Bias Case Settled by Trimming Benefits
Business Insurance Online (04/22/02) Vol. 36, No. 16 p.3; Geisel, Jerry

Many have feared the after-effects of an August 2000 decision by the Third U.S. Circuit Court of Appeals that retirees' health benefit plans are included under the Age Discrimination in Employment Act, which bars employers from discriminating against old employees. In April 2001, U.S. District Court Judge Sean McLaughlin found defendant Erie County was discriminating against its older retirees by offering them health benefits inferior to those offered to younger retirees. The county offered younger retirees coverage from a point-of-service plan, allowing them to choose whether to stay in or leave the plan's provider network without paying a monthly premium. Older retirees, on the other hand, were eligible for a Medicare health maintenance organization, and paid premiums of about $50 a month. The judge approved a settlement of $350,000 to be paid to the retirees by Erie County, part of which was as return for monies they had paid on Medicare premiums. Erie County's reaction to the decision prompted them to decrease younger retirees' coverage rather than increase coverage for the older retirees. Many say this case illustrates fears brought about by the August 2000 Third Circuit Court of Appeals decision, and are waiting to see what will happen next. The equal Employment Opportunity Commission is still working on drafting new rules based on the 2000 decision that do not discourage employers from providing retiree health benefits.


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