Most Americans Say No to EEOC Benefits Rule
By: Source: AARP Bulletin Today Date Posted: 2004-06-04 10:25:00-04:00
A national survey released last month found that 73 percent of people age 50 and older disagreed with the April decision by the U.S. Equal Employment Opportunity Commission that allows employers to scratch health benefits for retirees at age 65 without violating age discrimination laws.
Those ages 50 to 64, who would be favored by the new EEOC decision, were slightly more likely to disagree with it, according to an AARP survey of 3,142 people.
The EEOC rule, which could go into effect this month, would let employers stop supplementing Medicare for retirees beyond age 65, even if they offer a better health care package to younger retirees.
Advocates for older and disabled Americans, including the American Association of People with Disabilities, the National Association of Retired Federal Employees and AARP, have come out swinging in an effort to reverse parts of the ruling and preserve supplemental health insurance for older retirees.
"This rule sends a clear message to employers," says Michael W. Naylor, AARP's director of advocacy. "It says they can be as generous as they want when offering benefits as an incentive for early retirement—and can forget about health benefits when their retirees reach age 65."
Nearly 12 million Medicare-eligible retirees have employer-sponsored policies, which typically cover prescription drugs and other benefits not covered by the federal program. Under the new rule many retirees could lose those supplemental benefits, Naylor says, at a time of life when they may need them most.
EEOC Chairwoman Cari M. Dominguez sought to assure retirees that the commission was "acting to safeguard ... benefits" by making it easier for employers to afford retiree health plans.
Employers are not legally bound to provide health benefits. They may cover workers but not retirees.
But a federal court ruled in 2000, in a case involving Erie County, Pa., retirees, that employers who offered benefits for early retirees had to ensure comparable coverage for older retirees. That meant supplementing Medicare if necessary to bring older retirees' benefits up to par.
Employers nationwide denounced the court ruling. If held to such a strict standard, most companies "would do exactly what the employer did in the Erie County case," says James A. Klein, president of the American Benefits Council, "which was to ratchet back benefits for [early retirees]."
Labor unions back the EEOC decision. "The early retirement benefit is something that our members prize highly," says Bill Cunningham, a lobbyist for the American Federation of Teachers.
Even so, the AARP survey found that union members were as likely as nonunion respondents to disagree with the EEOC's decision.
If negotiations fail to produce protections for older retirees, Naylor says, AARP will take the matter to court. "The EEOC exceeded its authority," he says. "Its job is to prevent discrimination. Making health policy is a job for Congress."
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