<nobr>Apr 27, 2004</nobr>

ERIC: Letter to the Editor on EEOC Rule

Below is a letter-to-the-editor ERIC has submitted to several daily newspapers that ran an Associated Press story mischaracterizing the purpose and effect of the recent EEOC approval of a proposed final rule to exempt retiree medical benefits from ADEA. The newspapers we have identified thus far include: Chicago Tribune, San Francisco Chronicle, Atlanta Journal-Constitution, Seattle Post-Intelligencer, Myrtle Beach Sun News, and St. Petersburg Times. In addition, we responded separately to Robert Pear's article in the New York Times.

If there are additional newspapers that ran this or similar stories about the EEOC decision, please let me know and we will submit a letter to their editorial department. Or feel free to submit the attached letter under your name.


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April 27, 2004


Jim Heavy
Letters Editor
The San Francisco Chronicle
901 Mission Street
San Francisco, CA 94111

Dear Jim,

I am writing to express my strong concern about several misperceptions regarding current law, current employer-provided retiree health coverage, and the effect of a proposed EEOC rule that were perpetuated by an article appearing in the April 25, 2004 edition of the Chronicle titled "EEOC Approves Proposal to Cut, Eliminate Benefits for Medicare-eligible Retirees."

The article suggests that the purpose of the EEOC rule is to permit employers to cut retiree health coverage. In fact, employer provision of retiree health coverage was voluntary before the Erie County decision, and it remained voluntary after Erie County. Employers, in the face of double digit health inflation, can and have been effectively forced to reduce or terminate retiree health coverage in order to comply with the Erie County decision. The EEOC rule creates no new right to reduce or terminate coverage that did not already exist, but it does provide urgently needed relief from the only economically viable option employers have to comply with the Erie County decision – to reduce or terminate coverage for retirees who are not Medicare-eligible.

Since the real impact of the rule will be to preserve employers' ability to maintain the coverage they have offered in the past, rather than reduce or terminate it in order to comply with a misinterpretation of the ADEA that subverts the clear intent of Congress, the article should have been titled “Commission to Save Retiree Health Coverage from Errant Court Decision.”

Regards,

Mark J. Ugoretz
President,
The ERISA Industry Committee
(202) 789-1400

The ERISA Industry Committee (ERIC) is a non-profit association committed to the advancement of employee retirement, health, and welfare benefit plans of America's largest employers and represents exclusively the employee benefits interests of major 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 cost and their effectiveness, as well as the role of those benefits in the American economy.

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