Compliance September 20, 2005

Michigan Retiree Health Benefits Suit ERISA Preempted

September 20, 2005 (PLANSPONSOR.com) - A Michigan federal judge has ruled that retirees can't sue their former employer in state court over a program requiring only younger retirees to pay part of their health coverage costs under a retiree health plan.
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US District Judge Paul Gadola of the US District Court for the Eastern District of Michigan ruled that the Employee Retirement Income Security Act (ERISA) preempts the reverse discrimination suit filed by plaintiffs Cheryl Williams and Ellice Johnson against DTE Energy Co., BNA reported.

Gadola ruled that the lawsuit brought under Michigan’s Elliot-Larsen Civil Rights Act related to the ERISA-governed retiree plan. That’s why the claim must be filed under ERISA, the court said. Although the state discrimination claim did not refer to the plan, the retirees sought to apply the state discrimination law to the plan to recover benefits, the court said.

Retired DTE Energy employees younger than 55 years of age paid 15% of the cost for health care, while those 55 and older didn’t pay any cost.

The case is Williams v. DTE Energy Co., E.D. Mich., No. 01-40328, 8/30/05.

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