Retiree Health Benefits Get EEOC Support

Since the Third Circuit Court of Appeals held in Erie County Retirees Association v. County of Erie that offering Medicare-eligible retirees different coverage than retirees under age 65 violated the Age Discrimination in Employment Acto of 1967 (ADEA), employer-sponsored retiree health plans have been at risk for age discrimination violations. After almost two years of study, the Equal Employment Opportunity Commission (EEOC) has announced an exemption from ADEA violations for retiree health plans that alter, reduce or eliminate health coverage when the participant is eligible for Medicare or a comparable state-provided benefit. Although many employers (especially those not in the Third Circuit) have not yet changed their retiree helath programs because of the Erie case, the EEOC's exemption will provide significant relief to employers providing retiree health coverage that stops at age 64, switches to a Medicare supplement type of coverage or otherwise offers a different level of, or option for, benefits to Medicare-eligible retirees.