The U.S. Equal Employment Opportunity Commission

The Commission met in the Clarence M. Mitchell, Jr. Conference Room (9th Floor), 1801 L Street, N.W. at 10:00 a.m, Cari M. Dominguez, Chair, presiding.

COMMISSION MEMBERS PRESENT:

CARI M. DOMINGUEZ, Chair
NAOMI C. EARP, Vice Chair
LESLIE E. SILVERMAN, Commissioner
STUART J. ISHIMARU, Commissioner

STAFF MEMBERS PARTICIPATING:

BERNADETTE WILSON, Executive Secretariat
DIANNA JOHNSTON, Assistant Legal Counsel
PEGGY MASTROIANNI, Associate Legal Counsel
ERIC S. DREIBAND, General Counsel

INDEX

Agenda

Opening Remarks -- Chair Dominguez

Administrative Matters -- Bernadette Wilson

Report on Exemption From the Age Discrimination in Employment Act -- Dianna Johnston

Commissioner Statements

Deliberations

Vote

PROCEEDINGS

10:02 a.m.

CHAIR DOMINGUEZ: Okay. The meeting will now come to order. Good morning and welcome to the U.S. Equal Employment Opportunity Commission. We're very, very glad that you're here with us this morning.

I note that Commissioner Miller is unable to be here with us today.

The purpose of our meeting today is to deliberate and vote on a proposed final rule that would exempt from the Age Discrimination in Employment Act the coordination of employer-sponsored retiree health benefits with Medicare eligibility. If the rule is approved, it will be submitted for interagency coordination. Now, let me explain what this means so that we can all be clear about what the Commission is doing today.

Our proposed final rule has to go through some additional steps before it can become final and effective. These steps occur after our vote today, and the steps are prescribed by executive orders that apply to federal agencies: Executive Order 12067 and Executive Order 12866. In very simple terms, it's really a coordination and review process that all proposed policies are required to go through to make sure that there is consistency and uniformity in the public policy process.

If the Commission votes to approve, our proposal will first go to involved federal agencies for their final review and any comments that they might have. So we have to have this interagency coordination first. Next, that process is followed by review at the Office of Management and Budget, and it's only after both parts of the process are done and all further input is considered that we can move forward with having a final rule. A rule is final when it is published in the Federal Register.

Now, we recognize that this issue is extremely important to retirees, and I want to acknowledge the outpouring of comments from retirees expressing concern about what this new policy might mean to them. We trust that this meeting will allay those concerns.

We also have received extensive and numerous comments from major organizations, such as the Society for Human Resource Management, SHRM, the AFL-CIO, the American Federation of Teachers, the National Education Association, all of which have written to express support for this rule, while AARP provided extensive comments and participated in numerous meetings expressing their opposition to this rule. We will get into more detail about the specific comments a little later.

But let me say once again that regardless of our point of view, we share a common interest, a common objective, and that is helping preserve retiree health benefits. And until these additional steps that I just delineated are completed, all these final stages of the rulemaking process are completed, there will continue to be opportunities for the AARP and other organizations and individuals to work toward our shared objective of helping to preserve retiree health benefits.

We appreciate Commissioner Ishimaru's request that this item be placed on the agenda, which allows us to have a public discourse on the matter. Let me note that in accordance with the Sunshine Act, this meeting is open to public observation.

At this time, I'm going to ask Bernadette Wilson to announce any notation votes that have taken place since our last Commission meeting. Ms. Wilson.

MS. WILSON: Good morning, Madam Chair, Madam Vice Chair, Commissioners. I'm Bernadette Wilson from the Executive Secretariat. Please excuse my voice. The pollen season has not been very considerate of my vocal chords.

During the period December 1, 2003 through April 20, 2004, the Commission acted on 38 items by notation vote, approved litigation on 16 cases, approved federal sector decisions in Robert Ganson, Thomas Masteller and Paul Suprenant v. United States Postal Service, approved an interagency agreement with the Environmental Protection Agency for Publications Distribution Services and National Call Center for Publications Request, approved a request to allow TV cameras and audio visual equipment at the December 2, 2003 and April 22, 2004 Commission meetings, approved Oracle software licenses, approved resolutions honoring Charles D. Burtner, Patricia T. Bivens, Francisco J. Flores, Paula J. Choate, Frances M. Hart, Clarice Durett Bryce, Sandra Taylor and David Guthrie on their retirement and a resolution in memory of Barbara Brice-Brown, approved questions and answers on the Uniform Guidelines on Employee Selection Procedures as they relate to the internet and related technologies, approved a training facility for the 2004 Excel Conference, approved a headquarters telephone services contract, approved the FY 2004 state and local budget allocations, approved the extension of the comment period for EEOC's interim final No Fear Act rule, and approved the continuation of expert services for Section 508, Accessibility Compliance.

CHAIR DOMINGUEZ: Is it appropriate at this time to have a motion to close a portion of the next Commission meeting?

MS. WILSON: It is appropriate at this time, Madam Chair, to close a portion of the next Commission meeting.

CHAIR DOMINGUEZ: Do I hear a motion?

COMMISSIONER ISHIMARU: So moved.

CHAIR DOMINGUEZ: A second?

COMMISSIONER SILVERMAN: Here.

CHAIR DOMINGUEZ: Is there any discussion? Having none, all those in favor, aye. Opposed?

(Commissioners all vote aye.)

CHAIR DOMINGUEZ: The ayes have it, and the motion is carried.

One of my responsibilities today is to maintain order and ensure that deliberations are not disrupted or impeded, so before we get started, I just want to review a few ground rules. We will appreciate your cooperation in complying with guidelines governing the public's conduct which are posted right outside of the room. As indicated there, questions and comments from the audience are not permitted during the meeting. We ask that you carry on any conversations outside the meeting room, and if you need to depart or reenter, that you do so as quietly as possible.

Also, please take this opportunity to turn your cell phones off -- to off or to vibrate mode. The meeting is being videotaped by EEOC for the purpose of providing a verbatim transcript of today's proceedings, which will be posted on the Commission's web site at www.eeoc.gov. Outside cameras, recording devices, other audio visual apparatus is allowed as long as it's not used in an obtrusive manner. Okay.

The proposed rule under discussion today is intended to protect the retiree health benefits of older workers by creating an exemption from the Age Discrimination in Employment Act for the practice of coordinating employer-provided retiree health coverage with eligibility for Medicare or a state-sponsored retiree health benefits program.

Specifically, employers would be permitted to provide health care coverage to retirees until they're eligible for Medicare at age 65 and to adjust that coverage when the retiree becomes eligible for Medicare or a state-sponsored equivalent.

This morning we're going to proceed as follows: First, Assistant Legal Counsel Dianna Johnston will provide a report on today's agenda item with all the background needed for the Commissioners to deliberate and vote. Then individual Commissioners may present statements for the record before we begin discussion.

At this time, I'd like to invite Ms. Johnston to come up.

MS. JOHNSTON: Good morning, Madam Chair --

CHAIR DOMINGUEZ: Good morning.

MS. JOHNSTON: -- Madam Vice Chair, Commissioners. As the Chair said, as the Assistant Legal Counsel for Title 7 and the Age Discrimination Act, I am here today to explain the background and circumstances that have led to this proposed rule.

In January of --

CHAIR DOMINGUEZ: Could you speak into the mike?

MS. JOHNSTON: Sure.

CHAIR DOMINGUEZ: Thank you.

MS. JOHNSTON: In January of 2000, the Commission filed an amicus brief in an appeal from a district court ruling in a case, Erie County Retirees' Association v. County of Erie. The district court had held that the ADEA did not cover retirees. The Commission's brief argued that, first, retirees definitely are covered by the ADEA and, second, that basing retirees' eligibility for health care benefits on their Medicare eligibility or any criteria that was age-based was an age-based distinction that was an unlawful under the ADEA unless one of the Act's defenses applied.

Ultimately, the 3rd Circuit agreed with the Commission's position and remanded the case to determine whether the County could make out the equal benefit-equal cost defense.

Also, during the last half of 2000, the Commission issued its compliance manual chapter on employee benefits, which adopted the Erie County rule and explained how to apply it. At the same time, in response to information that many school districts in the Midwest were violating the ADEA with regard to retirement incentives and retiree health benefits, the Commission filed several directed charges against those school districts and unions.

The Commission's actions in both regards were widely criticized, particularly by affected teachers' unions, school boards and the congressional representatives of the affected districts. They argued that public school districts lack the revenue to provide retiree health benefits indefinitely and that the effect of the Commission's action would be to force them to entirely eliminate retiree health benefits or to provide a lower level of coverage to retirees under age 65 that excluded prescription drugs.

In short, the critics contended that the Commission's policy would not protect or improve benefits for persons who are eligible for Medicare but instead would cause a reduction in health benefits that would prevent employees who wanted to retire before age 65 from being able to do so.

In May 2001, the General Accounting Office issued a report on retiree health benefits finding that many employers were eliminating those benefits for a number of reasons, primarily involving their considerable cost. However, the report also indicated that the Erie County ruling may be providing an additional incentive for employers to eliminate those retiree health benefits.

As a result of the information from stakeholders and in the GAO report suggesting that the Erie County rule was having unintended consequences, the Commission decided to reexamine its position on the Erie County issue. In August of 2001, the Commission voted unanimously to rescind its prior policy and study the relationship between the ADEA and retiree health benefits.

For the next several months, the Commission's staff met with a wide range of stakeholders, including employer representatives, employee representatives, labor unions, human resource professionals, benefit consultants, actuaries, state and local government representatives. All agreed that at present, at the time, most employer-provided retiree health benefits plans could not meet the Erie County rule, and most of them predicted that employers would respond to Erie County by eliminating or lessening existing coverage for retirees not yet eligible for Medicare rather than improving health care coverage for Medicare-eligible retirees.

Indeed, that's exactly what happened in the Erie County case. When that case was finally resolved in March 2002, the net effect of the changes the County made to its retiree health benefits was that older retirees received no better benefits, and younger retirees were required to pay more for health benefits that offered fewer choices.

Of course, the Erie County decision is not the sole or even the primary reason for the declining availability of health care benefits. Cost, changing demographics and changed accounting rules, as indicated in the GAO report, have led to diminution of such benefits. However, the evidence before us indicated the Erie County rule was exacerbating the problem, the rate of the decline.

Commission staff explored alternative solutions to the problem; however, every alternative that we identified and considered either required employers to engage in such complex calculations that they would still have an incentive to just eliminate the benefits entirely rather than trying to figure out whether or not they were right or they involved reinterpreting other portions of the ADEA in a way that might have a carryover effect on other policy issues besides retiree health.

Ultimately, the Commission concluded that an exemption was the most effective way to eliminate the ADEA as a reason for further eroding the availability of retiree health benefits.

As you know, the Commission has unusually broad exemption authority under the ADEA. Section 9 of the Act provides, quote, "EEOC may establish such reasonable exemptions to and from any or all provisions of this chapter as it may find necessary and proper in the public interest," unquote. Interestingly, that language is much broader than most statutory exemptions. For example, the Real Estate Settlement Procedures Act provides exemption authority to the Secretary of HUD but only to grant reasonable exemptions for classes of transactions as necessary to achieve the purposes of that act rather than in the public interest, as our exemption authority says.

Similarly, the Secretary of Agriculture has authority to grant reasonable exemptions from organic food certifications, but that authority is limited by a requirement that the farm from which the produce originates has to be under a state-mandated emergency -- a federal- or state-mandated emergency pest control program. The EEOC's authority is much broader.

That broad language of the ADEA exemption shows that Congress recognized that there would be rare instances in which application of the ADEA's prohibition against age discrimination would be contrary to the public interest, and, accordingly, it vested the enforcement agency with authority to correct those problems.

The Department of Labor, which originally had enforcement authority over the ADEA, exempted from the Act certain programs designed to provide employment for disadvantaged -- people who had difficulties with employment, including disadvantaged youth. That kind of exemption is clearly contrary to the letter of the ADEA's prohibitions, but it was deemed to be in the public interest and has not been challenged.

Moreover, as the preamble to the rule explains, this rule is in fact consistent with the purposes of the ADEA. One of the Act's stated purposes is to find ways of meeting problems arising from the impact of age unemployment. Given the continuing decline in the availability of employer-provided retiree health benefits and the additional disincentive to provide such benefits created by the Erie County rule, this proposal reasonably addresses problems confronting older Americans.

Based on the staff's study, the Commission determined that it needed to act proactively rather than to wait until thousands or maybe hundreds of thousands of retirees had lost their health benefits because of the Erie County rule. The Commission concluded that it was necessary and proper and in the public interest to exempt from the ADEA the practice of coordinating retiree health benefits with Medicare or a comparable state-sponsored health benefit plan.

Accordingly, in July of 2003, the Commission exercised its exemption authority and published a Notice of Proposed Rulemaking. The proposed rule provided that the ADEA would not be violated when employers and labor organizations offered retirees health plan designs that incorporate Medicare or comparable state benefit programs. In other words, the proposed exemption permitted the existing practices of providing Medicare bridge plans to early retirees without necessarily providing similar benefits to those retirees who are eligible for Medicare or supplementing the retiree's Medicare coverage whether or not the ultimate coverage is identical to the coverage received by non-Medicare-eligible retirees. The NPRM did not require or encourage employers to reduce or eliminate any existing retiree health coverage.

During the comment period after the NPRM was issued, the Commission received 44 substantive comments from organizations, including 27 that supported the proposal and 17 that opposed it. It also received many comments in opposition, which I'll get to in a minute.

Many of the organizations that submitted comments in support of the exemption, though, provided information that confirmed the Commission's suspicion that application of the Erie County rule was further eroding retiree health benefits.

For example, the American Federation of Teachers, which represents 1.2 million workers, said that many school districts and public employers that had offered retiree health benefits to older workers for many years concluded that their current retiree health benefit could be challenged under the ADEA, and rather than incur additional expenses, they made the decision to end or reduce their retiree health benefits for all retirees.

In the post-Erie County period, they said, "Older workers face the reality of working until they were much older or retiring without any retiree health benefits."

The Wisconsin Association of School Boards also commented that the most common voluntary early retirement benefit in Wisconsin is employer payment of part or all of the cost of a retiree's health insurance premiums until the retiree is eligible for Medicare, which is presently age 65. Employees have sought these benefits because they're eligible for early retirement at age 57 but they're not eligible for Medicare until age 65. The current rules have led many school districts to eliminate or reduce retiree health benefits.

The Delaware Education Association, making a similar comment, applauded the EEOC's efforts to ensure that application of the ADEA does not discourage school districts across the country from providing retiree health benefits to retired teachers. Similar comments were received from the Minnesota School Board Association, the National Education Association, the Society for Human Resource Management, and the National Rural Electric Cooperative Association, which provides health care benefits to about 130,000 individuals, including 7,000 retirees said that without this clarification from the Commission many NRECA members will be forced to discontinue providing benefits to both pre- and post-Medicare-eligible retirees, effectively leaving most of the retirees with no health insurance until they become Medicare-eligible.

Now, as I said, there are several comments -- many comments in opposition. The most extensive organizational comments opposing the rule came from AARP. AARP's comments fell into four general categories. First they said that the rule was contrary to the language, history and purposes of the ADEA and did not meet the EEOC's mission of protecting or expanding the rights of older workers. Second, that EEOC didn't have the authority to enact the proposed rule; third, that the proposal was arbitrary, capricious and unjustified exercise of EEOC's authorities, particularly because it's a departure from its prior view on the issue. And, finally, that the proposed rule was inconsistent with the Administrations and Congress' emphasis on improving health benefits for retirees.

AARP argues that the ADEA allows employers to coordinate retiree health benefits with Medicare eligibility only if an employer can satisfy the equal cost-equal benefit test set forth in the statute. AARP also believes that EEOC's study of the relationship between the ADEA and the employers' retiree health care practices was inadequate and flawed and thus failed to meet the public interest standard for creating an exemption under the ADEA.

AARP challenged EEOC's conclusion that it's impracticable for employers to accurately value retiree benefits in order to satisfy the equal benefit-equal cost test. And, finally, AARP contended that the literature cited in the preamble to the proposal disproves the EEOC's contention that the Erie County ruling is causing employers to reduce or eliminate retiree health coverage since many of those studies show that employer-provided health coverage was declining before the 3rd Circuit's decision was rendered in 2000.

It's also important to note that the Commission received approximately 30,000 comments from individual citizens and 700 signatures on petitions opposing the proposal. In addition, AARP provided a list of 12,700 names of individuals who oppose the proposal. The vast majority of the 30,000 individual comments were in the form of form letters.

After reviewing all of the public comments, the Office of Legal Counsel found that the rule supporters -- many of the rule supporters provided evidence that the Erie County rule was in fact having the unintended consequence of diminishing retiree health benefits for pre-Medicare-eligible retirees and that it had not improved benefits for Medicare-eligible retirees, while opponents of the rule provided no evidence to the contrary. Thus, the staff concluded that, on balance, the evidence supported the proposed exemption.

Accordingly, the Office of Legal Counsel recommended that the Commission finalize the proposed rule with only minor clarifications. Like the proposed rule, the final rule provides an exemption form the ADEA for the practice of coordinating employer-sponsored retiree health benefits with eligibility for Medicare. The final rule permits employers and labor organizations to offer retirees a wide range of health plan designs that incorporate Medicare or comparable state health benefit programs without violating the ADEA.

The final rule is not intended to encourage employers to eliminate any retiree health benefits they may currently provide. On the contrary, this final rule is designed to ensure that the ADEA does not discourage employers from continuing to provide such benefits. By creating a narrow exemption from the prohibitions of the Act for the practice of coordinating employer-sponsored health benefits with eligibility for Medicare, the final rule removes any incentive created by our prior policy for employers to reduce or eliminate retiree health benefits.

The final rule includes a few minor clarifications to the NPRM. In response to a comment that the phrase, "eligible for" did not make clear whether an individual retiree must actually enroll in Medicare or a comparable state plan before the exemption would apply, we added the phrase, "whether or not the participant actually enrolls in the other benefit program," to Section 1625.32(b).

In response to comments concerning the scope of the exemption, the new rule includes an additional explanatory statement emphasizing that, as stated in 1625.32(c) of the rule, the exemption is to be narrowly construed. The only practice exempted by the rule is the coordination of employer-sponsored retiree health benefits with eligibility for Medicare or a comparable state health benefits program. No other aspects of ADEA coverage or benefits other than retiree health benefits are affected by the exemption. The Commission also revised Question and Answer 5 in the appendix to better reflect the scope of the exemption.

The final rule also includes a couple of minor stylistic clarifications. The word, "are," was changed to the word, "is," in one section. The change, again, was not intended to alter the definition of a comparable state health benefit plan for purposes of the exemption. And we simplified the language in Question and Answer 3 of the appendix.

The Office of Legal Counsel recommends that the Commission approve this draft of the final rule for coordination with sister agencies and the Office of Management and Budget.

CHAIR DOMINGUEZ: Thank you very much, Ms. Johnston. I'm going to ask you if you could stay - make yourself available - upon deliberations, there may be some further questions that the Commissioners may have.

But as we have heard, the Commission has really done its due diligence and has taken considerable time to conduct a full and fair review of this issue with input from a very unique alliance of groups and individuals. Again, let me once again reaffirm that we're certainly aware of anxieties and misperceptions that have taken root, and we want to wish to reassure all that the Commission is not acting to eliminate retiree health benefits.

As you heard from Ms. Johnston, we have received extensive comments, and I just wanted to also incorporate comments that we just recently heard from members of Congress urging the Commission to approve a final rule. Representative John Boehner, Chairman of the House Committee on Education and the Workforce, along with Representative Sam Johnson, Chairman, and Representative Robert Andrews, Ranking Member of the Subcommittee on Employer-Employee Relations, wrote to the Commission stating, quote, "We agree with the Commission that this clarification is needed and will help prevent Americans across the country from losing their retiree health coverage in this era of escalating costs. The Commission's final rule should clarify that the ADEA allows for the practice of providing" -- I'm sorry, "The Commission's final rule should clarify the ADEA to ensure that the practice of providing bridge coverage to early retirees will not constitute a violation of the ADEA," end of quote.

Similarly, the AFL-CIO has written to us that, quote, "A wide range of employees in both the public and private sectors stand to lose if the EEOC does not exempt such retiree health plans from the ADEA's prohibitions."

Again, these are just a few of the many comments that are on the record addressing the issue at hand, and we appreciate every one of them. I'm sure that the Commissioners, as we deliberate, may bring up some other comments.

At this point, let me turn to my fellow Commissioners and invite them to present statements. Madam Vice Chair.

VICE CHAIR EARP: Thank you. Good morning. I'd like to acknowledge my fellow Commissioners and Chair and welcome the public to our meeting today.

Normally, I would attempt my comments extemporaneously, but because our Section 9 exemption authority is so important and is so rarely used, I'm going to read my statement.

At this time, I'd like to just take a few minutes and explain why I believe the Commission should move forward with our proposed rule. We know that health benefits are very important to retirees. My own mother's best friend is currently seeking reemployment because she's too young for Medicare, and her former employer does not provide retiree health insurance. Nationally, over half of early retirees and about a third of Medicare-eligible retirees rely on their former employer to provide this valuable benefit.

Employers provide retiree health benefits in a variety of different ways. Many employers provide their retirees with a bridge to some other health care source, such as Medicare. Other employers provide retirees with health benefits to supplement insurance that they may have through some other source. This type of insurance I believe is a good thing. I believe this is very valuable, and this benefit is at risk.

Studies show that employer-provided retiree health benefits have declined steadily over the past ten years. Employers are struggling to continue providing this benefit under skyrocketing costs and accounting rule changes. In 1999, as has been stated, a group of retirees sued Erie County, Pennsylvania, arguing that an employer violates the ADEA if it reduces or eliminates retiree health benefits when retirees become eligible for Medicare. The retirees won that lawsuit -- or did they?

Most people do not know what happened to retirees in the County of Erie after the decision. As Ms. Johnston has indicated, in response to the court decision, the County reduced health benefits, generally. For early retirees, benefits were reduced and retirees were required to pay a higher premium. Since the decision, employers in many other communities around the country have done the same thing or, even worse, they have eliminated retiree health coverage all together.

How did this happen? How did a win result in a loss of health benefits for retirees all across America? The answer is simple: The ADEA does not require employers to provide retiree health benefits. It is a completely voluntary benefit. And EEOC does not have the authority to force employers to provide it, in the first instance, or to force continuation once an employer has provided health benefits in the past. Given that reality, the last thing that I want to do is make it harder for employers to provide this benefit.

I believe the Erie County decision did exactly that. I believe the decision makes it extremely difficult for employers to provide any health benefits to retirees, whether those retirees are younger or older. Since we know that retirees want and need these benefits, it seems obvious to me that Erie County is the problem and it's not the solution.

We are here today to solve the Erie problem. I don't want to see what happened in Erie County continue happening across the country. I don't want retirees losing employer-provided retiree health coverage. This hurts all retirees, whether they're older or younger.

I know that some organizations and individuals have expressed concern about the EEOC's current proposal, so before I decided that this was the right thing to do, I gave a lot of thought to it. I thought about what would happen if we did not move forward with this proposal. What would happen if we continued to take the position that employers must choose either to provide the same benefits to all retirees or no benefits at all? I am persuaded that if employers are forced to make that choice, the result will not be the one most seniors are looking for.

Our prior rule, in my opinion, is an all-or-nothing proposition. Employers must provide the same benefits or no benefits, and the rule does not come with a guarantee that employers will choose all over nothing. What the Commission has learned from a three-year review of this issue is this: If employers are forced to make a choice, all or nothing, it is likely many seniors will not receive employer-sponsored health benefits upon leaving the work force. In essence, the only thing our prior rule guaranteed was that some retirees would lose their employer-provided coverage.

The current proposal does not change the fact that employers are not required to provide retiree health benefits. Nothing in the ADEA can provide that guarantee. The proposed rule does require that employers eliminate any coverage -- the proposed rule does not require that employers eliminate any coverage they already provide to their retirees, whether they are young or old or eligible for Medicare or not. However, the rule does allow employers to coordinate whatever benefits they voluntarily provide to retirees with other available health benefits like Medicare.

This is a common practice, and this rule allows that practice to continue. It is the way most retirees receive health insurance, and that's the way it currently works. I believe this makes sense. We cannot guarantee or promise our seniors that employers will always offer retiree health benefits. What we can do is remove obvious barriers like the one Erie imposed and that I believe ADEA would not have intended. We can remove those barriers from employer-provided retiree health coverage.

I support the Commission's effort to preserve retiree health benefits, and I believe we should move forward with finalizing this rule.

CHAIR DOMINGUEZ: Thank you, Vice Chair Earp. Commissioner Silverman.

COMMISSIONER SILVERMAN: I strongly support the proposed final rule, because I think it's the right thing to do. Retiree health benefits are critically important, and I wish all employers offered them, but the fact is fewer and fewer employers do.

The reality is that for many years now employer plans have distinguished between retirees who are pre- and post-65 to coordinate their retiree health benefits with our Medicare system. Some employers have chosen to provide their retirees with health benefits that will bridge the gap between the time they retire and become eligible for Medicare, while others continue to provide health care benefits to retirees who have reached age 65, but those benefits are supplemental to the Medicare benefits.

Now one need look no further than the second sentence of the Kaiser Family Foundation's employer health benefits annual survey to confirm what I just said. It reads, "For the population ages 65 and older, retiree health benefits supplement Medicare."

So let us be clear that the Commission is not here today because we intend to create or foster a new retiree health benefits system that distinguishes based on Medicare eligibility. That system already exists, and that is the reality. Rather, we're here today because the 3rd Circuit Court of Appeals has construed a law that the Commission enforces, the Age Discrimination in Employment Act, and has made a determination that would make most of the remaining retiree health plans out there unlawful. And this decision sends a clear message to employers: Find a way to give all of your employees the exact same benefits, which is incredibly difficult, or eliminate your retiree health benefits all together.

The sad reality is that if we do not rectify this decision, more and more retirees will lose their health benefits, and these are critical benefits. While the decision in Erie County did not start the erosion of retiree health benefits, it is a significant factor advancing this negative trend.

Now, EEOC has heard from many employer groups, state and local governments and unions, including the AFL-CIO, the United Auto Workers and the American Federation of Teachers. These divergent groups have all sent us the same message, that the requirements of Erie County on top of unchecked health care inflation and changed accounting rules would simply be too much for our retiree health benefits system to bear. They will be forced to either sharply cut benefits for retirees who are not yet eligible for additional benefits under Medicare or to eliminate the retiree health benefits, leaving retirees not yet eligible for Medicare with no health coverage whatsoever.

We have also been told that the uncertainty created by the Erie decision has made it impossible for unions and employers to negotiate for health benefits for future retirees, and it's impeded efforts even to negotiate renewals of health benefits for current retirees. But, of course, there can be no more compelling evidence of the impact the Erie decision will have if we don't act decisively than the Erie case itself.

Now, as you've already heard today, the Medicare-eligible retirees who won their age discrimination case against Erie did not receive the additional health benefits that they had hoped to get. Instead, after losing the case, the County complied with the court's order by reducing the benefits early retirees were receiving and requiring them to pay a higher premium.

Now, I do not believe that such a result for our retirees, fewer health benefits at greater expense, is one that's consistent with the public interest or the intent of the ADEA. I happen to think that the legislative history here is pretty clear. When Congress restored ADEA protection to employee benefit plans, it was aware that employers coordinated their retiree health benefits with Medicare eligibility. Both Houses of Congress expressly stated that they did not intend to interfere with this practice, so employers were confident that their actions were in compliance with the ADEA. But Erie County shattered that confidence, rejecting Congress' express retiree health policy and substituting its own.

Now, the proposed final rule will restore employer confidence. It will not require, invite or incite discrimination, and it will not require any employer who now offers retiree health benefits to alter those benefits in any way. To the contrary, it will let employers, state and local governments and unions know that they may continue to offer retiree health benefits to the extent their resources allow.

In Section 9 of the ADEA, Congress gave the Commission the authority to establish reasonable exemptions from the law to address unintended consequences when "necessary and proper in the public interest". While the Commission has exercised this authority on only the rarest of occasions, the ability to grant an exemption when it is needed is an important responsibility that the Commission should not shirk or ignore. And this is one of those rare occasions. We must ensure that public and private employers as well as unions can continue to lawfully coordinate their retiree health benefits with Medicare eligibility. For this reason, I believe it would be irresponsible for the Commission not to move forward with our proposed final rule. Thank you.

CHAIR DOMINGUEZ: Thank you very much, Commissioner Silverman. Commissioner Ishimaru.

COMMISSIONER ISHIMARU: Thank you, Madam Chair. I want to thank you for calling today's meeting. It was promptly and courteously set up. I truly appreciate that.

I welcome our guests this morning to a Commission meeting talking about a very technical issue on the one hand and a very fundamental issue on the other. And I also want to thank our staff, the staff at the Office of Legal Counsel led by Peggy Mastroianni and Dianna Johnston and Lynn Clements, who is working now for the Vice Chair but has worked on this issue. These people have done a stellar job over the last few years working a very difficult, difficult issue. And I'm certainly appreciative of all their efforts.

Like my colleagues, I take our responsibilities very seriously here at the EEOC. We have been entrusted to enforce the crown jewels of our civil rights laws involving employment, including the Age Discrimination in Employment Act. We don't have responsibility here for waging war in Iraq or protecting our homeland from attack or regulating pollutants in the air, or in the water in the case of D.C. There are many other responsibilities that other agencies have in the federal government. Ours is a very specific responsibility: Protecting people from discrimination. And in this case it's protecting people under the Age Discrimination in Employment Act.

And let us be very clear with what we're doing today with the final rule. We are sanctioning discrimination against older retirees by possible adoption of this final rule. We are delving into a fundamental issue of health care policy, an area where we should not be delving.

I don't claim to be a health care expert. As they say, it's certainly beyond my pay grade. I know far smarter minds in town have grappled with this issue, continue to grapple with this issue, and they work day in-day out trying to come up with answers in coming up with a comprehensive health care policy that will help all Americans receive adequate health care. Yet we move forward with this final rule, and, frankly, I think there are many unforeseen and unintended consequences, and it raises a number of issues.

If you look at the comments that were submitted by AARP to this rule back in September, they raise a number of questions that I do not believe have been answered. They ask whether an assessment of harm and related costs, economic, medical and otherwise, that would have been suffered by older retirees who lose or are denied access to employer-provided health benefits, whether that's been analyzed. Similarly, whether the availability, accessibility of costs of alternative policies to complement Medicare for older retirees, distinctions among states in such policies or a comparative analysis of employer-sponsored plans versus individually purchased plans has been analyzed, and assessment of the impact of the proposal may have on the Medicare system and the states, and this was written before Congress enacted the changes to the Medicare law. And on and on.

In talking to staff, I asked basic questions of who's affected by this? How many employees are affected? How many retirees would be impacted by this? How many people have in fact taken early retirement? How many people are covered? How many people come from the 3rd Circuit? How many people are covered nationwide? Who beyond the compelling case of teachers are affected by this? The teachers make a good case to me. I understand the conundrum they're in, and it's a very difficult problem, but beyond teachers who is affected?

How many senior citizens would be affected by this, having their benefits totally at risk. As my colleagues have pointed out, there is -- so much of this is subject to no leverage, that employers are entitled to provide whatever level of benefit they choose to provide. How many senior citizens would be at risk because of the actions we're taking today?

Have there been any cases in fact in the four years since the Erie County decision, beyond Erie County itself, where we know where employers have reduced retiree health care benefits because of the Erie County decision? And when we looked at news sources generally, because we could not get an answer to this question, when we looked at news sources generally, a lot of employers are cutting back health care protections, but we could not find a single instance where people were citing to the fact that Erie County was the driver or even a factor in cutting out health care for retirees.

I wish before we take final action on a rule that we had answers to these what I consider fundamental questions. So I regret the fact that we are likely to take action on an issue where so many questions are up in the air, and I regret the fact that we are moving forward on an issue that raises so many fundamental anxieties in millions of Americans. Following the enactment of the Medicare law last year, people are confused and people are concerned about what this means for their future. People are concerned about the viability of Medicare for the future, given that the true costs of the program may have been withheld during the debate. I don't know where this is going to go. I'm no expert on Medicare, but it's certainly -- from reading the popular press, I'm concerned that we are taking a step here where we have very few answers and can provide very few assurances of what the future looks like.

We should also note, I think, that this Commission has taken a position on this issue in the courts, and we wrote an amicus brief in the Erie County case that I think still sums up where we should be on the law. Chip Gregory, who worked in our General Counsel's Office, who I was told was a brilliant attorney, who passed away last year, was the author of the brief, and let me just read a brief piece of that brief that I think sums up where we should be on this.

The brief said, "Health insurance benefits can be a costly employee benefit. Employers should not have their hands tied in their efforts to structure their health insurance coverage in a way that will maximize benefits for all employees, current and former. The answer to this conundrum, however, is not to arbitrarily exclude a group of individuals from the protection of the statute. The answer is for the employer either to rely upon distinctions that are not age-based or to structure any age-based distinctions in a manner that comports with the ADEA's equal cost-equal benefit rule."

Instead of passing this final rule, I think we should go back and then find a way to help employers meet this test we laid out and the court adopted in Erie County. I know we've tried to do some of this, but I know when we bring stakeholders together, we may have success in doing it again.

Finally, a number of my colleagues have mentioned the role of Congress, and a number of us have worked on the staffs of the Congress and understand the roles of Congress in this debate. Congress has tried to grapple with this issue. It continues to try to grapple with this issue. It's been unable to come to a consensus, but I would argue that it's still a viable political issue on Capitol Hill and that Congress should be the one to make major exemptions to a major civil rights law, not the Agency. Congress has this in front of them. They tried to deal with it. They were unable to. I believe it's the responsibility of the Congress to create an exemption if so warranted. We're here to enforce the law. That's our responsibility. I would urge my colleagues to vote no. Thank you, Madam Chair.

CHAIR DOMINGUEZ: Thank you very much, Commissioner Ishimaru for your very compelling and eloquent statement. We sometimes under the best intentions can win a battle but lose the war, and I think given the aftermath of Erie County, that that may have been the effect.

But at this time, let's open up the floor for deliberations.

COMMISSIONER ISHIMARU: Can I ask a question?

CHAIR DOMINGUEZ: Certainly.

COMMISSIONER ISHIMARU: One question has come up during this debate of companies that have actually taken action post-Erie County, and at least from my review of the correspondence that's come in, both during the rule-making and in recent days, I haven't seen anything that gave me specific examples where employers have changed their policy because of Erie County. Does anybody have anything on that?

COMMISSIONER SILVERMAN: From what I have heard and seen, a lot of employers have been waiting for either the EEOC, because they've been aware of the fact that we've been looking at it for three years, as well as Congress, which you know has been looking at this for exactly the same time. In fact, when I was there I was approached about this issue, so that's how long they've been looking at it. So they've been holding it off. I've been told that it takes about a year to change a plan. So in anticipating that there might be an action to fix the impact of the Erie County decision, they're holding off, even though that they know that there's legal uncertainty.

But I've also been told that it is having an impact, specifically in union negotiations for contracts. It is a factor out there, and I, that is, I think, why we've heard so strongly from unions, from the AFL-CIO, et cetera, that said this is just one more point that's tipping the scales away from us being able to keep these important benefits for our retirees.

VICE CHAIR EARP: I would note two things. Apparently, almost immediately after the Erie decision, we issued guidance to attempt to clarify, and I think that served as kind of a suspension for a number of employers that they understood that we recognized the problem, so they didn't move forward with plans to make major changes.

The other thing is that much of the information that came into us does talk about employers, if being forced into a situation where they'd have to equalize benefits for everyone, they would do the cheapest thing. I've spoken to attorneys who are both inside counsel and of counsel that essentially say the computations for equal cost-equal benefit can be so complicated, and if you're trying to use it as an affirmative defense, why, when the easier thing to do is just not to do it at all?

I understand, Stuart, and I agree with you that this is a very, very complicated issue. I guess I would take exception to the fact that we should wait for Congress to do the exemption. I'm really very pleased that we are being proactive on this as opposed to waiting.

COMMISSIONER ISHIMARU: Maybe Dianna can help us understand why it's so difficult to value the benefits that are provided under Medicare. Let me frame this for you. My experience with the health care system is basically filing claims with my insurance company, and they always ask, "Do you have any other coverage?" And for a while I was checking, "yes," because both my wife and I had coverage, but why is it so difficult to value the benefit provided by Medicare?

MS. JOHNSTON: What we learned during our meetings with stakeholders and looking at the issue is that part of the issue is that the health care delivery system in this country, as you know, is fragmented. So you have many, many, many insurance companies providing benefits, you have Medicare providing benefits, and they're all slightly different. And I think we all probably know that from our own experience if we go shopping for insurance and you try to compare. It's like, well, one has eye coverage and one has dental coverage and one has such and such a deductible, and none of them match up.

So when the employer is trying to look at am I providing an equal benefit for somebody who is covered by Medicare and they're trying to do some sort of supplemental plan as opposed to employees who are not covered by Medicare, it becomes almost impossible to have an identical benefit. It appears, what we've been told by our stakeholders, that insurers just don't provide something that would exactly mirror some employer-provided plan, not to mention the fact that every employer-provided plan is different.

And so for that reason and because we actually looked into -- we tried to look for broader statistics about value of Medicare and with input from, for instance, the Academy of Actuaries, tried to gather some information that would say, well, is there some number we can put on Medicare or other kinds of health care benefits. And, frankly, there just does not seem to be any one place that that kind of data is readily available.

COMMISSIONER ISHIMARU: I know plans differ in what they offer, and I know that the market, at least to this point, the health insurance market has not had to offer a product like this, but if you're looking for a certain level of coverage, just like we have in our federal health care benefits that are available to all federal employees, that program lists for us every year during our open season we can look at a glance to see the various levels of coverage that's provided by the competing plans.

Why couldn't we do a similar look here to see whether that comprehensive coverage is provided up to this level and that mental health coverage is provided up to this level and that well-care, child care coverage is provided up to this level? Were you looking at the microview or the macroview when you were analyzing this?

MS. JOHNSTON: Well, again, I'm not sure that -- I mean some of those suggestions sound more like our trying to establish some level of correct health care coverage, which, as you've pointed out, we are not in the business of doing. All we can do is determine whether there is discrimination and equality in the level of benefits.

COMMISSIONER ISHIMARU: But --

MS. JOHNSTON: Go ahead.

COMMISSIONER ISHIMARU: But if you were comparing pre-65 versus post-65 coverage, that's the only thing you're doing for our purposes, to see whether the post-65 coverage with Medicare and whatever else may be added was basically the same as the pre-65 coverage.

MS. JOHNSTON: The best answer I can give you, Commissioner Ishimaru, is that based on our conversations with the experts, they were not able to provide us with that kind of information. We specifically did ask for that kind of information, and they were not able to provide it to us.

CHAIR DOMINGUEZ: And, again, I could just reaffirm that when faced with having to make those determinations, oftentimes employers will just opt for not providing it. And that's what I meant earlier on. I am concerned by going to this continued practice, employers will continue to say, "Well, it's just too much of a headache. We're just going to drop it all together."

And while, as Commissioner Silverman has stated, that the ADEA may not be the only factor, clearly escalating costs and the cost of health care, certainly the position that we have taken just recently, because what we're trying to do with this rule is to bring us back to the practice that we had prior to the year 2000, which is a very simple understanding that employers had that up until you're 65 you can provide bridge plans. After you're 65, you can supplement any way you want with Medicare eligibility. You can supplement. It's not dropping the plans. It's to supplement those plans and not have the fear of running afoul of the law. And I think that's very, very simple.

There's a perception that we're worried about the pre-65 and not the post-65 and that's totally untrue. Our concern is that we give employers the flexibility because benefits, as we all know, is the single most term, if you will, and condition of employment that working Americans are now interested in. The biggest issue negotiating is what about benefits? I hear it all the time. They have a good benefits program. And if we don't give employers the flexibility to put recruitment programs, to put retention programs - the reason employers can retain the best and the brightest in their work force oftentimes has to do with the quality of the benefits program that they have. And if we tie their hands behind their back by not allowing them to do this and to have this specter of a violation continue to hover over them, I really think we're doing a tremendous disservice to the working men and women of our nation. And that is as simple as I can put it. This is not about discrimination. This is about enhancing and giving employers that opportunity.

COMMISSIONER SILVERMAN: I mean I could give you a more technical explanation if you want, because I have it right here, of what was said. I mean we know that many people have tried to apply the equal cost-equal benefit and knowing our Office of Legal Counsel as I do, I suspect -- can you hear me? Is my microphone on? Okay. Knowing our Office of Legal Counsel as I do, I suspect they tried everything they could, but my understanding is that it has to be accurately determined for each employer's Medicare-eligible retiree, and it will vary considerably by geographic area, age, gender, income level, past occupation and other demographic factors. And it also could vary by Medicare plans elected by retirees, the valuation of what they pick and how do we decide what that value is?

And another problem is that the government's costs may not reflect what the employer would have to pay for the same benefit. So all of this factored together, that's why we're hearing from this divergent group of people saying, "Your test sounds good, but it's just impracticable to apply here. We can't seem to do it."

CHAIR DOMINGUEZ: I hate to bring this up but one of my earlier careers was in executive benefits. I used to manage the executive benefits program for a major employer, and that's when we went into the cafeteria plan concept, because we had younger workers, middle-aged workers, and they all had different needs. And to try - even for one employer - to try to figure out the cost had to be handled on an employee-by-employee basis, because you had to figure out exactly what did this employee choose and then make some comparisons. It was a very tedious -- we created a cottage industry when we went there because we had all these outside benefits consultants and all that, and even so we didn't get it right. But it really is, it's just a very laborious process to handle.

VICE CHAIR EARP: I would just add one thing that in my own personal experience subjectively added to all the complexity that Commissioner Silverman has mentioned is that when you look at the various plans, the person individually values whether or not a PPO, for example, is better than an HMO. I've dropped really good plans when my pediatrician moved to a practice that wasn't covered by the other one, and I think that we cannot be in the business of helping any worker figure that out.

COMMISSIONER ISHIMARU: But I also think that we may overstate the problem, that in coming up with equivalence, whether something is of equal benefit to a person, does not have to come down to this very complex matrix that Commissioner Silverman raised. I think you could look at it that way, but I think you could also look at it in a broad brush measure to see whether in fact the plan that is provided to one group is basically equivalent to the plan provided by the other group.

And you could bring it down to levels of a complexity, but you can also look at it from a broad brush, and I would hope that we could spend more time to figure out whether there is some way of doing it. And I appreciate all of the hard work that has gone on, and I know that a lot of far smarter minds than I have been working on this issue, but I would assume that there is a way in this debate that we could go back to the table and try to figure out a way that would work so we don't discriminate against people who -- against older retirees.

COMMISSIONER SILVERMAN: With all due respect, don't you think that the health care benefits experts out there, the ones that are far greater minds than us in this area, if they could have done so, that they would have? I mean most of them that have looked at this have said it's just not -- [microphone is adjusted] - are you trying to muffle me? [audience laughter] - it's just not possible. And I don't know that we're in the business of doing that. I appreciate where you're trying to go.

COMMISSIONER ISHIMARU: And I guess the one thing that struck me from looking at the comments that have come in, the written comments, and especially in the last few days, is that we've gotten letters from major corporations, and I'm thinking one of Dow, I think, and Kodak and there have been a number of others, and instead of providing me with a specific example of what's going to happen to their corporation and why, it talks in generalities about this will have impact or may have impact, and that, frankly, did not help me come to terms with how corporations would have to deal with this problem. I think it would have been far more useful for Kodak to tell me that because or by not having this rule in place, they would do X, Y and Z.

VICE CHAIR EARP: I think that we do have some evidence of that from that stakeholder meetings, and, Ms. Johnston, maybe you can fill in, but it's my understanding that when we had the stakeholder meetings and corporations came, I don't really blame them for perhaps not wanting to reduce some of this in writing, but in the closed sessions they were very clear verbally articulating that they would be most reluctant to go through what the rule required under Erie , that they would just not provide the coverage at all.

MS. JOHNSTON: Again, as I mentioned in my opening statement, there were some statements, primarily from some of the educational associations but a couple of others, saying that they had specific instances of districts that in response to Erie had reduced their benefits.

COMMISSIONER ISHIMARU: But did that also extend to private corporations as well, from your recollection of the discussion?

MS. JOHNSTON: I believe SHRM and --

CHAIR DOMINGUEZ: SHRM did.

MS. JOHNSTON: SHRM is the main one that comes to mind.

COMMISSIONER ISHIMARU: But, no, but did --

MS. JOHNSTON: It indicated --

COMMISSIONER ISHIMARU: Indicated that actual corporations versus corporations writ large or corporations as a group would have this problem?

MS. JOHNSTON: I believe SHRM indicated that some of their members would reduce benefits in response to Erie.

CHAIR DOMINGUEZ: In addition, the General Accounting Office has made some comments about that.

MS. JOHNSTON: The GAO comment indicated that Erie may be exacerbating the problem. As you pointed out, much of the problem is -- I mean there are all these other pressures on employers that are leading them to reduce retiree benefits, and as one of our stakeholders said during our meeting, Erie has become a major irritant. In other words, it's exacerbating a trend that admittedly had started already.

COMMISSIONER ISHIMARU: Well, let's be clear about what we're talking about here. Erie may be an irritant like a fly is on a horse, but the main driver behind reducing retiree health care benefits is a financial driver and that we read every day in the paper that companies are reducing retiree health care benefits for financial reasons and that Erie, I would posit, is like that fly on the horse.

COMMISSIONER SILVERMAN: I think we all acknowledge that cost is the major driving force, but this decision and the uncertainty -- and I don't think we can underestimate what uncertainty does to employers when making decisions, they like to know -- is just piling on.

VICE CHAIR EARP: Yes. I think less a fly on the wall than the proverbial straw that breaks the camel's back. And I don't think from our perspective that would be in the public interest at all.

COMMISSIONER ISHIMARU: I would agree if it's a straw that actually was going to break the camel's back, but it's my understanding that there's been no litigation post-Erie, that this has not spread beyond the 3rd Circuit, that this is an issue that's out there for most of the country as a hypothetical question.

COMMISSIONER SILVERMAN: Stuart, excuse me, Commissioner Ishimaru, if you were looking at the results of the Erie case, would you rush to court in another jurisdiction to get the same result? I mean they really -- it was an empirical victory at best.

COMMISSIONER ISHIMARU: Would I rush to court representing who?

COMMISSIONER SILVERMAN: Representing retirees who may jeopardize the retiree benefits that they're still getting?

COMMISSIONER ISHIMARU: I understand what you're saying. My point is that Erie isn't controlling law beyond the 3rd Circuit and that the nationwide problem that we're trying to address here, I would argue, is a problem that, at least as a legal matter, is limited to the 3rd Circuit without subsequent litigation in other parts of the country.

Can I ask one other question, though?

CHAIR DOMINGUEZ: Can I just --

COMMISSIONER ISHIMARU: Sure.

CHAIR DOMINGUEZ: Excuse me, Commissioner. Let me just respond to that, because, legalities aside, I am concerned, as we all are, about the public's interest and the impact of this one legal decision. It's not just confined to the 3rd Circuit, it's confined to what does it mean? Every attorney, every benefits expert looks at that decision when counseling and advising their employers in determining whether or not to offer these benefits and what kind of incentives.

So regardless of how the decision has or has not spread, I think the impact, the unintended impact of this decision has been to provide a chilling effect on the continued offering of these benefits.

COMMISSIONER SILVERMAN: I mean it was the 3rd Circuit's interpretation of federal law. I don't think there was anything unique to the 3rd Circuit, so that we all know that any other circuit may or may not make that decision, and that's why we were discussing the uncertainty.

COMMISSIONER ISHIMARU: But there have not been any other cases in any other circuits, as far as we know.

COMMISSIONER SILVERMAN: That's correct.

VICE CHAIR EARP: I would actually view that as a compliment to the work that the Office of Legal Counsel is doing. I mean we got out there very quickly with the guidance, we had stakeholder meetings, and we very forcefully told them that we were going to study this problem. So the fact that we haven't been sued or this issue hasn't come up in other circuits I think is a compliment to us.

The other point that I would make, I appreciate your desire or what you view as what the Commission should have a desire for additional evidence, additional information, more time to study. My problem with that is the health benefits once lost I don't think they're coming back. And if we wait much longer to stem this tide of erosion, I just think it will be to a major, major detriment of the senior community.

CHAIR DOMINGUEZ: Okay.

COMMISSIONER ISHIMARU: Can I raise one last question, because we could debate this forever.

CHAIR DOMINGUEZ: Yes.

COMMISSIONER ISHIMARU: It's my understanding that the ADEA allows covered entities to take action otherwise prohibited under the Act if it's a part of a voluntary early retirement incentive plan. Could we have possibly done something like that here? In creating a voluntary early retirement incentive plan for retirees, can you provide a health care benefit as part of that program? Is that something we consider at all? It's my understanding that this exemption is in the ADEA itself.

MS. JOHNSTON: Right. But the Commission has consistently taken the position that that provision still has to conform to the basic requirements of the ADEA. So that, for instance, you cannot provide an early retirement incentive that is more favorable to younger workers. This comes up a lot in the declining cash awards that a lot of employers have had a practice -- had had a practice of providing, say, $10,000 to a 52-year-old and $5,000 to a 57-year-old. The Commission has consistently taken the position that that provision still has to conform to -- that that kind of practice is unlawful and that the provision still has to conform to the basic purposes of the ADEA, so that I don't think that gets us out of it.

COMMISSIONER ISHIMARU: Great. I appreciate the answer.

CHAIR DOMINGUEZ: Thank you. Okay. Well, it's almost three years since I became Chair of the Commission, in August it will be three years, and my first act was actually to rescind this policy to allow us to continue the evaluation and assessment, and I really again want to commend the Office of Legal Counsel and all of the Commissioners for the tremendous work that they have done in really giving this a very steady, very careful and deliberative evaluation.

So at this point, unless there are any further comments, I'd like to bring the discussion to a close. I think we're now ready to vote. Is there a motion to approve the final rule -- the proposed final rule?

COMMISSIONER SILVERMAN: I move that the agenda item be approved.

CHAIR DOMINGUEZ: Is there a second?

VICE CHAIR EARP: Second.

CHAIR DOMINGUEZ: Any discussion -- further discussion? Hearing none, all in favor, aye? Opposed, no.

VICE CHAIR EARP: Aye.

COMMISSIONER SILVERMAN: Aye.

CHAIR DOMINGUEZ: Aye.

COMMISSIONER ISHIMARU: No. CHAIR DOMINGUEZ: All right. The vote, as recorded, will be three to one.

I really want to thank all of my fellow Commissioners and again remind you that we have voted, as the proposed final rule, to send this rule for interagency coordination to all the involved agencies as well as to OMB at the end of that process. Thank you very much.

COMMISSIONER ISHIMARU: Madam Chair, can I ask a clarifying point? The document that we are sending over, is that now -- because of our discussion here, is that a public document or is that still considered part of the interagency review and not subject to disclosure?

CHAIR DOMINGUEZ: Legal Counsel?

ASSOCIATE LEGAL COUNSEL PEGGY MASTROIANNI: As a result of this public meeting that we have had on the document, the document is now public.

COMMISSIONER ISHIMARU: Public document. Thank you for the clarification, because I'm sure some people would want to see it.

MS. MASTROIANNI: In the normal course, it would not have been public, but since we had an open meeting under the Sunshine Act, and you voted on it, it is now a public document.

CHAIR DOMINGUEZ: Okay.

COMMISSIONER ISHIMARU: Thank you.

CHAIR DOMINGUEZ: Thank you very much. The meeting is adjourned.

(Whereupon, at 11:22 a.m., the Commission Meeting was concluded.)

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