News Releases
|
||
<nobr>Nov 12, 2003</nobr> ERIC Debunks AARP Claim that Erie County Provision in Medicare Bill Would Eliminate Health Benefits for Seniors
The ERISA Industry Committee (ERIC) warned Congress in a letter that stripping out Section 631 (the Erie County provision) in the Senate Medicare Reform Bill (S.1) and failing to include it in the final Medicare conference agreement would lead to the reduction or elimination of health coverage for pre-Medicare retirees. Opponents of the provision, led by the AARP, falsely assert that keeping the provision intact would allow employers to drop coverage for Medicare eligible retirees. # # # November 12, 2003 Dear Senator/Representative: The members of the ERISA Industry Committee (ERIC) urge your support for retaining section 631 of S.1, the Senate-passed Prescription Drug and Medicare Improvement Act of 2003, in the final Medicare conference agreement. Failure to retain this provision will leave in force an aberrant court decision that has the practical effect of forcing employers to reduce or eliminate health coverage for pre-Medicare retirees. Therefore, we urge you to support inclusion of section 631 in the final Medicare conference agreement to ensure that employers can continue to provide retiree health benefits to pre-Medicare retirees. ERIC is a nonprofit association committed to the advancement of the employee retirement, health, and welfare benefit plans of America's largest employers. ERIC's members provide comprehensive retirement, health care coverage, and other economic security benefits directly to some 25 million active and retired workers and their families. ERIC has a strong interest in proposals affecting its members' ability to deliver those benefits, their costs and effectiveness, and the role of those benefits in the American economy. The Age Discrimination in Employment Act (ADEA) has for many years been understood to permit employers to provide health benefits solely to pre-Medicare retirees as a bridge to Medicare or to coordinate Medicare-eligible retirees’ health benefits with Medicare. This understanding of the law, which is supported by explicit legislative history, has been consistently relied on by employers, State and local governments, and unions. The Third Circuit’s 2000 decision in Erie County Retirees Association v. County of Erie disregards that legislative history, holding that pre-Medicare coverage provided to bridge the gap between retirement and Medicare eligibility violated ADEA. The result of the case was that the employer was effectively forced to reduce benefits for pre-Medicare retirees without any increase in benefits for Medicare-eligible retirees. Section 631 reiterates Congress’ original intent, and prevents the Erie County decision from retroactively changing the law, by clarifying that ADEA does not prohibit an employer from providing health benefits solely to pre-Medicare retirees as a bridge to Medicare or from providing different benefits to pre-Medicare retirees than to Medicare-eligible retirees. The Equal Employment Opportunity Commission (EEOC) recently proposed a regulation that clarifies the law in the same way as section 631. The preamble to the proposed regulation very effectively explains the serious threat to retiree health coverage posed by the Erie County case. We support the proposed regulation, but recognize that the only way to permanently and clearly resolve this issue is through legislation. ERIC strongly supports this provision because it preserves an employer’s ability to provide critical health benefits to pre-Medicare retirees. Contrary to the claims being made by opponents of the provision, section 631 will not result in the reduction of benefits for Medicare-eligible retirees. Instead, section 631 will prevent a large decrease in coverage among pre-Medicare retirees because additional employers will not be forced to follow the result in Erie County. We urge you to support inclusion of section 631 in the Medicare conference agreement. Sincerely, Mark J. Ugoretz President |