Another knife in the back: U.S. EEO Ruling Backs Benefit Cut at 65 in Retiree Plans Date: Wed, 2 Jan 2008 12:39:35 -0600 (CST) This story has received even less coverage than the so-named "Violent Radicalization and Homegrown Terrorism Prevention Act" (HR 1955), introduced by Calif. Democrat [sic] Jane Harman and its Senate counterpart S 1959. (see http://justanothercoverup.com/?p=343) ------------------------------- "In a preamble to the new regulation, published Wednesday in the Federal Register, the commission said, 'The final rule is not intended to encourage employers to eliminate any retiree health benefits they may currently provide.'" The article follows my own 'preamble': Now isn't that reassuring, emanating as it does from such a a kind and gentle administration?? And it must be sheer coincidence that Emblem Health, the parent company of two major health plans (GHI & HIP)serving New York and the tri- state area notified the members of the plans -within a DAY of this ruling- of their intention to convert from not-for- profit to for-profit [publicly-traded] status. Plan members are primarily "city, state, & federal employees; members of organized labor; employees of Fortune 500 companies and small businesses; and subcribers of government-sponsored health care programs." The rationale? "to expand access to quality health care...and increase the number and variety of plan options we offer...[therefore] we need access to investment capital, which our competitors now have." Emblem Health attempts to comfort its members that "[c]onversion to not-for-profit status will not affect service to our members, their access to doctors, their benefits, or levels of service they currently receive" and "The proposed Plan does not **aim** to affect policyholders' present rates or benefits, which will be automatically continued by the new proposed for-profit corporations." Pardon my refusing to swallow the koolaid. It is impossible to ignore the facts that shareholders will sooner or later demand benefit cuts so that their investments will increase in value and that the CEOs will be awarded massive salary increases for their compliance. Standard operating practice in the corporate world. I strongly encourage everyone concerned about yet another attack on health care benefits - not just GHI or HIP members or even New Yorkers- to testify or submit comments. Let's make an all-out effort to defeat yet another cancerous attack on hard-won benefits. Info from the notices and websites: HEARINGS on the conversion plan will be held in New York City at 10 am on 1/29/2008 ( HIP, 55 Water St.) and Albany, NY (Empire State Performing Arts Center, aka "The Egg) at 11 am on 1/31/2008. The plan itself and additional information can be found at http://www.ghi.com/default.aspx?Page=600, http://hipusa.com/conversion/index.asp. Related documents are available at http://www.ins.state.ny.us/hip_ghi_conv/ hip_ghi_planof.htm **Any person** may testify or submit comments. Those wishing to testify concerning the plan (not the enabling legislation) must call the Insurance Dept.'s Public Affairs Bureau at 212-480-5262. Written comments are to be addressed to Emblem Hearings, Public Affairs Bureau, New York State Insurance Department, 25 Beaver Street, New York, NY 10004 and/or e-mailed to the Insurance Department at EmblemHearings@ins.state.ny.us Comments will be accepted for 30 days after the close of the last public hearing. Anyone with quesions sbout the plan may call GHI or HIP at 1-877-444-6506 or rhe NYS Insurance Dept. at 212-480-5148. ========================================== http://www.nytimes.com/2007/12/27/washington/27retire.html The New York Times December 27, 2007 U.S. Ruling Backs Benefit Cut at 65 in Retiree Plans By ROBERT PEAR WASHINGTON b The Equal Employment Opportunity Commission said Wednesday that employers could reduce or eliminate health benefits for retirees when they turn 65 and become eligible for Medicare. The policy, set forth in a new regulation, allows employers to establish two classes of retirees, with more comprehensive benefits for those under 65 and more limited benefits b or none at all b for those older. More than 10 million retirees rely on employer-sponsored health plans as a primary source of coverage or as a supplement to Medicare, and Naomi C. Earp, the commissionbs chairwoman, said, bThis rule will help employers continue to voluntarily provide and maintain these critically important health benefits.b Premiums for employer-sponsored health insurance rose an average of 6.1 percent this year and have increased 78 percent since 2001, according to surveys by the Kaiser Family Foundation. Because of the rising cost of health care and the increased life expectancy of workers, the commission said, many employers refuse to provide retiree health benefits or even to negotiate on the issue. In general, the commission observed, employers are not required by federal law to provide health benefits to either active or retired workers. Dianna B. Johnston, a lawyer for the commission, said many employers and labor unions had told it that bif they had to provide identical benefits for retirees under 65 and over 65, they would just drop retiree health benefits altogether for both groups.b In a preamble to the new regulation, published Wednesday in the Federal Register, the commission said, bThe final rule is not intended to encourage employers to eliminate any retiree health benefits they may currently provide.b But AARP and other advocates for older Americans attacked the rule. bThis rule gives employers free rein to use age as a basis for reducing or eliminating health care benefits for retirees 65 and older,b said Christopher G. Mackaronis, a lawyer for AARP, which represents millions of people age 50 or above and which had sued in an effort to block issuance of the final regulation. bTen million people could be affected b adversely affected b by the rule.b The new policy creates an explicit exemption from age-discrimination laws for employers that scale back benefits of retirees 65 and over. Mr. Mackaronis asserted that the exemption was bin direct conflictb with the Age Discrimination in Employment Act of 1967. The commission, by contrast, said that under that law, it could establish bsuch reasonable exemptionsb as it might find bnecessary and proper in the public interest.b The United States Court of Appeals for the Third Circuit, in Philadelphia, upheld this claim in June, in the case filed by AARP, which has asked the Supreme Court to review the decision. In its ruling, the appeals court said, bWe recognize with some dismay that the proposed exemption may allow employers to reduce health benefits to retirees over the age of 65 while maintaining greater benefits for younger retirees.b But the court said the commission had shown that the exemption was ba reasonable, necessary and proper exerciseb of its authority. Under the new rule, employers may, if they choose, provide retiree health benefits bonly to those retirees who are not yet eligible for Medicare.b Likewise, the rule says, retiree health benefits can be baltered, reduced or eliminatedb when a retiree becomes eligible for Medicare. Further, employers will be able to reduce or eliminate health benefits provided to the spouse or dependents of a retired worker 65 or over, regardless of whether benefits for the retiree are changed. Employers and some unions contend that retirees under 65 have a greater need for employer-sponsored health benefits because they are generally not Medicare-eligible. Large employers have often provided some health benefits to retirees 65 and older, to help cover costs not paid by Medicare. But employers have for years been trying to reduce retiree benefits or to shift more of the cost to retirees. Lawyers for the commission said the new Medicare drug benefit, now nearing the end of its second year, had strengthened the case for the regulation because it guaranteed that retirees 65 and older would have access to drug coverage. Younger retirees have no such guarantee, so employers may want to provide drug coverage to them in particular, the lawyers said. Helen Darling, president of the National Business Group on Health, which represents large employers, welcomed the rule. bIf employers could not coordinate with Medicare, they would be far less likely to provide health coverageb to retirees, Ms. Darling said. bThey could not afford to.b A study by the Government Accountability Office in 2001 estimated that one-third of large employers and fewer than one-tenth of small employers offered health benefits to retirees. Ms. Darling said newer retirees often received not comprehensive coverage but instead a fixed amount of money, based on years of service, to help them with their medical costs. James A. Klein, president of the American Benefits Council, a lobby for large employers, said: bThe new rule is a victory for common sense and for retirees. Retiree health coverage has been declining for many years. Without this rule, many more retirees, especially early retirees, could find themselves without employer-sponsored coverage.b Gerald M. Shea, assistant to the president of the A.F.L.-C.I.O., also saw merit in the new rule. bGiven the enormous cost pressures on employer-sponsored health benefits,b Mr. Shea said, bwe support the flexibility reflected in the rule as a way to maximize our ability to maintain comprehensive coverage for active and retired workers.b Schoolteachers, like many other public employees, often retire early and rely on employer-provided health benefits until they become eligible for Medicare. At a Congressional hearing in 2005, the National Education Association and Representative John A. Boehner of Ohio, who is now the House Republican leader, supported the proposed rule. The teachers union said it feared that employers would cut health benefits for early retirees if they had to provide identical benefits to those over 65 and those under.