Prescription coverage for retirees; OK to require them and their depen

[Guest Lori Townsley]

I have an employer with 650 employees. The company wants to change the prescription benefit that it offers to the retirees on the plan. They want to make it so that the retirees and their dependents go onto PACE or contribute $100 towards the cost of their prescription coverage. Is this considered discrimination under ADEA guidelines. Also, they want to hold an open enrollment for just prescriptions--has anyone heard of this?

[Bill Ecklund]

I can't comment on the open enrollment issue, but under the ADEA, an employer does not have to provide the same benefits to retirees that it provides to emplyees, but once it does provide benefits to retirees, the EEOC's position is that the employer may not discriminate against classes of retirees based on age. For example the EEOC would take the position that it is not permitted to provide lower benefits once the retiree reaches age 65.

[Mary C]

The new 125 regs allow a new election if a new plan option is added or if the coverage is substantially changed mid-year.