EEOC approves proposal to cut, eliminate benefits for Medicare-eligible retirees

<br>WASHINGTON (AP) _ Employers could reduce or eliminate their retirees' health benefits once the former workers qualify for Medicare, under a proposal from the Equal Employment Opportunity Commission.

Friday, April 23rd 2004, 12:00 am

By: News On 6

WASHINGTON (AP) _ Employers could reduce or eliminate their retirees' health benefits once the former workers qualify for Medicare, under a proposal from the Equal Employment Opportunity Commission.

The decision, subject to further review before it becomes final, could affect millions of retirees who rely on employer-sponsored health plans to pay medical expenses not covered by Medicare.

Employers had been prohibited from coordinating their health benefits for retirees who are eligible for Medicare or similar state-sponsored plans since 2001, after a federal appeals court concluded that coordinating health benefits was illegal age discrimination.

The commission voted 3 to 1 for the proposed rule, with three Republicans in favor and one Democrat opposing it.

The AARP, which represents millions of retirees, was disappointed with the commission's decision.

``More than 12 million Medicare beneficiaries receive benefits from their former employers,'' Michael Naylor, the group's advocacy director, said in a statement. ``AARP is concerned that this rule may jeopardize those benefits.''

But proponents of the change said it would help preserve coverage for earlier retirees.

``Such benefits are provided on a voluntary basis at the discretion of each employer and the Commission is acting to preserve these valuable benefits for retirees,'' Commission Chair Cari Dominguez, a Republican, said in a statement.

Before it becomes final, the proposed rule must go through further review by federal agencies and the White House Office of Management and Budget.

The commission had the support of Rep. John Boehner, chairman of the House Workforce Committee. He said the rule would ``help preserve important retiree health benefits for millions of American seniors.''

The Ohio Republican had sent a letter to Dominguez in December, pushing for the rule. The letter was also signed by Reps. Robert Andrews, D-N.J., and Sam Johnson, R-Texas.