EEOC Revokes Stance That Health Plans Discriminate If Retiree Benefits Change Upon Medicare Eligibility

In an August 20, 2001 release, the Equal Employment Opportunity Commission ("EEOC") retracted its position that employee benefit plans that either end or reduce benefits when a retiree becomes eligible for Medicare violate the Age Discrimination in Employment Act ("ADEA"). Recognizing that its previous policy could have the practical effect of discouraging employers from providing health care benefits for its retirees before they become eligible for Medicare, the EEOC has established an internal task force to study the issue and obtain input from interested stakeholders (i.e. employers, insurers, advocacy groups). For now, the EEOC will no longer litigate "Medicare bridge" cases. The EEOC re-emphasized its position that "An employer must offer to current employees . . . over the age of eligibility for Medicare benefits the same health benefits, under the same conditions, that it offers to any current employee under the age of 65."