Remarks of Chair Cari M. Dominguez

The U.S. Equal Employment Opportunity Commission

Meeting of the U.S. Equal Employment Opportunity Commission
Proposed Final Rule: Age Discrimination in Employment Act Retiree Health Benefits
April 22, 2004

The meeting will now come to order. Good morning and welcome to the U.S. Equal Employment Opportunity Commission.

The purpose of our meeting today is to deliberate and vote on a proposed final rule that would exempt from the Age Discrimination in Employment Act the coordination of employer-sponsored retiree health benefits with Medicare eligibility. If the rule is approved, it will be submitted for interagency coordination. Now, let me explain what this means so that we can all be clear about what the Commission is doing today.

Our proposed final rule has to go through some additional steps before it can become final and effective. These steps occur after our vote today, and the steps are prescribed by executive orders that apply to federal agencies: Executive Orders 12067 and 12866. In very simple terms, it is really a coordination and review process that all proposed rules are required to go through to make sure that there is consistency and uniformity in the public policy process.

If the Commission votes to approve, our proposal will first go to a number of other federal agencies for their final review and any comments that they might have. Next, that process is followed by review at the Office of Management and Budget, and it is only after both parts of the process are done and all further input is considered that we can move forward with having a final rule. A rule is final when it is published in the Federal Register.

We recognize that this issue is extremely important to retirees, and I want to acknowledge the outpouring of comments from retirees expressing concern about what this proposed rule might mean to them. We trust that this meeting will allay those concerns.

We also have received extensive and numerous comments from major organizations, such as the Society for Human Resource Management, the AFL-CIO, the American Federation of Teachers, the National Education Association, and others, all of which have written to express support for this rule, while AARP provided extensive comments and participated in numerous meetings expressing their opposition to this rule. We will get into more detail about the specific comments a little later.

But let me say once again that regardless of our point of view, we share a common interest and objective, and that is helping preserve retiree health benefits. And until these additional steps of the rulemaking process are completed, there will continue to be opportunities for the AARP and other organizations and individuals to work toward our shared objective of helping to preserve retiree health benefits.

We appreciate Commissioner Ishimaru's request that this item be placed on the agenda, which allows us to have a public discourse on the matter. Let me note that, in accordance with the Sunshine Act, this meeting is open to public observation.

The proposed rule under discussion today is intended to protect the retiree health benefits of older workers by creating an exemption from the Age Discrimination in Employment Act for the practice of coordinating employer-provided retiree health coverage with eligibility for Medicare or a state-sponsored retiree health benefits program.

Specifically, employers would be permitted to provide health care coverage to retirees until they are eligible for Medicare at age 65 and to adjust that coverage when the retiree becomes eligible for Medicare or a state-sponsored equivalent.

This morning we are going to proceed as follows: First, Assistant Legal Counsel Dianna Johnston will provide a report on today's agenda item with all the background needed for the Commissioners to deliberate and vote. Then individual Commissioners may present statements for the record before we begin discussion. At this time, I would like to invite Ms. Johnston to come up.

Thank you very much, Ms. Johnston. I am going to ask you if you could stay and make yourself available for questions. Upon deliberations, there may be some further questions that the Commissioners may have.

The Commission has taken considerable time to conduct a full and fair review of this issue with input from a unique alliance of groups and individuals. Again, let me reaffirm that we are certainly aware of anxieties and misperceptions that have taken root, and we wish to reassure all that the Commission is not acting to eliminate retiree health benefits.

The EEOC's proposed regulation is intended to ensure that the ADEA does not have the unintended consequence of discouraging employers from providing valuable health benefits to retirees. The General Accounting Office has estimated that 10 million retired individuals aged 55 and over count on employer-sponsored health plans as either their primary source of health coverage or as a supplement to Medicare. 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.

As you heard from Ms. Johnston, we have received extensive comments, and I just wanted to also incorporate comments that we recently received from members of Congress urging the Commission to approve a final rule. Representative John Boehner, Chairman of the House Committee on Education and the Workforce, along with Representative Sam Johnson, Chairman, and Representative Robert Andrews, Ranking Member of the Subcommittee on Employer-Employee Relations, wrote to the Commission on December 11, 2003, stating, "We agree with the Commission that this clarification is needed and will help prevent Americans across the country from losing their retiree health coverage in this era of escalating costs. The Commission's final rule should clarify the ADEA to ensure that the practice of providing bridge coverage to early retirees will not constitute a violation of the ADEA."

The AFL-CIO has written to us that "A wide range of employees in both the public and private sectors stand to lose if the EEOC does not exempt [such] retiree health plans . . . from the ADEA's prohibitions."

Similarly, the American Federation of Teachers (AFT) wrote, "The AFT agrees with the EEOC's position that the exemption exhibits due regard for the Act's prohibition against arbitrary age discrimination and is consistent with the ADEA's purpose of promoting the employment of older persons. . . . [T]he exemption will provide employers with an incentive to continue providing retiree health benefits in that critical period between retirement and eligibility for Medicare or eligibility for State-sponsored retiree health benefits."

Again, these are just a few of the many comments that are on the record addressing the issue at hand, and we appreciate every one of them. I am sure that the Commissioners, as we deliberate, may bring up some other comments.

At this point, let me turn to my fellow Commissioners and invite them to present statements.

Chair's April 23, 2004 Message to Retirees

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