American Benefits Council: News Room

NEWS RELEASE

March 24, 2008
PR-08/04
For additional information:
Jason Hammersla
202-289-6700

Council applauds end of AARP v. EEOC legal battle

WASHINGTON, D.C. — “Now that the U.S. Supreme Court has declined to hear further arguments in the case of AARP v. the Equal Employment Opportunity Commission (EEOC), retirees and employer benefit plan sponsors can breathe a little easier,” said American Benefits Council President James A. Klein today. “The Third Circuit Court decision, now final, permits public and private employers to continue the long-standing practice of coordinating retiree health programs with Medicare without fear of running afoul of federal law. Without the ability to do so, employers would — for practical purposes - have been compelled to reduce retiree health benefits for younger retirees not eligible for Medicare,” Klein noted.

The Supreme Court denial closes the chapter on a long legal struggle beginning in 2001 with the case of Erie County Retirees Association v. County of Erie. In 2003, EEOC proposed a regulation to allow for a coordination of employer-sponsored retiree health benefits when retirees become eligible for Medicare or a state-sponsored retiree health benefits program. AARP then filed suit to block the publication of the EEOC’s final regulation.

“Voluntary sponsorship of employer benefits — and retiree health benefits in particular — has become an ongoing challenge for employers competing in a global economy,” Klein said. “By coordinating retiree health coverage with existing government programs like Medicare or state employee health benefit programs, employers can preserve retiree benefits that would otherwise be unsustainable,” Klein concluded.

To arrange an interview with a Council staff member, please contact Jason Hammersla, Council director, communications, at jhammersla@abcstaff.org or by phone at (202) 289-6700.

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The American Benefits Council is the national trade association for companies concerned about federal legislation and regulations affecting all aspects of the employee benefits system. The Council’s members represent the entire spectrum of the private employee benefits community and either sponsor directly or administer retirement and health plans covering more than 100 million Americans.