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HRA age requirement


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I have a client setting up an HRA plan who wants to exclude those under age 25. It looks like this is OK under 105(h). However, she has somebody else saying the limit is 21 because of ERISA. I think she is looking at retirement plan not health plan so the 21 does not apply. Is there a link to the age 21 for an ERISA HRA?

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I doubt that age discrimination would be allowed under either 105 or 125, but truthfully, I have not looked because I think that HIPAA, ERISA, FLSA, EEOC and even state law that would prohibit it in a few states. Also for public entities and certain other employers there is the Age Act.

From EEOC: http://www.eeoc.gov/laws/types/age.cfm

This article cover some of the main issues, but unfortunately does not give cites or links:

http://www.shrm.org/templatestools/hrqa/pages/offeringdifferentbenefitsfordifferentemployees.aspx

Age is not an acceptable classification under 105, 125 or HIPAA. While age is not specifically addressed, the issue of similarly situated employees is prominent:

http://www.dol.gov/ebsa/faqs/faq_hipaa_ND.html

Then there is ERISA 510 and FLSA 18C which both prohibit interference, denial or restricting an employees right to a benefit.

Then there is ACA.

If your client plans to go ahead, I suggest that they do so only after seeking competent legal advice.

George D. Burns

Cost Reduction Strategies

Burns and Associates, Inc

www.costreductionstrategies.com(under construction)

www.employeebenefitsstrategies.com(under construction)

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Guest Statler

I think they got the age 25 from IRC 105(h)(3)(B)(ii) which details nondiscrimination for self-insured medical expense reimbursement plans.

Excerpted below.

(3) Nondiscriminatory eligibility classifications

(B) Exclusion of certain employees

For purposes of subparagraph (A), there may be excluded from consideration -

(i) employees who have not completed 3 years of service;

(ii) employees who have not attained age 25

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One law does not necessarily negate another.

George D. Burns

Cost Reduction Strategies

Burns and Associates, Inc

www.costreductionstrategies.com(under construction)

www.employeebenefitsstrategies.com(under construction)

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There is no Federal law ADEA violation if there is discrimination against younger employees, and any State ADEA rule to the contrary would be pre-empted by ERISA.

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I gave the EEOC link not for ADEA but for its reference to state law. State labor and employment laws are not pre-empted by ERISA.

"The Age Discrimination in Employment Act (ADEA) only forbids age discrimination against people who are age 40 or older. It does not protect workers under the age of 40, although some states do have laws that protect younger workers from age discrimination."

George D. Burns

Cost Reduction Strategies

Burns and Associates, Inc

www.costreductionstrategies.com(under construction)

www.employeebenefitsstrategies.com(under construction)

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No, they would be preempted by ERISA (assuming the HRA is an ERISA plan, which it would be unless it is a governmental plaln or a church plan). The Supreme Court resolved this issue maybe 30 years ago.

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ERISA preemption is not absolute, it depends on the facts and circumstances of each case. There is always an "If".

"If a claim can be brought under ERISA ยง 502(a), then the state law action

is completely preempted by ERISA ยง 514(a). See Ingersoll-Rand Co. v.

McClendon, 498 U.S. 133 (1990) (a common law wrongful discharge claim

that an employer terminated or otherwise discriminated against an

employee to prevent the employee from vesting in a benefit or to prevent

accrual or receipt of a benefit is preempted by ERISA ยง 510);"

Why di you pick on ADEA as being the only thing applicable?

George D. Burns

Cost Reduction Strategies

Burns and Associates, Inc

www.costreductionstrategies.com(under construction)

www.employeebenefitsstrategies.com(under construction)

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[Copied and pasted from ABA preemption materials; Google is your friend]:

State law claims of employment discrimination may not be preempted if
they have a basis independent of the plan in question. Even if they
directly implicate plans, such claims may not be preempted if the portion
of the state statute at issue tracks a federal employment discrimination
statute. Compare Shaw v. Delta Air Lines, 463 U.S. 85, 97 (1983) (ERISA
preempts a state law barring pregnancy discrimination because Title VII
had not yet been amended to bar such discrimination; state laws play a
"significant role" in the enforcement of Title VII and stated that "to the
extent that the Human Rights Law provides a means of enforcing Title
VII's commands," ERISA preemption would impair Title VII.
Consequently, such state laws would not be preempted because of ERISA
ยง 514(d)) with Warner v. Ford Motor Co., 46 F.3d 531 (6th Cir. 1995)
(state age discrimination law not preempted); Clark v. Coats & Clark, Inc.,
865 F.2d 1237 (11th Cir. 1989) (same); Le v. Applied Biosystems, 886
F.Supp. 717 (N.D.Cal. 1995) (state disability discrimination claim not
preempted).
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Yes, the Delta case stands for the proposition that if something is not prohibited by Federal ADEA then any state law to the contrary is preempted by ERISA.

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You have a unique interpretation of Delta.

How did you get ADEA into it or into Title VII?

George D. Burns

Cost Reduction Strategies

Burns and Associates, Inc

www.costreductionstrategies.com(under construction)

www.employeebenefitsstrategies.com(under construction)

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