<nobr>Feb 10, 2005</nobr>

Court Grants Temporary Injunction Against Erie County Rule

A federal judge granted the American Association of Retired Persons (AARP), on February 4, a temporary injunction to prevent the Equal Employment Opportunity Commission (EEOC) from issuing its regulation exempting the coordination of retiree health benefits with Medicare benefits from the Age Discrimination in Employment Act (ADEA).

In its motion, filed in the U.S. District Court for Eastern District of Pennsylvania, AARP alleged that EEOC would exceed its authority if it granted final approval to the rule. In defense of its position, AARP cited a 2000 opinion by the U.S. 3rd Circuit Court of Appeals that found that offering two separate packages of benefits to younger and older retirees would violate U.S. antidiscrimination laws.

ERIC called the AARP filing a "last ditch" effort that will undermine coverage for retired workers. "If employers are prohibited from coordinating their health benefits and providing a 'bridge' to Medicare, they are more likely to decrease coverage for their entire population, particularly retirees because of the increased costs of continuing employer coverage for those who are eligible for Medicare."

Cari M. Dominguez, Chair of the U.S. Equal Employment Opportunity Commission (EEOC), released a statement saying that she was "saddened and disappointed by AARP's premature legal action." She defended the rule, saying that it would safeguard existing and future health benefits for America's retirees by ensuring that the ADEA does not impede employers' ability to offer retiree health plans. "Any delay in implementing the rule will endanger vital protections for retirees."

The EEOC regulation is supported by large and small employers as well as several labor groups. The U.S. District Court for the Eastern District of Pennsylvania issued a 60-day stay. According to the order, a hearing to consider arguments on permanently banning the rule is scheduled for March 31, 2005. ERIC staff will keep members informed of further action including the possibility of filing an amicus brief in the case.

Text Files:

Court Order

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