XML 158 R28.htm IDEA: XBRL DOCUMENT

ACCRUED WORKERS' COMPENSATION AND PNEUMOCONIOSIS BENEFITS

12 Months Ended

Dec. 31, 2021

ACCRUED WORKERS' COMPENSATION AND PNEUMOCONIOSIS BENEFITS

ACCRUED WORKERS' COMPENSATION AND PNEUMOCONIOSIS BENEFITS

20.ACCRUED WORKERS' COMPENSATION AND PNEUMOCONIOSIS BENEFITS

We provide income replacement and medical treatment for work-related traumatic injury claims as required by applicable state laws. Workers' compensation laws also compensate survivors of workers who suffer employment related deaths. Certain of our mine operating entities are liable under state statutes and the Federal Coal Mine Health and Safety Act of 1969, as amended, to pay benefits for black lung disease (or pneumoconiosis) to eligible employees and former employees and their dependents. Both pneumoconiosis and traumatic claims are covered through our self-insured programs.

The following is a reconciliation of the changes in workers' compensation liability (including current and long-term liability balances):


	December 31,
	2021		2020

	(in thousands)
Beginning balance	$	54,739	$	53,384
Accruals increase		5,168		5,146
Payments		(10,725)		(8,482)
Interest accretion		926		1,278
Valuation loss		3,340		3,413
Ending balance	$	53,448	$	54,739

The discount rate used to calculate the estimated present value of future obligations for workers' compensation was 2.41% and 1.95% at December 31, 2021 and 2020, respectively.

The valuation loss in 2021 was primarily attributable to unfavorable changes in claims development partially offset by an increase in the discount rate used to calculate the estimated present value of future obligations. The 2020 valuation loss was primarily attributable to a decrease in the discount rate used to calculate the estimated present value of future obligations as well as unfavorable changes in claims development.

As of December 31, 2021 and 2020, we had $100.4 million and $95.2 million, respectively, in surety bonds and letters of credit outstanding to secure workers' compensation obligations.

We limit our exposure to traumatic injury claims by purchasing a high deductible insurance policy that starts paying benefits after deductibles for the particular claim year have been met. Our workers' compensation liability above is presented on a gross basis and does not include our expected receivables on our insurance policy. Our receivables for traumatic injury claims under this policy as of December 31, 2021 and 2020 are $5.7 million and $7.1 million, respectively. Our receivables are included in Other long-term assets on our consolidated balance sheets.

The following is a reconciliation of the changes in pneumoconiosis benefit obligations:


	December 31,
	2021		2020

	(in thousands)

Benefit obligations at beginning of year	$	108,496	$	97,683
Service cost		4,021		3,526
Interest cost		2,545		2,998
Actuarial loss		161		7,787
Benefits and expenses paid		(3,907)		(3,498)
Benefit obligations at end of year	$	111,316	$	108,496

The following is a reconciliation of the changes in the pneumoconiosis benefit obligation recognized in accumulated other comprehensive loss:


	Year Ended December 31,
	2021		2020		2019

	(in thousands)

Net actuarial loss	$	(161)	$	(7,787)	$	(23,298)
Reversal of amortization item:
Net actuarial loss (gain)		4,172		(686)		(4,582)
Total recognized in accumulated other comprehensive loss	$	4,011	$	(8,473)	$	(27,880)

The discount rate used to calculate the estimated present value of future obligations for pneumoconiosis benefits was 2.73%, 2.38% and 3.12% at December 31, 2021, 2020 and 2019, respectively.


	Year Ended December 31,
	2021		2020		2019

	(in thousands)
Amount recognized in accumulated other comprehensive loss consists of:
Net actuarial loss	$	36,388	$	40,399	$	31,927

The actuarial loss component of the change in benefit obligations in 2021 was primarily attributable to unfavorable assumption changes regarding future medical and legal expense levels. These components were offset in part by a) an increase in the discount rate used to calculate the estimated present value of the future obligations and b) favorable black lung claims experience and other demographic changes in the at-risk population. The actuarial loss component of the change in benefit obligations in 2020 was primarily attributable to a) a decrease in the discount rate used to calculate the estimated present value of the future obligations and b) an increase in the assumptions regarding future medical benefits and legal expenses. These components were partially offset in part by favorable demographic changes in the at-risk population.

Summarized below is information about the amounts recognized in the accompanying consolidated balance sheets for pneumoconiosis and workers' compensation benefits:


	December 31,
	2021		2020

	(in thousands)

Workers’ compensation claims	$	53,448	$	54,739
Pneumoconiosis benefit claims		111,316		108,496
Total obligations		164,764		163,235
Less current portion		(12,293)		(10,646)
Non-current obligations	$	152,471	$	152,589

Both the pneumoconiosis benefit and workers' compensation obligations were unfunded at December 31, 2021 and 2020.

The pneumoconiosis benefit and workers' compensation expense consists of the following components:


	Year Ended December 31,
	2021		2020		2019

	(in thousands)
Black lung benefits:
Service cost	$	4,021	$	3,526	$	2,593
Interest cost (1)		2,545		2,998		3,044
Net amortization (1)		4,172		(686)		(4,582)
Total pneumoconiosis expense		10,738		5,838		1,055
Workers' compensation expense		8,339		12,305		17,541
Net periodic benefit cost	$	19,077	$	18,143	$	18,596

________________________________________

(1)	Interest cost and net amortization is included in the Other income (expense) line item within our consolidated statements of income (see Note 2 – Summary of Significant Accounting Policies).

See Note 2 – Summary of Significant Accounting Policies for more information on our accounting policy for workers' compensation and pneumoconiosis benefits.