The U.S. Equal Employment Opportunity Commission
|August 20, 2001|
__________________ ________________________________________ Date Cari M. Dominguez Chair
The Commission wishes to study further the relationship between certain employer practices regarding the provision of retiree health benefits and the Age Discrimination in Employment Act (ADEA).(1) One such practice is the provision of retiree health benefits only until Medicare eligibility is attained. Another such practice is the reduction of retiree health benefits to Medicare-eligible retirees such that the total of the employer provided medical benefits and the retiree's Medicare benefits is less than the medical benefits that the retiree received before becoming Medicare eligible. Though it is clear that "Medicare carve-out" plans that simply deduct from the benefits provided to Medicare eligible retirees those benefits that Medicare provides do not violate the ADEA, additional review is needed to assess other types of retiree health plan practices.
To enable the Commission to conduct this assessment, it is withdrawing Section IV (B) of the EEOC Compliance Manual Chapter on "Employee Benefits." The Commission is also deleting the Example regarding retiree health benefits in Section II (B) of the Compliance Manual Chapter.(2)
1. The Commission's position on employee health benefits remains unchanged. An employer must offer to current employees who are 65 or over -- that is, who are at or over the age of eligibility for Medicare benefits -- the same health benefits, under the same conditions, that it offers to any current employee under the age of 65.
2. The text of the deleted Example reads:
"Employer B provides health insurance for its retirees but eliminates that coverage once the retirees become eligible for old-age benefits under Medicare. Because eligibility for these Medicare benefits is tied to age, Employer B's plan treats retirees differently on the basis of age."
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