House Panel Hears Concerns About EEOC Rule on Retiree Health Benefits
A recent federal court decision that employers must provide the same health benefits to all retirees "could jeopardize retiree health care benefits," witnesses testified on Thursday before the House Education and the Workforce Subcommittee on Employer-Employee Relations, CQ HealthBeat reports (CQ HealthBeat, 4/28).
In March, Federal District Court Judge Anita Brody in Philadelphia blocked a new rule that would have allowed employers to reduce or eliminate health benefits for retirees ages 65 and older but would have continued to provide such benefits to younger retirees. The rule, issued by the Equal Employment Opportunity Commission and scheduled to take effect in April, would have allowed employers to eliminate health benefits for retirees after they became eligible for Medicare.
AARP in February filed suit to block the rule over allegations that it would have exceeded EEOC authority. AARP cited a 2000 decision by the 3rd U.S. Circuit Court of Appeals that found different benefits packages for younger and older retirees would violate U.S. anti-discrimination laws (California Healthline, 3/31).
EEOC has asked the Department of Justice to appeal the March decision, and subcommittee Chair Sam Johnson (R-Texas) on Thursday said that DOJ officials have indicated they will file an appeal. Johnson and Rep. Robert Andrews (D-N.J.) said that they will introduce legislation to address the issue in the event DOJ does not appeal the decision or loses the case.
Steven Spencer, an attorney who testified on behalf of the U.S. Chamber of Commerce, said that the 2000 decision could place retiree health benefits at risk because employers might have concerns about potential lawsuits over alleged differences in benefits packages for younger and older retirees. According to Spencer, without the EEOC rule, "plan sponsors will either terminate their retiree health plans or structure them in a way that reduces the level of benefits to early retirees while producing no additional benefits to Medicare-eligible retirees" (CQ HealthBeat, 4/28).