EEOC SEEKS TO APPEAL COURT ORDER ON RETIREE HEALTH BENEFITS RULE

PRESS RELEASE
3-30-05

WASHINGTON – Cari M. Dominguez, Chair of the U.S. Equal Employment Opportunity Commission (EEOC), issued the following statement today:

"The federal District Court in Philadelphia issued an order today that will delay the effective date of an EEOC rule that is designed to protect retirees' health benefits. I note that the Court characterized as ‘persuasive' the EEOC's argument that, without this exemption, employers will reduce or eliminate health benefits for all retirees. However, the Court found that the EEOC did not have authority to issue such a rule under the Age Discrimination in Employment Act.

"The EEOC plans to ask the Justice Department to appeal the District Court's decision to the Third Circuit Court of Appeals. The agency remains confident on both policy and legal bases in its authority to implement the rule. We are also confident that the Court of Appeals will correct the District Court's misunderstanding of the EEOC's authority under the ADEA and allow the rule to go into effect.

"The subject rule, which allows employers to coordinate retiree health care benefits with Medicare, has drawn strong support from both the employer and labor communities as well as from Members of Congress on both sides of the aisle. The major teachers unions continue to urge the Commission to act because the benefits of thousands of teachers nationwide remain in jeopardy without the Commission's rule.

"The new rule will help safeguard existing and future health benefits for America's retirees by ensuring that the ADEA does not impede employers' ability to offer retiree health plans. Specifically, the rule will clarify that employers may continue to coordinate retiree health benefit plans with eligibility for Medicare or a comparable state health benefit without violating the ADEA. It does not change current employer practices or plans, nor does it affect any other legal obligations an employer may have. On the contrary, the rule removes an impediment to employers so that they may continue providing retirees with critical health care coverage.

"The ADEA authorizes the Commission to approve exemptions to the law in those rare instances in which application of the law would be contrary to the public interest. Because the Erie County decision was contributing to a continuing decline in the availability of employer-provided retiree health benefits, the Commission concluded that it would be in the best interest of employers, employees, and retirees to permit employers to offer these benefits to the greatest extent possible."

The EEOC enforces the federal laws prohibiting discrimination in employment. Further information about Commission is available on its website at www.eeoc.gov.

This page was last modified on March 30, 2005.