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EEOC strikes blow at Retiree benefits

December 27, 2007 - According to the Equal Employment Opportunity Commission, employers are still allowed to take into account the structure of Medicare when putting together the health benefits of their retired workers.

One of the biggest factors that this fact implicates is the ability of employers to shift some of the financial responsibility onto the government when certain retired employees qualify for Medicare.

Employers will have the option of providing retiree health benefits “only to those retirees who are not yet eligible for Medicare.” Furthermore, when a retired worker reaches an age where they qualify for Medicare, their former employer is no longer obligated to continuing providing health benefits.

Furthermore, former employers will be able to reduce or even eliminate the health benefits provided to the spouse or dependents of a retired worker.

"Implementation of this rule is welcome news for America's retirees, whether young or old," Commission Chairwoman Naomi C. Earp said in a statement posted Wednesday on the commission's Internet site. "By this action, the EEOC seeks to preserve and protect employer-provided retiree health benefits which are increasingly less available and less generous. Millions of retirees rely on their former employer to provide health benefits, and this rule will help employers continue to voluntarily provide and maintain these critically important benefits in accordance with the law."

Currently in the United States, more than 10 million retired workers rely on health benefits from their employers.

In a preamble to the new regulation, published Wednesday in the Federal Register, the commission said, “The final rule is not intended to encourage employers to eliminate any retiree health benefits they may currently provide."