By ARTHUR D. POSTAL
A federal district court decision on March 30 barring employers from providing greater health benefits to younger retirees is being heavily criticized by a trade group that advises employers on health benefits issues.
The decision by Judge Anita B. Brody of the federal district court in Philadelphia strikes down a decision by the Equal Employment Opportunity Commission to publish a rule that “clarifies” that an employer-sponsored retiree health plan would not violate the Age Discrimination in Employment Act (ADEA) even if it does not provide the same level of benefits to early retirees and to older retirees who are eligible for coverage under Medicare.
Judge Brody, citing an earlier precedent of the higher court, the 3rd Circuit U.S. Court of Appeals, also issued a permanent injunction that prohibits federal officials from enforcing it.
The judge said the agency lacked the power to make the change and that it violated the 3rd Circuit precedent that said companies may offer different health plans to retirees of different ages only if they are of equal value or provide equal benefits. That decision involved retirees who had worked for Erie County, Pa.
The EEOC had hoped to publish a final rule in February but was unable to because AARP sued to block enforcement. AARP contended in its suit that giving differing packages to the young and the old amounts to age discrimination.