During December 2007, the EEOC issued important instructions to employers concerning retiree health insurance and pre-employment testing. The EEOC will now allow companies to “coordinate” health insurance benefits for retirees by considering the employee’s eligibility for Medicare, without ensuring that Medicare-eligible retirees receive exactly the same benefits as other retirees who are ineligible for Medicare. By coordinating the benefits available to a retiree, the employer can save money by only paying for those benefits that are not covered by Medicare or other state sponsored plans. Under the EEOC’s final rule, companies may now eliminate or change health insurance benefits for retirees. According to the EEOC, these actions do not violate the Age Discrimination in Employment Act. However, companies need to be careful when drafting their plans, because employees may challenge the rule and a court may overturn the rule and find a violation of the Act.
In addition, the EEOC issued a Guidance concerning employment tests. In the Guidance, the EEOC discusses many different types of pre-employment tests, including criminal and credit checks. Tests should be nondiscriminatory and will face scrutiny if they have the result of adversely affecting employees within protected classifications. Therefore, simply purchasing a test and giving it to all applicants is not enough. Tests should be directly related to the employees’ job duties and human resource professionals should monitor the results to make sure that the tests do not adversely affect protected groups of employees.