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EEOC Proposes Exemption For Retiree Health Benefit 08/08/03 Until 2000, employers were allowed to alter, reduce, or eliminate an employer-sponsored retiree health benefits plan, once a participant became eligible for federal or state sponsored retiree health benefits, without violating the Age Discrimination in Employment Act of 1967 (“ADEA”). The Third Circuit Court of Appeals changed this universal acceptance by holding that the coordination of benefits violated the ADEA because it allowed younger retirees to receive superior health coverage, and resulted in different treatment of employees with respect to health benefits. Erie County Retirees Association v. County of Erie, Penn., 220 F.3d 193 (3rd Cir. 2000). Under the auspices of the Equal Employment Opportunity Commission’s (“EEOC”) authority under 29 U.S.C. § 628, the federal agency has proposed an exemption to the ADEA in an attempt to salvage retiree health benefits programs. If adopted in full, the exemption will permit employers to offer health benefits programs to retirees, and lawfully alter, reduce, or eliminate the program when the retiree participant becomes eligible for federal or state health benefits. The proposed exemption will become effective on the date of publication of a final rule in the Federal Registry, and will apply to existing and newly created health benefits programs. Notably, an employer is not obligated to provide retiree health benefits under the ADEA, but an employer that does provide such benefits is not required to provide the benefits indefinitely, absent a contrary contractual agreement. All written comments on the EEOC’s proposed rule should be directed to:
Frances M. Hart, Executive Officer *****
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