NBR Commentary – Older Workers and Health Benefits – 10 Jan 08
Two weeks ago the Equal Employment Opportunity Commission issued a regulation permitting employers to reduce or eliminate health benefits for retirees once they reach the Medicare eligibility age of 65. Opponents of the change say the EEOC’s authorizing age discrimination. Proponents point out that employers aren’t obligated to provide health benefits to begin with. And the ruling may make it easier for employers to continue bearing the cost of coverage for the early retirees who need it more – because they’re not yet Medicare-eligible.
It makes sense to rely on Medicare as the primary source of health coverage for those over 65 – retirees and active employees alike. Not just because it would provide some welcome cost relief to employers who offer health benefits, but also because it would encourage them to retain older employees and to hire or hire back retirees. Employers too often view older workers as expensive. But the over-65 employee whose healthcare is already covered can be a bargain.
As more Baby Boomers reach retirement age, and more employers suffer talent and experience shortages, we need to make it easier for older people to continue to work, for retirees to return to part-time work, and for employers to hire and retain older workers. Greater flexibility around health benefits can help the cause. Let’s also relax restrictions on pension and retirement fund draws by the actively employed, and let’s eliminate the Social Security earnings penalty, and then we’ll really be getting somewhere.
I’m Robert Morison.
Two weeks ago the Equal Employment Opportunity Commission issued a regulation permitting employers to reduce or eliminate health benefits for retirees once they reach the Medicare eligibility age of 65. Opponents of the change say the EEOC’s authorizing age discrimination. Proponents point out that employers aren’t obligated to provide health benefits to begin with. And the ruling may make it easier for employers to continue bearing the cost of coverage for the early retirees who need it more – because they’re not yet Medicare-eligible.
It makes sense to rely on Medicare as the primary source of health coverage for those over 65 – retirees and active employees alike. Not just because it would provide some welcome cost relief to employers who offer health benefits, but also because it would encourage them to retain older employees and to hire or hire back retirees. Employers too often view older workers as expensive. But the over-65 employee whose healthcare is already covered can be a bargain.
As more Baby Boomers reach retirement age, and more employers suffer talent and experience shortages, we need to make it easier for older people to continue to work, for retirees to return to part-time work, and for employers to hire and retain older workers. Greater flexibility around health benefits can help the cause. Let’s also relax restrictions on pension and retirement fund draws by the actively employed, and let’s eliminate the Social Security earnings penalty, and then we’ll really be getting somewhere.
I’m Robert Morison.
