<nobr>Apr 22, 2004</nobr>

ERIC Applauds EEOC Approval of Rule to Exempt Retiree Health Benefits Under ADEA

The ERISA Industry Committee (ERIC) today lauded the Equal Employment Opportunity Commission (EEOC) for approving an exemption from the Age Discrimination in Employment Act (ADEA) that permits employers to coordinate post-employment health care coverage with Medicare, thereby providing relief from the Erie County court ruling by the Third Circuit Court of Appeals.

Mark J. Ugoretz, President of ERIC praised the Commissioners' vote that recognizes the harm already done to retirees as a result of the Erie County decision, and the potential harm to many more that will result if relief is not granted.

“Today’s action is an important victory for retirees – especially pre-Medicare eligible retirees ages 50 to 64 – and the employers who wish to continue to provide them with post-employment health care coverage,” Ugoretz said. “We have cleared a major hurdle on the way to securing much needed relief, and urge the interagency review process to proceed quickly.”

Ugoretz also expressed concern over the continuing misperception of the economic effect of the Erie County case by AARP and others who continue to oppose the exemption. Erie County gave employers two choices: (1) provide equal benefits to pre- and post-Medicare eligible retirees, which results in a windfall to post-Medicare eligible retirees because their employer coverage in addition to Medicare gives them greater total coverage than the employer-only coverage pre-Medicare retirees would receive. The employers other choice would be to significantly reduce or eliminate retiree health coverage altogether.

“Employers simply can not afford to comply with Erie County by topping up coverage for post-Medicare eligible; the only economically feasible option is to reduce coverage for pre-Medicare eligible retirees or drop retiree health coverage entirely,” Ugoretz said. “The exemption solves that dilemma.”

To arrange an interview with Mark Ugoretz, please contact Doug Baj at (202) 789-1400 or dbaj@eric.org.

Back to Previous Page