Unpublished Disposition, 875 F.2d 870 (9th Cir. 1987)

MEMORANDUM^* 

FACTS AND PROCEEDINGS

In April 1979, Puzis began to receive health benefits provided by the Masters, Mates & Pilots Health & Benefit Plan ("the Plan"). Benefits under the Plan were established pursuant to the then applicable collective bargaining agreement ("CBA") between maritime employers and the International Organization of Masters, Mates & Pilots, a labor organization representing ship's officers. The 1978 CBA stated, in part, that:

The MM & P Health and Benefit Plan, and its trust indenture heretofore established ..., shall be continued in force and effect to and including June 15, 1982 conditioned on the continued approval by the Bureau of Internal Revenue on the subject of tax deductions only.

All existing regular and supplementary benefits and those other benefits provided herein shall be continued in effect for the life of the trust and shall be paid for by the Company.

Later modifications extended the expiration date. In 1984, a labor-management committee was appointed under the CBA to undertake review of the Plan and recommended that health care benefits for one class of retirees, deferred vesting pensioners, be terminated. Puzis, as a deferred vesting pensioner, demanded that his health care coverage be continued. The Plan refused. On April 15, 1987, Puzis filed a complaint alleging that the Plan violated the Employee Retirement Income Security Act, 29 U.S.C. §§ 101 et seq. ("ERISA"), and the Labor Management Relations Act, 29 U.S.C. §§ 185, 186(c) (5), by unilaterally terminating his health coverage. The parties cross-moved for summary judgment. The district judge filed a memorandum decision and order denying Puzis's motion, granting the Plan's, and entered judgment in favor of the Plan. Puzis timely appeals.

DISCUSSION

Appellant argues that his health care benefits cannot be discontinued once he becomes a pensioner. He argues that such benefits become fully vested under ERISA or, in the alternative, that they were guaranteed to him in the CBA.

Health care benefits, as distinguished from pension rights, are included within the term "welfare benefits." ERISA does not require welfare benefits to be vested. 29 U.S.C. § 1053. In fact, Congress explicitly exempted welfare benefit plans from ERISA vesting protection. 29 U.S.C. §§ 1051-1061. Welfare benefit plans were defined to include programs that provide "medical, surgical, or hospital care or benefits." 29 U.S.C. § 1002(1). This court has found that ERISA's vesting provisions do not apply to benefits provided by ERISA welfare benefit plans. See West v. Greyhound Corp., 813 F.2d 951 (9th Cir. 1987). Therefore, ERISA did not cause appellant's health care benefits to vest.

Appellant further argues that the medical benefits he enjoyed at the time of his retirement were vested by the Plan in effect at that time. He correctly notes that a CBA may create a Plan which vests medical benefits for retirees. Bower v. Bunker Hill Co., 725 F.2d 1221, 1223 (9th Cir. 1984). Vesting, however, if it occurs, must be found in the express language of the CBA or Plan itself. See West, 813 F.2d at 954-55.

The language in the 1978 CBA unequivocally provides for a June 15, 1982 expiration date, a clear indication that such benefits are not vested. Bower, 725 F.2d at 1223. Subsequent three year CBA extensions confirm the conclusion that health care benefits are terminable.

Appellant points out that the language used to extend the health benefits is the same as the language which extended the pension trust. Since ERISA requires that pension benefits vest, use of identical language should lead to the conclusion that the health care benefits are similarly vested, appellant argues.

Appellant's argument fails. The language of the CBA has no bearing on the scope of ERISA's vesting provisions. The fact that the term of the health benefits was extended with language identical to that extending the term of the pension benefits in no way affects the issue of vesting.

Appellant also cites CBA language about "lifetime limitations for reimbursements" and that "Medicare deductibles shall be reimbursed regardless of years of coverage or cost of the deductible." Appellant urges that this language shows that he is to receive lifetime benefits. However, as the district court properly noted, such provisions merely remove the cap on the reimbursement of medical expenses. In context, such provisions are clearly subject to the length of the agreement itself.

Appellant further argues that health care benefits were tied to his status as a pensioner, rather than the term of the CBA and points to the provision that " [d]uring the period he continues to be entitled to payment of such pension, a Pensioner shall be eligible for a death benefit." Whatever such provision may imply about death benefits, it does not help us in determining whether the health care benefits were vested. In any event, this provision cannot overcome the provisions of the CBA (as amended from time to time) which limit its duration.

AFFIRMED.