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October 05, 2000
EEOC Issues Q & A's and Discrimination Guidance for Benefits
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HINGTON - The U.S. Equal Employment Opportunity Commission has issued a new section to its Compliance Manual that helps employers understand issues surrounding discrimination on important employee benefits laws. Along with that it has developed some useful Questions and Answers that will help explain what to do under specific regulatory situations such as ADA.

The new Compliance Manual section analyzes benefit discrimination claims under each of the laws enforced by the Commission, clearly explaining that the laws prohibit discrimination in fringe benefits. "This guidance makes clear that employers are never allowed to consider employees' race, color, sex, national origin, or religion, nor retaliate against them, in connection with their benefits plan," said EEOC Chairwoman Ida L. Castro "The section also explains that benefit plan provisions that differentiate on the basis of age or disability must be carefully scrutinized to ensure they do not run afoul of the law."

All types of benefits affected

The section examines the legal standards that apply to claims of discrimination in health and life insurance benefits, long-term and short-term disability benefits, severance benefits, pension or other retirement benefits, and early retirement incentives. The limited circumstances in which the law permits employers to provide lower benefits to older employees than to younger workers and the specific requirements of the Americans with Disabilities Act are set forth.

Ms. Castro added: "Issuing this new section is a major step in EEOC's continuing efforts to update and streamline its Compliance Manual in order to aid our investigators and attorneys in handling claims involving discrimination in employee benefits while also enhancing our customer service." The new Compliance Manual section replaces former Section 627: Employee Benefit Plans and seven other Commission policy statements.

This is the second issuance of new sections to the Compliance Manual in recent months. In May, EEOC issued a new section on "threshold" issues, the factors considered by the Commission in determining who can pursue a legal claim of employment discrimination. The full text of the both new sections, as well as other information about the Commission, is available on the agency's web site at www.eeoc.gov. http://www.eeoc.gov/docs/benefits.html

Here are some of the Q & A's the EEOC now has on-line for employers

AMERICANS WITH DISABILITIES ACT

Does the ADA bar discrimination on the basis of disability in benefits?

*Yes. Employers may not make disability-based distinctions in employee benefits unless they can show that the distinction is not a subterfuge to evade the purposes of the ADA.

What is a disability-based distinction?

* A disability-based distinction singles out for different treatment (a) a particular disability; (b) a discrete group of disabilities; or (c) disability in general. For example, a cap on the health insurance benefits that an employer will pay for AIDS is a disability-based distinction.

A benefit plan provision that applies to a number of dissimilar conditions, and that affects both individuals with and individuals without disabilities, is not a disability-based distinction. It is not a disability-based distinction, for example, if an employer's health insurance plan has a waiting period for pre-existing conditions.

Distinctions that are not disability-based do not violate the ADA.

What is a subterfuge to evade the purposes of the ADA?

*A subterfuge is a disability-based distinction that an employer cannot justify. The ADA provides for several types of justifications. For example, an employer will not violate the ADA if a disability-based distinction is justified by actuarial data or is necessary to avoid prohibitive increases in the premiums for other employees.

May an employer provide different benefits in its disability retirement and service retirement plans?

* Yes. Because disability retirement and service retirement plans serve two different purposes, the ADA does not require that they each provide the same benefits. The ADA is satisfied as long as all employees may participate in the service retirement plan on the same terms, regardless of the existence of a disability.

TITLE VII/EPA

Discrimination Based on Sex, Race, Color, National Origin, or Religion

Does Title VII ever permit employers to take sex, race, color, national origin, or religion into account in their benefit programs?

* No. An employer is never permitted to consider these factors in connection with its benefit programs.

How does this rule apply to health plans?

* An employer must provide identical coverage to men and women if both men and women can contract a condition or benefit from a treatment or test. Sometimes an employer will use a neutral standard to exclude treatment for a condition that only, or disproportionately, affects members of one sex, race, or other protected group. For example, an employer might refuse to cover certain treatments for breast cancer as "experimental." In that case, the employer would have to show that its standard was neutrally applied and is based on generally accepted medical criteria.

Discrimination Based on Pregnancy, Childbirth, or Related Medical Conditions

What does the Pregnancy Discrimination Act (PDA) require with regard to employee benefits?

* The PDA requires that women who are affected by pregnancy, childbirth, or related medical conditions be treated the same as any other employee who is similarly able or unable to work. Where an employer offers benefits of any sort, therefore, it must cover pregnancy and related medical conditions in the same way that it covers other medical conditions.

For more Questions and Answers go to: http://www.eeoc.gov/docs/qanda-benefits.html

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