A new article published by Richard L. Kaplan, Nicholas J. Powers and Jordan Zucker in the Yale Journal of Health Policy, Law, and Ethics addresses the issues arising in the reduction and termination of retiree health benefits. Professor Kaplan is the Peer and Sarah Pedersen Professor of Law, University of Illinois. Here is an excerpt from the abstract:
The article next examines the extensive litigation regarding the erosion and/or termination of retiree health benefits, focusing on the Employee Retirement Income Security Act. Claims that retirees have ‘vested’ rights to such benefits are analyzed in both the unionized and nonunionized employment contents, as well as claims of breach of fiduciary duty and estoppel. In short, ERISA has largely failed to protect the reasonable expectations of retirees concerning their post-employment health benefits.
The article then turns to alternative approaches that retirees might consider, including continuation coverage from their former employer, individually obtained health insurance, and health savings accounts. Finding serious problems with each of these approaches, the article considers recent legislative proposals to extend Medicare to early retirees, noting the impact of such an extension on existing employer health benefit programs for retirees and on individuals’ retirement timing decisions.
The legal issues addressed in the article have broader applicability in ERISA welfare benefits litigation and cover the topics of fiduciary breach, “vesting” and estoppel.
The article is entitled Retirees at Risk: The Precarious Promise of Post-Employment Health Benefits(June 1, 2009). Yale Journal of Health Policy, Law, and Ethics, Vol. 9, No. 2, 2009; U Illinois Law & Economics Research Paper No. LE09-021 and is available for download at SSRN: http://ssrn.com/abstract=1445583