Compliance January 7, 2003

EEOC Reviewing Policy on Retiree Health Benefits

July 25, 2001 (PLANSPONSOR.com) - The Equal Employment Opportunity Commission (EEOC) is reviewing its policy toward retiree health care benefits in light of the refusal by the US Supreme Court to rule on the Erie County court case.

Reported by

editors@plansponsor.com

Last year, in Erie County Retireees Association v. County of Erie, the Third Circuit Court of Appeal issued a ruling finding that the Age Discrimination in Employment Act (ADEA) applied to employers who provide different health care benefits for pre-65 and post-65 retirees.

The court’s opinion noted that to avoid violating ADEA, employers had to show that the post-65 retirees were eligible for benefits equal to those its employees under 65.
This decision was incorporated into the EEOC’s compliance manual.

Following that ruling, the EEOC revised its enforcement manual so that employers nationwide could not discriminate against retirees on the basis of age when offering retiree health benefits. The EEOC also opened a case against school systems in Wisconsin that cut off health benefits when retirees qualify for Medicare.

Policy on Hold

However, the EEOC appears to have backed off that position. “A number of cases that we had been working on in Minnesota and Wisconsin have been closed pending further review by an internal task force studying the implications of the Erie decision on all stakeholders,” said a spokesperson at the EEOC. The EEOC also will not open up any new cases during the task force’s review.

The commission recently met with employer representatives to inform them of the pending review. Maria Ghazal, director health policy at the American Benefits Council, said that the meeting was set up to discuss the review of the policy. However, nothing is yet official nor have any potential changes been announced.

According to ABC, the EEOC is not expected to act until a new chairman is in place. President Bush has nominated Cari Dominguez to be commissioner of the EEOC. Upon her confirmation she will be named chair. In the interim, EEOC staff will continue to study how the agency might clarify or modify its current policy on retiree health benefits.

– Nicole Halsey, with reporting by Elayne Demby editors@plansponsor.com