Workers Compensation Expense

9 Months Ended

Sep. 30, 2024

Workers Compensation Expense

Workers' Compensation Expense

13. Workers’ Compensation Expense

The Company is liable under the Federal Mine Safety and Health Act of 1969, as subsequently amended, to provide pneumoconiosis (occupational disease) benefits to eligible employees, former employees and dependents. The Company currently provides for federal claims principally through a self-insurance program. The Company is also liable under various state workers’ compensation statutes for occupational disease benefits. The occupational disease benefit obligation represents the present value of the actuarially computed present and future liabilities for such benefits over the employees’ applicable years of service.

In October 2019, the Company filed an application with the Office of Workers’ Compensation Programs (“OWCP”) within the Department of Labor for reauthorization to self-insure federal black lung benefits. In February 2020, the Company received a reply from the OWCP confirming its status to remain self-insured contingent upon posting additional collateral of $71.1 million within 30 days of receipt of the letter. The Company is currently appealing the ruling from the OWCP and has received an extension to self-insure during the appeal process.

On January 18, 2023, the OWCP proposed revisions to regulations under the Black Lung Benefits Act governing authorization of self-insurers.  The revisions seek to codify the practice of basing a self-insured operator’s security requirement on an actuarial assessment of its total present and future black lung liability.  A material change to the regulations is the requirement that all self-insured operators must post security equal to 120% of their projected black lung liabilities.

The proposed regulations were posted to the Federal Register on January 19, 2023 with written comments to be accepted within 60 days of this date.  A subsequent extended comment period expired on April 19, 2023. On May 10, 2024, the OWCP forwarded its final rule establishing requirements for Black Lung Benefits Act self-insurance to the Office of Management and Budget (“OMB”) for review. OMB is charged by various executive orders to review significant regulations. OMB reviews are limited to 90 days and may be extended by an additional 30 days; however, OMB reviews often take longer. At this stage in the rulemaking process, no rule text is publicly available, and the final regulations have not yet been published.

If the above regulation is codified into law, the Company will be required to post additional collateral to maintain its self-insured status. The Company is evaluating alternatives to self-insurance, including the purchase of commercial insurance to cover these claims.  Additionally, the Company is assessing additional sources of liquidity, and other items to satisfy the proposed regulations.

In addition, the Company is liable for workers’ compensation benefits for traumatic injuries which are calculated using actuarially-based loss rates, loss development factors and discounted based on a risk free rate. Traumatic workers’ compensation claims are insured with varying retentions/deductibles, or through state-sponsored workers’ compensation programs.

Workers’ compensation (credit) expense consists of the following components:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
	(In thousands)
Self-insured occupational disease benefits:
Service cost	$	1,278	$	993	$	3,833	$	2,980
Interest cost(1)		1,565		1,511		4,696		4,531
Net amortization(1)		(3)		(241)		(8)		(723)
Total occupational disease	$	2,840	$	2,263	$	8,521	$	6,788
Traumatic injury claims and assessments		2,940		(6,834)		8,016		(2,403)
Total workers’ compensation (credit) expense	$	5,780	$	(4,571)	$	16,537	$	4,385

(1) In accordance with the adoption of ASU 2017-07, “Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost,” these costs are recorded within Nonoperating expenses in the Condensed Consolidated Statements of Operations on the line item “Non-service related pension and postretirement benefit credits.”