstermaker, PLLC. To discuss insurance requirements for black lung claims and get help with coverage and defense, contact Mac at (304) 521-6120 or fill out the law firm’s online contact form.