Final Equal Employment Opportunity Commission Rules on Retiree Health Plans and the Age Discrimination in Employment Act

Publication Date: November 2004

Publisher: Library of Congress. Congressional Research Service

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Research Area: Health

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Abstract:

Under the Age Discrimination in Employment Act (ADEA), the Equal Employment Opportunity Commission (EEOC) has authority to issue reasonable exemptions the Commission finds "necessary and proper in the public interest." 29 U.S.C. § 628. Recently, the EEOC approved a narrowly-drawn exemption, for circulation to other federal agencies, to permit the practice of coordinating employerprovided retiree health coverage with eligibility for Medicare. The proposed final rule states that it is not a violation of the ADEA to alter, reduce or eliminate health benefits for retirees when the participant becomes eligible for Medicare or comparable state health benefits. An Appendix to the final rule makes clear that the exemption is also intended to apply to dependent and/or spousal health benefits that are included as part of the health benefits provided to retirees. However, dependent and/or spousal benefits need not be identical to benefits provided to retirees, and may be altered, reduced, or eliminated, regardless of how corresponding benefits for retirees are treated. No other aspect of ADEA coverage, or other employee benefits, are affected. The ADEA exemption is intended to apply to existing and newly-created employer-provided retiree health plans from the date of publication of a final rule in the Federal Register.