Court approves end to Blackjewel insurance

CASPER — Hundreds of out-of-work coal miners across the country lost their health care Saturday, after bankrupt coal operator Blackjewel received court approval to terminate its health insurance program.

The employment-based insurance covered some 1,700 workers at 32 mines, including two coal mines in Wyoming. The insolvent company is no longer obligated to cover the premiums or claims of employees, according to court documents.

Wyoming’s Department of Workforce Services has continued to extend support to workers seeking unemployment resources, according to Gillette Workforce Center Manager Rick Mansheim.

He estimated the department has helped more than 400 out-of-work Blackjewel workers since the Eagle Butte and Belle Ayr mines suddenly closed July 1. That same day, Blackjewel filed for bankruptcy, lost a key creditor and sent hundreds of workers home indefinitely.

Enroll Wyoming, an organization that helps Wyomingites find insurance on the open market, will be available at the center to assist workers searching for new insurance plans.

“We’re still here, and we can still help,” Mansheim said. “We’re not seeing as many people as we did. But we’re still here and we are still available to help.”

According to an Aug. 24 letter sent to employees by Revelation Energy (the company responsible for Blackjewel’s health care program) workers have 60 days from the loss of their “job-based coverage” to enroll in a new health care plan. Workers also became ineligible for coverage under the Consolidated Omnibus Budget Reconciliation Act, or COBRA, according to the letter.

Denise Burke, a senior health policy analyst at the Wyoming Department of Insurance, encouraged workers to take action to find alternative health care immediately.

“It appears that the benefits are going to end, period,” she said. “So we would encourage people to apply, but they will have to have proof of loss of employment.”

The Wyoming Department of Insurance will also be available to help individuals as they navigate new insurance options, according to the staff.

“I think the biggest surprise to (workers) is going to be the difference between what they are going to have to pay individually versus the benefit of what they’ve been receiving,” Burke said.

Canceling existing health care obligations was the “only viable option to avoid the risk that the accumulation of new claims for medical expenses will exceed the Debtors’ ability to reimburse such claims,” counsel for the company stated in court documents. Blackjewel reported paying $2.3 million in medical claims since filling for bankruptcy.

Though Blackjewel received a green light from a federal judge to sell the Eagle Butte and Belle Ayr mines in Wyoming back to its previous owner, Contura Energy, the deal has yet to come to fruition. Objections from the federal government have caused unanticipated delays in transferring employment obligations to the next operator.

As for breaching employer-based insurance plans during bankruptcy: “Debtors are very often granted permission to do it and it’s not at all unusual,” said Michael Duff, a University of Wyoming professor specializing in labor law. “... A lot of what people assume is in labor and employment law, simply isn’t there, the protections are a fiction, they simply aren’t there.”

Blackjewel had been drawing funds from an immediate purchase deposit and limited coal sales to cover incoming claims since filing for bankruptcy, Stephen Lerner, the company’s attorney, said in court Wednesday. But the funds rapidly evaporated as the mines stay idle and deals turn sour.

“(Benefits) just all goes down the wash in bankruptcy,” Duff added.

Despite approving the order to terminate the plan on Aug. 28, the federal bankruptcy judge expressed concern for the dwindling benefits for soon-to-be uninsured workers.

“What I am concerned about is this is being handled on a rather expedited basis,” U.S. District Judge Frank Volk said last week. “What I want to be able to do is make sure employees have had time to react to this request. Best to know what is in the pipeline and what is coming.” Blackjewel did not respond to repeated requests for comment by press time.