Yes, You May Discriminate!

Finally! HR professionals everywhere have been waiting to hear those words. Recently, the Supreme Court refused to hear additional testimony as it relates Retiree health insurance plans. Up until now, the EEOC felt that offering different benefit plans with different pricing was a violation of ADEA. Hogwash - but that is what we get when we have a government agency that does not understand what they are ruling on. They neglected to look at the coordination of benefits with Medicare when they dreamed up this violation. So guess what happened? Most companies froze or discontinued offering retiree benefits altogether. Oops! That was not what the EEOC had hoped would happen.

With this latest confirmation from the US Supreme Court, what can happen is that employers, if they choose, can have different plans for employees that are catagorized as retired. Certainly, early retirees do not have the ability to coordinate benefits with Medicare so those plans may be more robust and more costly. Retirees that are Medicare eligible should have a plan that includes the proper benefit levels with the pricing of those plans to match.

Is there going to be any big rush for employers to re-introduce retiree benefits? No. With our workforce working longer and graying, retiree benefits are really a thing of the past. The real issue for the future is whether or not employers will be able to design benefit programs and encourage enrollment in those programs that are age/lifestyle based without the EEOC crying discrimination again? I hope so because that is where I think employers will see the most savings in the plans and employees will feel like they really have the correct benefits that meet thier needs. Another blog.