New York Times Examines Debate Over EEOC Rule on Retiree Health Benefits
The New York Times on Saturday examined a new rule issued by the Equal Employment Opportunity Commission that would allow employers to reduce or eliminate health benefits for retirees ages 65 and older while continuing to provide such benefits to younger retirees (Freudenheim, New York Times, 4/30). The rule, originally scheduled to take effect in April before it was blocked by a March court decision, would allow employers to eliminate health benefits for retirees after they became eligible for Medicare.
AARP in February filed suit to block the rule, saying EEOC had exceeded its 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. Federal District Court Judge Anita Brody in Philadelphia in March blocked the rule, which prompted EEOC to ask the Department of Justice to appeal the decision.
The House Education and the Workforce Subcommittee on Employer-Employee Relations last week held a hearing to discuss the rule (California Healthline, 4/29).
AARP and others opposed to the rule say it amounts to age discrimination. However, those who support the new rule, including the U.S. Chamber of Commerce and the National Education Association, say that if employers are required to provide equal levels of benefits to young and older retirees, it will "accelerate the decline in retiree [health] benefits" by providing a disincentive to businesses to provide any coverage at all, the Times reports.
Meanwhile, employers "so far seem to be waiting to see how the debate plays out before revising their retiree health benefits," according to the Times. Kate Sullivan Hare, executive director of health care policy at the Chamber of Commerce, said, "No one is going to make any changes until this issue is resolved legally" (New York Times, 4/30).