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UNITED STATES GOVERNMENT RAILROAD RETIREMENT BOARD Memorandum L r - M .-_6 2r- A P R 3 0 1990 TO Director of Research and Employment Accounts FROM Deputy General Counsel SU BJECT: Missouri Pacific Employees' Health Association Employer Status This is in response to the request for my opinion as to the status of the Missouri Pacific Employees' Health Association (MPEHA) as an employer covered by the Railroad Retirement Act (RRA) and Railroad Unemployment Insurance Act (RUIA). The MPEHA is not currently an employer under the Acts. The status under the Acts of earlier forms of this Association has been considered on two previous occasions. In Legal Opinion L-39-673, the General Counsel noted that the Hospital Department of the Missouri Pacific Railway existed under the complete control of the Missouri Pacific Railway until July 27, 1912. At that time it was succeeded by the Missouri Pacific Hospital Service. Although a separate entity from the railroad, the railroad retained control of the Hospital Service through the Board of Directors. A second reorganization occurred on October 5, 1920. At that time, the Service became the Missouri Pacific Hospital Association. Control was transferred to a 19 member Board, with 14 members elected by labor organizations representing various crafts on the Missouri Pacific Railroad (successor to the Missouri Pacific Railway). The General Counsel concluded that because the 1920 reorganization transferred actual control to the employees rather than the railroad, the Association was no longer under common control with the railroad, and ceased to be an employer under the Acts. Finally, the Association notified the Board in 1957 that it had changed its name to the Missouri Pacific Employees' Hospital Association. The General Counsel held in Legal Opinion L-57-197 that the organization had merely effected a name change without affecting its status as not being a covered employer under the Acts. The status of the MPEHA now comes into question once again as a consequence of a merger between the MPEHA and the Texas St Pacific Railway Hospital Association (TStPRHA) on January 1, 1988. The -2- Director of Research and Employment Accounts General Counsel held T&PRHA to be a covered employer under the Acts In Legal Opinion L-38-1258. In Legal Opinion L-89-37, I found that the complete merger of the T&PRHA into the MPEHA terminated the employer status of the former association effective with the date of merger, January 1, 1988. In response to a letter from mv office, Ms. Marala P. Tamprateep, Liaison, Corporate Affairs for the President of MPEHA, provided by her letter of October 2, 1989, updated information regarding MPEHA following the merger. As summarized bv that description, the MEPHA continues to be a non-profit prepaid health plan organized under Missouri law to provide health care services to its membership.!/ The MPEHA currently has some 17,500 members, employed by the Missouri Pacific Railroad Company, the Union Pacific Railroad Company, and some smaller railroads. The MPEHA is currently governed by a 14-member Board of Managers. All but five Board members aie chairmen of the major participating craft unions. Two of these five non-union members are officials of the Union Pacific Railroad. As you know, section 1(a)(1) of the RRA provides in part that: "The term 'employer' shall include-- * * * * "(ii) any company which is directlv or indirectly owned or controlled bv, or under common control with, one or more emplovers as defined in paragraph (i) of this subdivision and which operates any eouipment or facilitv or performs any service (other than trucking service, casual service, and the casual operation of eouipment and facilities) in connection with the transportation of passengers or property by railroad, or the receipt, delivery, elevation, transfer in transit, refrigeration or icing, storage, or handling of property transported by railroad; * * * "(iv) any railroad association, traffic association, tariff bureau, demurrage bureau, weighing and inspection bureau, collection agency, and any other association, bureau, agency, or 1J It appears that at some time after the merger with T&PRHA, the Missouri Pacific Employees' Hospital Association changed its name to Missouri Pacific Employees' Health Association, the name by which it is known at present. Director of Research and Employment Accounts organization which is controlled and maintained wholly or principally bv two or more employers as defined in paragraph (i) , (ii) , or fill) of this subdivision and which is engaged in the performance of services in connection with or incidental to railroad transportion * * Sections 1(a) and 1(b) of the RUIA (45 U.S.C. §§ 351(a) and (b)) contain substantially similar definitions, as does section 3231 of the Railroad Retirement Tax Act (RRTA) (26 U.S.C. ^ 3201-3233). Furnishing medical and surgical care for the employees of a rail carrier has been held to be a service in connection with that carrier's railroad transportation within the meaning of the Acts. See Legal Opinions L-38-650, L-38-813, and L-38-1258. Moreover, an activity which constitutes a "service" would clearly also be "incidental" to railroad tiansportation. See 20 CFR 202.14. However, an association which furnishes such care, but which is neither directly or indirectly controlled by the rail carrier, nor under common control with a carrier; or which is not controlled and maintained by more than one carrier, does not meet either of the foregoing definitions of emplover under the Acts. See Legal Opinion L-88-99, terminating the status of the Atchison, Tooeka and Santa Fe Employees' Benefit Association as an emplover under the Acts. The evidence here indicates that 9 of 14 members of the Board of Managers of MPEHA represent railroad employees rather than participating railroads, including the Missouri Pacific and the Union Pacific. Prior opinions establish that the MPEHA performs its services primarilv at its own facilities, and is supported primarily by participating employees' wage deductions. Accordingly, the evidence does not establish that the MPEHA had fallen under the control of a railroad or group of railroads prior to the merger of the T&PEHA into it, or that the merger changed these circumstances afterward such that the MPEHA, as the surviving entity, came under control with a railroad or came to be maintained by more than one railroad. It is therefore my opinion that the status of the Missouri Pacific Employees' Hospital Association, now known as the Missouri Pacific Employees' Health Association (MPEHA) is not Director of Research and Employment Accounts covered by the Railroad Retirement and Railroad Unemployment Insurance Acts remains unchanged following its merger with the Texas & Pacific Railway Hospital Association (T&PRHA) on January 1, 1988. An appropriate form G-215 giving effect to the foregoing is attached. Steven A. Bartholow Attachment^ „ KTBlankraam 0240o/C . 2046-89.

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