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Interesting Ruling (on retiree health benefits) yesterday.
Old 12-27-2007, 08:03 AM   #1
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Interesting Ruling (on retiree health benefits) yesterday.

http://www.nytimes.com/2007/12/27/wa...retire.html?hp
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Cutting Retiree Insurance
Old 12-27-2007, 08:41 AM   #2
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Cutting Retiree Insurance

Cutting Retiree Insurance
In Order to Save It

By JOSEPH SCHUMAN
THE WALL STREET JOURNAL ONLINE

Amid the post-Christmas Washington lull, the U.S. Equal Employment Opportunity Commission yesterday issued a "final rule" exempting employers from age-discrimination regulations if they cut benefits for retirees when they're old enough to get help from Medicare.

The EEOC said the rule would support companies' longstanding practice of coordinating their retiree-health-care benefits with Medicare, the federal medical-insurance program for senior citizens. And Commission Chair Naomi Earp said in a statement that the EEOC was trying "to preserve and protect" employer-provided programs that are increasingly threatened by soaring health-care costs that discourage companies from covering their workers. "Implementation of this rule is welcome news for America's retirees, whether young or old," Ms. Earp said. But AARP and other activist groups representing older Americans didn't see it that way, as the New York Times reports. "This rule gives employers free rein to use age as a basis for reducing or eliminating health-care benefits for retirees 65 and older," AARP lawyer Christopher Mackaronis tells the Times.

AARP took the EEOC to court in 2004 after the commission first issued a rule exempting employers' retiree-benefits programs from the 1967 Age Discrimination in Employment Act, as the Kansas City Star explains. A U.S. appellate court had ruled in 2000 that the age-discrimination law required companies to treat former workers aged 65 years and older the same as younger retirees. That ruling upset employers -- which argue younger retirees need more help since they can't get Medicare -- and some unions, including the AFL-CIO, which view a more flexible reading of the law as a way to maximize employee-health-care coverage in the face of rising cost pressures. The EEOC said yesterday that no federal law requires employers to provide health benefits in the first place, as the Times points out. In June, another federal appellate court backed the EEOC's assertion that it could exempt retiree-health-care plans from age-discrimination rules if such policies serve the public interest. And the result was yesterday's new rule.

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Old 12-27-2007, 01:48 PM   #3
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Wow - I am suprised this article has not generated more comments from this forum! Am curious what those closer to age 65 have to say....
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Old 12-27-2007, 02:25 PM   #4
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For those who don't want to read the article the EEOC has ruled that it is permissible for companies to offer two tier health insurance systems for employees and retirees. They can drop or reduce the benefits at age 65 when Medicare kicks in. Given a US system of non-mandatory, employer based health insurance it is no surprise.
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Old 12-27-2007, 02:27 PM   #5
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How about someone combing this thread with the one before it.
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Old 12-27-2007, 04:37 PM   #6
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Quote:
Originally Posted by donheff View Post
How about someone combing this thread with the one before it.

Done
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Old 12-27-2007, 06:44 PM   #7
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I am imagine Ford and GM are delighted with this ruling.
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Old 12-27-2007, 09:31 PM   #8
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This is basically the system I retired under in September. DW is over 65 and was covered under the company plan as long as I was working.

When I retired DW had to change to Medicare and I could continue under the company healthcare plan till 65 when I have to change to Medicare. The company plan does offer a Medicare Compliment which is basically the Medicare drug plan.

While I was working our combined healthcare costs were $120/month. When I retired the retiree coverage went to $150/month per person under 65 and $75/month per person for the Medicare Compliment plan. Right now our combined monthly costs are $325 which includes Medicare coverage for DW.

I can see where some people over 65 with full company coverage after retirement may be seeing a cost increase.

As a side note, two years ago mini-megacorp discontinued retirement healthcare coverage for all new hires. So sometime in the future retiring before 65 is going to get expensive.
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Old 12-27-2007, 10:21 PM   #9
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I guess my surprise is that the Megacorp I retired from has been doing this for years. If you have 75 points (age plus seniority) when you retire, you can enroll in the retiree health plan which is similar to the active employee health plan, but your cost is much higher. Later, at 65, you must switch to the over-65 health plan which is really a Medicare Supplement type plan. The cost is less but Medicare is your primary coverage.
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Old 12-28-2007, 09:30 AM   #10
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My Megacorp has had this in place for as long as I can remember. At 65 Medicare becomes Primary, company insurance becomes gap insurance, and then only up until age 70 when company insurance stops all together.
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Old 12-28-2007, 11:43 AM   #11
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I guess if I was a business owner and had to make health care costs equal for under 65 and over 65 I would reduce the under 65 costs .
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Old 12-28-2007, 09:58 PM   #12
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Currently megacorp helps cover the cost of health benefits - but can cut it at any time (except union employees). I guess it is only a matter of time before they cut out this benefit.
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Old 12-29-2007, 09:37 AM   #13
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I read about this change in the paper yesterday. It will not change anything for me. These are the terms that I retired with anyway. My health coverage will continue until I am 65 and then it ceases when medicare kicks in. I have been retired almost three years now and I am 58. Ten years of health insurance covered was a wonderful deal for me and I will never complain. I pay only a couple of hundred dollars a month. I know many my age that say they can't retire because they can't afford the insurance.
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Old 12-29-2007, 09:44 AM   #14
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I read about this change in the paper yesterday. It will not change anything for me. These are the terms that I retired with anyway. My health coverage will continue until I am 65 and then it ceases when medicare kicks in. I have been retired almost three years now and I am 58. Ten years of health insurance covered was a wonderful deal for me and I will never complain. I pay only a couple of hundred dollars a month. I know many my age that say they can't retire because they can't afford the insurance.

I'm one of those waiting to get to 55 (in 2 years 2 months) to get the company health insurance in retirement before Medicare. Hopefully they won't change their policy anytime soon.
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