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Winter 2004 NON-COAL ACT RETIREE HEALTH CARE BONUS What is the UMWA Health Care Bonus and who receives it? The UMWA Health and Retirement Funds pays a Health Care Bonus to Non-Coal Act Retirees and surviving spouses on an annual basis to help offset certain medical charges. The Bonus was established by the 1974 Pension Plan and continues until the retiree reaches Medicare eligibility (at age 65 or meets other Medicare eligibility requirements, such as disability). The Bonus stops once Medicare eligibility is reached. Article XX of the 2002 Wage Agreement between Jim Walter Resources and UMWA employees calls for Non-Coal Act Retirees to pay a deductible for the first $750 of annual family medical charges that are accrued during a pre-selected 12-month period. This amount is to be considered as an annual medical deductible. Details, which explain this provision, can be found in the current wage agreement under Article XX, Section 10, and Paragraph 10. Since January 1, 2002, the deductible was paid only when retirees or one of their dependents was admitted to a hospital. Beginning January 1, 2005, the deductible will apply to inpatient hospital stays and physician office visits. Vision care and prescription medication expenses are not subject to the deductible. THE HEALTH CARE BONUS SHOULD ALWAYS BE USED TO PAY FOR THE DEDUCTIBLE. The Health Care Bonus will continue being paid in January of each year from the UMWA Health and Retirement Funds. The UMWA/JWR Management Joint Health Care Committee approved the Plan Year changes from March 27 to January 1 to coincide with each calendar year for Active Employees and the Non-Coal Act Retirees. This should make keeping up with receipts easier and help with income tax deductions. How is the Health Care Bonus Calculated? As stated before, the Bonus is paid to retirees to help pay for medical bills. During the first year the Bonus is paid on a pro rata basis depending on which part of the year an employee retires. Each year thereafter, the Bonus is paid at $1,000 until the retiree reaches age 65. During the year in which the retiree will reach age 65 (last year of eligibility), the Health Care Bonus is again prorated through the end of that quarter. Jim Walter Resources is assessed an annual premium by the UMWA Health and Retirement Funds based on the number of man-hours worked. This premium is paid to the UMWA Health and Retirement Fund, which allows them to fund the Bonus program.

Other Important Information: Medicare, Part B Medicare Part B is a health care benefit you pay for when reaching 65 years of age. Active employees who are 65 are not required to file for Part B until they retire. Part B coverage is for doctor’s office visits and other outpatient procedures. Medicare, Part D (Prescription Drug Coverage) The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 created the Prescription Drug Benefits program that will be added to Medicare in 2006. These plans are called “Part D” and will offer a variety of choices for prescription drug coverage plans with an estimated monthly premium of $35. The provisions of Part D follows: * Once the $250 annual deductible is met, Medicare pays 75% of covered prescription drug costs for the next $2,000. The individual is responsible for a 25% co-payment. * A beneficiary who has used $2,250 in covered prescription costs is responsible for paying 100% of the next $2,850 of covered expenses. This is called the “donut hole.” * After a beneficiary reaches $5,100 in covered expenses during the year, Medicare will pay for 95% of the remaining covered costs for the rest of that year. At this time, it is not understood how UMWA retirees will be affected with Medicare Part D. The UMWA Wage Agreement addresses Medicare as follows, “…the benefits provided under the Plan will not be paid…otherwise eligible…(for) Medicare. Any…enrollment in a Medicare program shall receive the benefits provided under the Plan only to the extent such benefits are not provided for under Medicare.” Still, retirees have an obligation to enroll in Medicare Part B. Any retiree who does not enroll in Part B and is eligible, will be required to pay the portion of their medical bill that Part B would have paid. Also, the Active Employee may elect to enroll in Medicare as secondary payer. For more information regarding Medicare call 1-800-MEDICARE or on the Internet: www.medicare.gov.