In Case You Were Confused, Medicare is for the Benefit of Employees, not Employers


EmpBlog-11.06.2012-ageismMost employers these days know that they cannot set a mandatory retirement age for employees.  This arcane practice runs directly afoul of the Age Discrimination in Employment Act (ADEA).

Most employers also know that they are prohibited by the ADEA from providing different benefits or rights to employees based on their age.

Employers do know this, right?

Well, many employers nonetheless continue to require that Medicare eligible employees (over 65 years old) transfer out of the employer’s group health insurance policy and commence their Medicare coverage.  While this may seem like a sensible and fair method of keeping costs down – after all, an employer is not even required to provide any group health insurance to employees – these employers are unwittingly violating the ADEA and opening themselves up to age discrimination lawsuits.  And not just any lawsuit, but the expensive class action kind.

Why? Because the ADEA expressly states:

An employer does not violate the Act by permitting certain benefits to be provided by the Government, even though the availability of such benefits may be based on age. For example, it is not necessary for an employer to provide health benefits which are otherwise provided to certain employees by Medicare.  However, the availability of benefits from the government will not justify a reduction in employer-provided benefits if the result is that, taking the employer-provided and Government-provided benefits together, an older employee is entitled to a lesser benefit of any type (including coverage for family and/or dependents) than a similarly situated younger employee.  For example, the availability of certain benefits to an older employee under Medicare will not justify denying an older employee a benefit which is provided to younger employees and is not provided to the older employee by Medicare.

Want to see it for yourself?  Read it at 29 C.F.R. §1625.10(e).

Need a translation?

The ADEA states that an employer cannot require an eligible employee to transfer to Medicare if Medicare offers less in benefits than the current employer group health plan.

Those employers who have terrible group health plans may be permitted to require Medicare eligible employees to switch to Medicare since that would be an improvement (!) in their benefits.  However, this will not apply to most employers.  So, unless you purchase your group health insurance from a 7-Eleven, you should probably avoid any policy requiring older workers to discontinue their employer-sponsored group health benefits.

This blog is presented under protest by the law firm of Ervin Cohen & Jessup LLP.  It is essentially the random thoughts and opinions of someone who lives in the trenches of the war that often is employment law–he/she may well be a little shell-shocked.  So if you are thinking “woohoo, I just landed some free legal advice that will fix all my problems!”, think again.  This is commentary people, a sketchy overview of some current legal issue with a dose of humor, but commentary nonetheless; as if Dennis Miller were a lawyer…and still mildly amusing.  No legal advice here; you would have to pay real US currency for that (unless you are my mom, and even then there are limits).  But feel free to contact us with your questions and comments—who knows, we might even answer you.  And if you want to spread this stuff around, feel free to do so, but please keep it in its present form (‘cause you can’t mess with this kind of poetry).  Big news: Copyright 2012.  All rights reserved; yep, all of them.

If you have any questions regarding this blog or your life in general, contact Kelly O. Scott, Esq. (who else would you contact?), commander in chief of this blog and Head Honcho (official legal title) of ECJ’s Employment Law Department, at (310) 281-6348 or

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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