Lawmakers React To EEOC Rule on Employer Health Benefits for Older Retirees
Lawmakers have begun to react to a "politically sensitive" ruling by the Equal Employment Opportunity Commission to allow employers to reduce or eliminate health benefits for retirees when they become eligible for Medicare coverage at age 65, CQ Today reports (Schuler, CQ Today, 4/26). On Thursday, the EEOC voted 3-1 to approve the rule, which states that employers who reduce or eliminate health benefits for Medicare-eligible retirees do not violate civil rights law on age discrimination. In addition, the decision allows employers to reduce or eliminate health benefits for retirees who are eligible for state-sponsored health benefits similar to Medicare. The EEOC decision reverses its prior policy, as well as an August 2000 ruling by the 3rd U.S. Circuit Court of Appeals stating that federal law requires employers to ensure that pre- and post-Medicare-eligible retirees receive health benefits of "equal type and value." The EEOC said that it had the power to make "reasonable exemptions" in the public interest to the Age Discrimination in Employment Act of 1967. The new rule states that "in order to ensure that all retirees have access to some health care coverage, employers and unions may provide retiree health coverage to only those retirees who are not yet eligible for Medicare," adding, "They also may supplement a retiree's Medicare coverage without having to demonstrate that the coverage is identical to that of non-Medicare eligible retirees." A preamble to the rule states that it "is not intended to encourage employers to eliminate any retiree health benefits they may currently provide." The ruling must still undergo comment from several federal agencies and review by the Office of Budget Management, but it is expected to stand. Three Republican members of EEOC voted in favor of the new rule, while a Democrat opposed it (California Healthline, 4/26).
John Rother, policy director for AARP, which does not support the ruling, said, "We lost at the EEOC, but the issue may well find its way to ... Congress before too much longer." However, according to CQ Today, many "lawmakers appear to be in no hurry to intervene," believing that forcing employers to pay as much for older retirees as for younger retirees would cause employers to provide less coverage for all retirees. Many legislators from both parties believe the EEOC ruling will provide better health coverage for retirees, CQ Today reports. House Education and Workforce Committee Chair John Boehner (R-Ohio) and Reps. Robert Andrews (D-N.J.) and Sam Johnson (R-Texas) sent a letter to the EEOC in December in support of the new rule. In addition, CQ Today reports that lawmakers tried to address the issue last year when Senate Health, Education, Labor and Pensions Committee Chair Judd Gregg (R-N.H.) backed language in the Senate-passed Medicare legislation similar to the EEOC rule. However, the language was dropped to gain AARP support for the final bill, according to CQ Today. Some lawmakers have "expressed concern" about the EEOC decision and have said they will investigate, CQ Today reports. "I'm extremely troubled by the action of the EEOC, and the impact it's going to have on adequate health care coverage for America's seniors," Rep. Henry Waxman (D-Calif.) said. He added that Medicare-eligible retirees should not have to lose some of their employer-sponsored health coverage to prevent employers from reducing health benefits for younger retirees. Danny Weiss, a spokesperson for Rep. George Miller (D-Calif.), said, "Miller's concern is that any steps that might indicate to employers that they can get out of their responsibility on health care is potentially damaging," adding, "But it is a complicated issue and we're taking [a] closer look at it" (CQ Today, 4/26).
Several broadcast programs reported on the EEOC rule:
- ABCNews' "World News Tonight": The segment includes comments from EEOC Chair Cari Dominguez and Michael Naylor, director of advocacy for AARP (Reynolds, "World News Tonight," ABCNews, 4/23). The complete transcript is available online.
- CBS' "Evening News": The segment includes comments from David Certner of AARP and EEOC Commissioner Leslie Silverman ("Evening News," CBS, 4/25). The complete segment is available online in RealPlayer.
- MPR's "Marketplace": The segment includes comments from Joan Bernstein, president of the Older Women's League, and Paul Dennett, vice president for health policy at the American Benefits Council (Scott, "Marketplace," MPR, 4/23). The complete segment is available online in RealPlayer.
- NBC's "Nightly News": The segment includes comments from James Klein of the American Benefits Council and Naylor (Reid, "Nightly News," NBC, 4/23). Complete video of the segment in Windows Media and a transcript of the segment are available online.
- PBS' "NewsHour with Jim Lehrer": The segment includes comments from Certner and Silverman (Warner, "NewsHour with Jim Lehrer," PBS, 4/23). The complete segment is available online in RealPlayer.
- WBUR's "Here and Now": The segment includes comments from Silverman (Young, "Here and Now," WBUR, 4/23). The complete segment is available online in RealPlayer.