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Harpham v. City of Dublin

Settlement in Age-Based Health Care Policy Case Restores Benefits to Older Workers

    

 

AARP Foundation Litigation attorneys represented an older worker challenging his employer-provided health care plan because it provided more generous benefits to younger workers. A settlement restored the worker’s benefits and changed the health care plan policy.

Background

In 2010, the City of Dublin, Ohio, changed its employee health care plan from one in which it paid 100 percent of employee medical expenses to a high deductible plan requiring co-payments. To compensate its employees, the city provided tax-protected Health Savings Accounts (HSA) through which employees could set aside money for medical care and implemented a program that provided annual incentive payments of up to $3,450 per family to encourage healthy choices.

Ray Harpham applied for the healthy choice program and was informed he qualified for seven of eight possible incentive payments. However, he learned he was ineligible to receive incentive payments into an HSA because under federal tax guidelines contributions cannot be made to HSAs for individuals “entitled to benefits under Medicare.” While not fully enrolled in Medicare as his primary health care plan, Harpham was automatically enrolled in Medicare Part A — the hospitalization portion — because of his age and receipt of Social Security benefits. The city was unaware of this problem for over age 65 employees until Harpham asked if the city could help resolve it.  However, the city refused to consider alternatives and Harpham was told that the decision was based on administrative inconvenience, not cost.

This left him with two very unsatisfactory options: disenroll from Medicare Part A, which also requires disenrolling from Social Security and repaying all the benefits previously paid, or fully enroll in Medicare, which would require the payment of premiums that he would not have to pay under the city’s plan.

Because of the city’s refusal to take any corrective action, Harpham’s younger coworkers received thousands of dollars more in annual health care-related compensation than Harpham and similarly situated older workers. Harpham filed a lawsuit under the Age Discrimination in Employment Act (ADEA) alleging that the city intentionally discriminated against older, Medicare-eligible employees by refusing to provide them the same incentive payments that younger employees received. The ADEA requires employers to either provide equal benefits to older and younger employees, or in cases where the cost of providing a benefit increases with age, the employer must expend the same cost to provide the benefit to older and younger workers. AARP Foundation Litigation and cocounsel Frederick Gittes and Jeffrey Vardaro of the Gittes Law Group of Columbus, Ohio, represented Harpham. The settlement of the case in February 2013 restored Harpham’s benefits and changed the plan so that workers eligible for Medicare are no longer denied benefits.

What’s at Stake

Policies that deter older workers from applying for or continuing to work fly in the face of the language and intent of federal and state age discrimination law.

Case Status

Harpham v. City of Dublin was before U.S. District Court for the Southern District of Ohio.

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Our legal advocacy initiatives  - conducted by AARP Foundation Litigation (AFL) - reflect more than 15 years of work in federal and state courts across the country. Through our efforts, we support the Foundation’s four priority areas: Hunger, Income, Housing and Isolation, and ensure that those 50 and older have a voice in the laws and policies that affect their daily lives.