<nobr>May 17, 2004</nobr>

ERIC Statement on the Need to Preserve the EEOC Rule to
Exempt Retiree Benefits from ADEA

Washington, D.C.-- “The ERISA Industry Committee (ERIC) strongly supports the EEOC exemption affirming that the Age Discrimination in Employment Act (ADEA) does not apply to employers that coordinated retiree health benefits with Medicare. Congress should resist any legislative efforts to overturn this proposed final rule.”

“The EEOC exemption advances the public interest, and especially the interests of older workers and their families, by assuring that this vital source of retiree health benefits is not jeopardized. If legislation is enacted that overturns the exemption, it is highly unlikely that any employer would be able to maintain equal benefits to Medicare eligible retirees and would opt for reduced benefits to pre-Medicare eligible retirees and active employees.”

“The EEOC rule was developed in response to a controversial court ruling issued by the Third Circuit Court of Appeals. In Erie County Retirees Assn. v. Erie County, the court held that coordination of benefits with Medicare is barred by the ADEA. ERIC and many others have long maintained that the court’s decision is not only wrong but would result in a substantial decrease and even elimination of many employer-provided retiree health benefits to pre-Medicare eligible retirees – precisely what happened to employees of Erie County, Pa. and precisely what Congress explicitly sought to avoid.”

“Employer-sponsored retiree health care plans provide critically needed health care coverage to some 10 million retirees and their families. The EEOC rule protects these retirees against the only economically viable option employers would have under the Erie County decision – to reduce or terminate coverage for retirees who are not Medicare-eligible.”

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