Frequently Asked Questions
Q: What is a VEBA?
A: VEBA is short for Voluntary Employees Beneficiary Association, a commonly used vehicle to provide health benefits. It is a qualified trust governed by the provision of the Employee Retirement Income Security Act (ERISA), similar to the health benefit plans run by the UMWA Health and Retirement Funds. Under the bankruptcy court order, Patriot ceased being responsible for your retiree health benefits as of July 1, 2013 and the VEBA stepped in and provided coverage.
Q: What will our benefits look like?
A: Beginning in January, the plan of benefits will be the same as the health benefit plan currently in place for active miners. That plan is a 90/10 plan with a total maximum out-of-pocket cost per year of $2,400 per family, composed of $1,600 per family ($800 per individual) in medical costs and $800 per family in prescription drug co-payments. There is a $250 per individual deductible that also counts toward the maximum out-of-pocket cost. There is no monthly premium.
So, for example, if you are hospitalized early in January and the cost of the hospital bill is $25,000, you will pay the $250 deductible and 10% of the hospital bill up to a maximum of $550, for a total of $800, and you will have met your individual annual out-of-pocket maximum for medical costs for the year. You will still pay prescription drug co-payments up to $800 per family for the year but the plan will pay 100% of your medical bills for the remainder of the year. If your spouse then goes into the hospital and incurs the same $25,000 charge, you will pay the $250 deductible and 10% of the hospital bill up to a maximum of $550, for a total of $800, and you will have met your family annual out-of-pocket maximum for medical costs for the year.
Q: How is the VEBA going to pay for the benefits?
A: The VEBA will have around $400 million dollars to pay benefits. These benefits will be paid through providers just like they are today. The providers bill the VEBA for the cost of the procedures.
Q: How many people will be in the VEBA?
A: The initial population in the VEBA will be about 11,200 retirees, surviving spouses and dependents.
Q: I’m covered by the Coal Act. Will I be in the VEBA?
A: No, the bankruptcy did not affect retirees who receive their benefits pursuant to the Coal Act. You will continue to receive your retiree health benefits from the company, not the VEBA, as required by law.
Q: How do I know if I’m a Coal Act retiree?
A: In general terms, the Coal Act covers those who took their pensions prior to October 1, 1994. If you retired after that date, your benefits were governed by the contract and subject to the bankruptcy process. All 11,200 retirees and surviving spouses in the VEBA received their pensions after October 1, 1994 and are not covered by the Coal Act.
Q: How do I find out if my doctor is on the provider list?
A: HealthSmart can provide a list of in-network physicians that can be accessed. Before enrolling in the VEBA you were under a Blue Cross Blue Shield Plan and the Anthem network of hospitals and doctors is the same under the VEBA. You can review the list of providers at www.anthem.com.
Q: Will I still be able to receive the same medications that I received before the bankruptcy?
A: Certain medications that were previously covered will no longer be covered because they have an over the counter equivalent. The two major categories are non-sedating antihistamine such as Loratadine, Claritin, Cetirizine, Zyrtec, Fexofenadine, Allegra. Proton pump inhibitors such as Prilosec, Lansoprazole, Prevacid, Esomeprazole, Nexium, Pantoprazole, Protonix, Rabeprazole, Aciphex, Dexlansoprazole, Dexilant are no longer covered. Omeprazole will be the only available proton pump inhibitor offered under the Plan.CVS Caremark is the new prescription drug manager for the VEBA and you can contact them if you have questions. However, as with any change in prescription, you should consult your doctor to discuss treatment options.
Q: Will we have to change doctors and hospitals?
A: No, the VEBA has contracted with Healthsmart, the same claims administrator used by the UMWA Funds, to administer the medical benefits. Healthsmart has access to the same Blue Cross network that Patriot used. So you will be able to continue to use the same doctors and hospitals that you currently use.
Q: Who runs the Patriot Retirees VEBA?
A: The Patriot Retirees VEBA Trustees have the duty to direct the affairs of the VEBA. Patriot has no role in running the VEBA.
The trustees will contract with third party claims administrators to administer the medical and prescription drug benefits. They will also hire the attorneys, actuaries and auditors necessary to comply with government reporting required under ERISA.
Q: I received an Explanation Of Benefits “EOB” from HealthSmart or Anthem. Is this a bill?
A: No. An Explanation Of Benefits (commonly referred to as an EOB form) is a statement sent by the health insurance company to covered members explaining what medical treatments and/or services were paid for on their behalf.
An EOB describes:
* the service performed—the date of the service, the description and/or insurer’s code for the service, the name of the person or place that provided the service, and the name of the patient
* the doctor’s fee, and what the insurer allows—the amount initially claimed by the doctor or hospital, minus any reductions applied by the insurer
* the amount the member is responsible for
* any adjustment reasons or adjustment codes
There also will be at least a brief explanation of any claims that were denied,if any, along with a point to start an appeal.
Q: How much money will the VEBA have?
A: The settlement agreements call for more than $400 million over the next four years, including $310 million from Peabody and an estimated $103 million from Patriot, including potential direct payments of up to $75 million and expected coal production royalties of about $28 million. In the first year, the VEBA will receive $105 million in direct payments plus an estimated $7 million in coal production royalties.
Q: What about the original $15 million from Patriot?
A: As part of the bankruptcy order the VEBA was to receive an initial contribution of $15 million from Patriot in July 2013. That money has already been spent providing benefits in July, August and September. In addition, the UMWA has loaned the VEBA about $13.7 million directly and has obtained a bank loan of $15.5 million using UMWA assets as collateral to provide further money to provide benefits while the bankruptcy process is ongoing. These assets should be sufficient to provide benefits through the end of the year. Once the initial settlement monies are delivered the VEBA will repay the UMWA and the bank loan.
Q: How long will this money last?
A: We believe, based on past health care costs and utilization, that the VEBA will be able to provide benefits until sometime in 2017.
Q: When will I be notified of changes, if any, to the VEBA?
A: The VEBA will notify all beneficiaries well in advance of any changes to benefits