Age Discrimination Rules Apply to Healthcare Says Federal Judge 

A federal judge this spring barred the government from allowing companies to exclude retiree healthcare plans from age discrimination rules. 

The federal Equal Employment Opportunity Commission (EEOC) proposed change — which was rejected and that many retiree activist groups believed discriminated against some retirees— would have allowed companies to offer better healthcare packages to younger retirees than they give to older retirees. 

The AARP filed a lawsuit against the EEOC in February 2005. They alleged that the EEOC proposal, which was approved by the federal commission in April 2004, would deny healthcare to those retirees that need it the most. 

"The law is clear that if they (companies) choose to provide retiree health benefits, they cannot deny them to some of their retirees based on age," said Laurie McCann, an AARP attorney. 

A Philadelphia district court judge later issued a temporary ruling that barred the EEOC from proceeding with the new rule until the issue could be heard in court. 

In the latest ruling, U.S. District Judge Anita Brody said the EEOC lacked the power to make changes to the current age discrimination rules which takes into account healthcare plans. 

Following Brody’s ruling, EEOC Chairwoman Cari Dominguez said the commission planned to appeal the decision. 

The EEOC had hoped that by exempting healthcare from the age discrimination rules companies would be less likely to completely eliminate retiree health benefits all together, the EEOC argued previously. 

“The EEOC plans to ask the Justice Department to appeal the District Court's decision to the Third Circuit Court of Appeals,” said Dominguez. “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 (Age Discrimination in Employment Act) ADEA and allow the rule to go into effect.” 

According to a study co-sponsored by the Henry J. Kaiser Foundation, the number of companies with 1,000 workers or more offering health coverage to retirees plunged from 80 percent to 57 percent between 1991 and 2003. 

The EEOC proposal would have allowed companies to legally drop retirees at the age of 65, when they become eligible for healthcare through the federal Medicare program.