The Equal Employment Opportunity Commission (EEOC) has announced the publication of a final rule allowing employers that provide retiree health benefits to continue coordinating those benefits with Medicare (or comparable state health benefits) without violating the Age Discrimination in Employment Act (ADEA). The regulation, which safeguards retiree health benefits, was published in the Dec. 26 Federal Register and became effective immediately.
The EEOC proposed the rule in response to a controversial decision in 2000 by the U.S. Court of Appeals for the Third Circuit in Erie County Retirees Association v. County of Erie. The court held that the ADEA requires that the health insurance benefits received by Medicare-eligible retirees be the same, or cost the employer the same, as the health insurance benefits received by younger retirees. After the Erie County decision, labor unions and employers alike informed the EEOC that complying with the decision would force companies to reduce or eliminate the retiree health benefits they currently provided, leaving millions of retirees aged 55 and over with less health insurance--or none at all.
The new regulation provides an exemption for ADEA coverage for this common and longstanding employer practice. Read the final rule.
