Md.’s Mikulski, Conn.’s Kennelly Hit Benefit Ruling

April 28, 2004

Sen. Barbara Mikulski, D-Md., wants to find a way to block a federal commission’s support for a proposal that would allow employers to cut health benefits for retirees who qualify for Medicare.

Last week, the Equal Employment Opportunity Commission voted 3-1 along party lines to approve the rule, which is subject to further review before it becomes final.

Mikulski described the vote as “very disturbing,” saying she expected a court challenge to the commission’s decision.

“When we go back to Washington this afternoon, we’re going to be looking at the EEO ruling and to see, quite frankly, how we can overturn it,” Mikulski said.

Mikulski commented on the commission’s vote after an audience member asked her about it during a presentation she made on Medicare at Oak Crest Village in Baltimore County.

Former Connecticut Rep. Barbara Kennelly, who is the president of the National Committee to Preserve Social Security and Medicare, joined the senator.

“The EEOC is supposed to be acting on discrimination,” Kennelly said. “What they’re doing in this situation is they’re making a blanket ruling for health care across this nation, and I think that a court challenge will be that they’ve gone beyond their powers.”

Under the rule, employers can coordinate health benefits for retirees who are eligible for Medicare at age 65 or a similar state-sponsored health benefit. Employers had been prohibited from doing so since 2001, after a federal appeals court concluded that coordinating health benefits was illegal age discrimination.

Unions representing teachers, police and firefighters and public employees favor the rule because those workers get early retirement and would be most affected if companies stopped offering benefits to younger retirees.

Cari Dominguez, who chairs the EEOC, said the commission supported the proposal after unions, teachers’ organizations, state and local governments and employers said the 2001 court ruling would force them to cut back or eliminate health benefits for retirees.

“The commission did not want this to happen,” Dominguez wrote in a letter on the commission’s web site. “We acted so that you may continue to receive the health benefits you want and need.”

Before it becomes final, the proposed rule must go through further review by federal agencies and the White House Office of Management and Budget.

The Congressional Budget Office estimated that 2.7 million retirees will lose the drug coverage they now receive from former employers, although other projections are that a much smaller number will have their existing private benefits dropped.

Copyright 2004 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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