Benefits September 20, 2007

EEOC Accuses Baltimore County of Age Discrimination

September 20, 2007 (PLANSPONSOR.com) - The Equal Employment Opportunity Commission (EEOC) claims the Baltimore County government makes older employees pay more for their pensions by illegally forcing some older workers to contribute at a higher rate.
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The complaint filed by the EEOC in the U.S. District Court for the District of Maryland on behalf of two retired correctional officers claims the county has illegally forced some workers older than 40 to contribute to the county’s pension system at a higher rate than that required of younger workers.

Maria Salacuse, an EEOC lawyer, told the Baltimore Sun that under the county’s plan, a younger worker’s take-home pay would be larger than an older worker’s, even if they were paid the same salary.

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This would violate the federal Age Discrimination in Employment Act, which prohibits discrimination through compensation against workers older than 40, according to Salacuse.

The EEOC is asking for a change in the pension system and that the two former correctional officers and others be reimbursed for money it says was wrongfully withheld from their paychecks.

Donald I. Mohler, the spokesman for County Executive James Smith Jr., told the newspaper that the county’s plan has largely remained intact for six decades.

The plan covers 9,500 active employees and 6,600 retired employees. The percentage of a worker’s paycheck that goes into the system is based on the worker’s age at the start of employment, Mohler said. For most government employees, the percentage generally ranges from 4.4% to 11%.

“The bottom line is the EEOC doesn’t recognize the time value of money,” Mohler told the newspaper. “An employee who comes to the county at 55 has less time for the county to build up their retirement fund than someone at age 20 who comes in.”

The EEOC lawsuit is here .

Benefits September 19, 2007

Segal: Health Plan Costs Remain Above Inflation

September 19, 2007 (PLANSPONSOR.com) - Medical and prescription drug trends are expected to decline further in 2008 according to the Segal Co., but health plan costs still hover above inflation.
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Projected trend cost increases for point-of-service (POS) medical plans (including prescription drugs) for active employees and retirees under 65 have declined from a high of 14.9% in 2003 to 11% in 2007 and are projected to be 10.5% for 2008.

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Health maintenance organization (HMOs) (including prescription drugs) rates were 11.7% in 2007 and are expected to drop to 10.7% in 2008. Medicare Advantage HMO plans have the lowest projected medical cost trend for 2008 at 8.8%.

Prescription drug price hikes for active workers and retirees were 11.9% in 2007 and are projected at 10.7% for next year. Prescription drug projected cost trends have declined dramatically, by nearly nine percentage points, since their high of 19.5% in 2003.

Dental rates are expected to go down for all types of plans. However, fixed-scheduled plans and dental maintenance organizations (DMOs) have the lowest forecasted rates: 4.3%.

The survey also looked at medical trends by service type. For example, price inflation per hospital admission is expected to increase by 7.7% in 2008 for open-access PPO plans and prescription drug price inflation is projected to be 6.5%, whereas price inflation for physician services is forecasted to be at 4%.

The survey found some regional variation in medical trend projections – ranging from a low of 9.4% in the Midwest to a high of 11.7% in the West.

For a full copy of the Segal report go here .

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