I won't hold you to it - Elimination of Ree health?

[Guest tintree73]

New boss has decided to completely terminate all retiree health benefits. I told him about the proposed EEOC regulations, AARP's response, the problems with medicare coordination and the equal cost/benefits rules (and offset for retirees, etc.). The Plan is insured with some assets in a master trust.

There is no CBA, it appears no one is vested (or has been told they are vested - but you never know for sure) and the plan has the proper language allowing plan sponsor to amend/term.

Boss wants to amend the plan effective January 1, 2006 (with board approval) to completely eliminate any retiree health and argue that anyone who terminates or retires will only receives COBRA.

I tried to get as much on-line as possible, but now I am plain stumped because of the EEOC Manual, ERIE case, the ADEA implications, etc.

Is this a time bomb waiting to happen (employee relations/PR aside)?

[mbozek]

I dont understand your concern with the AARP, EEOC and Medicare since employers are not required to maintain health benefits under ERISA. I thought the medicare issues under age discriminaton apply where employer health coverge is reduced or eliminated when retirees becomes eligible for medicare at 65. Why not refer the question to counsel to determine if there is any liability risk under the terms of the employer's health plans? I am sure the board would want a legal opinion before making a decision.

[jsb]

I would agree with mbozek - AARP, EEOC and ADEA are not your problem. I think the real issue is whether or not your plan is vested, and whether or not someone sues you when you terminate it to try and prove vesting. You need benefits counsel opinion regarding your plan document language, vesting, and your past practices in order to properly evaluate your risk here.

[Guest tintree73]

Thank you so much for your replies!