Changes For The Over-65s

The New York Times writes today that

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 — or none at all — for those older.

While employers are not required by federal law to provide health benefits to either active or retired workers, we negotiate or agree to employment packages as employees. It seems to me that corporations have found a way to shift the burden of health care from themselves to the taxpayer.

On the other hand, if employers are allowed to discriminate between those over 65 and those under, it would seem to give greater security to older workers and may even make older workers more attractive.

In another landmark deal, I missed the GM/Union deal that took place in September. GM has been at a $25 per hour cost disadvantage with the Japanese car manufacturers, because of health care benefits for retired workers. The Daily Independent wrote that General Motors Corp. won its struggle to unload $51 billion in retiree health costs and improve competitiveness in the latest round of contract talks with the United Auto Workers.

Deutsche Bank auto analyst Rod Lache said the agreement to move retiree health care costs off GM’s books could eventually reduce the labor cost gap by $18 an hour. GM would pay about 70 percent of its obligation, or nearly $36 billion, into the trust, called a Voluntary Employees Beneficiary Association, or VEBA

What’s next, some major change in Social Security?

Health Benefits for Retirees General Motors Corp. (GM) Mover Mike

One Response to “Changes For The Over-65s”

  1. On face value it would appear yet another double standard has been established, one which contradicts federal laws and guidelines of discrimination based on age.

    We have seen similar double standards along racial lines for decades; but why bring up truth at a time like this.

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