In 1946, the United Mine Workers of America (UMWA) President John L. Lewis demanded a pension and medical care program for American coal miners. The collective bargaining agreement of the same year between the Union and U.S. Secretary of the Interior Julius A. Krug established two trust funds, one for welfare and retirement payments and another for medical care benefits. Krug signed the agreement on behalf of the industry because the U.S government had seized the country's coal mines during the miners' 1946 strike.

The original names for the pension and medical care plan was the Welfare and Retirement Fund. Coal companies paid money to the Fund according to a royalty per ton of coal mined. The royalty rose gradually from five cents per ton in 1946 to eighty-two cents per ton in 1974. The first welfare and medical checks reached beneficiaries in 1947, but a dispute between the union and the coal industry held up the first pension check to a retired miner until 1948.

From 1946 until 1971, there was a close relationship between the UMWA and the Fund. There were three members of the Fund Board of Trustees, one each for the union and the industry and one "neutral" trustee. John L Lewis held the Union's trusteeship from 1946 until his death in 1969, while his close associate and director of the Fund, Josephine Roche, was the neutral trustee from 1950 to 1971. UMWA President W.A. "Tony" Boyle served as the Union's trustee from 1969 to 1971. Collective bargaining agreements between the Union and the coal industry established the royalty payments to the Fund. But the collaboration between Lewis and Roche, and later Boyle and Roche, placed policy-making decisions in the Union's hands and indirectly led to the abuses and mismanagement of the Funds that were made public in the late 1960s.

The 1946 Kruger-Lewis agreement called for an investigation of coal miners' health and medical treatment, sanitation, and housing in the coal fields. This study took place in 1946-47 under the direction of Rear Admiral Joel T. Boone, Navy Medical Corps. Boone's report, "Medical Survey of the Bituminous Coal Industry," revealed inadequate health facilities, lack of qualified physicians, and poor housing and sanitation in many parts of the coal fields. Accordingly, in 1948 Warren F. Draper became the Fund's executive medical officer in charge of ten Area Medical Offices covering mining districts. These offices arranged for the delivery of medical care to eligible coal miners by doctors in the coal fields.

The host of difficulties with the Fund's health care program from 1948 to 1951 led to a decision to build and staff ten hospitals in Kentucky, West Virginia, and Virginia. These Miners Memorial Hospitals opened their doors in 1955 and 1956, offering modern facilities and equipment and well-trained medical staff to the Fund's beneficiaries. Due to the gradual decline of the coal industry during the 1950s and 1960s and to the corresponding decrease in the number of beneficiaries for medical care programs, the Fund decided in 1963 to transfer the hospitals to the Appalachian Regional Hospitals, Inc., a non-profit corporation established by the Board of National Missions of the United Presbyterian Church.

The problem which led to the transfer of the hospitals also affected the other parts of the Fund's programs. The Board of Trustees changed eligibility requirements for pensions in 1953 and 1960, responding to declining payments form the royalty on coal tonnage. These changes reduced the number of retired miners who qualified for pensions. A revision in the health care program in 1962 denied benefits to miners whose employers were delinquent in making payments to the Fund. These changes in the Fund's programs, coupled with the Board of Trustees' investment decisions for Fund financial reserves, stirred much resentment among coal miners. Their criticism of the Fund escalated in step with their dissatisfaction with the UMWA leadership in the late 1960s.

Friction between rank and file coal miners, the UMWA, and the Fund produced the 1969 class action lawsuit. On behalf of 17,000 miners who had been denied benefits by the Fund, this suit alleged that Fund finances had been mismanaged and that pension eligibility requirements were arbitrary and capricious. The presiding judge's decision in 1971 found in favor of the plaintiffs and began a series of important changes for the Fund, including the removal of trustees and the director, diverting Fund monies to new bank accounts and investments, and implementing new pension application procedures. As a result of the eligibility portion of the judge's decision, thousands of miners previously denied pensions began to receive them.