Can Employers Deny Benefits to Older Employees?


Posted by: Chris

The cost of providing life insurance, health insurance, and other benefits to an employee increases as the employee grows older. For this reason, some employers may try to deny benefits to older workers in order to cut costs. But is this legal? Here’s what you should know to protect your rights:

What is the Older Workers Benefit Protection Act (OWBPA)?

Passed in 1990, the OWBPA strengthens the protections provided to older workers under the Age Discrimination in Employment Act (ADEA). The OWBPA specifically prohibits employers from denying benefits to employees who are 40 years of age or older. Thanks to this law, employers cannot refuse to provide benefits to an older employee simply because of their age. Doing so would be a form of age discrimination prohibited by federal law. 

Do Employers Have to Provide Equal Benefits to Employees?

The law does allow employers to provide lesser benefits to older workers under certain circumstances. An employer may offer an older worker lesser benefits than a younger worker if the following conditions are met: 

  • The cost of the benefits must increase with the employee’s age. For example, the cost of providing paid vacation days does not increase with an employee’s age, but the cost of providing health insurance might. Therefore, an employer cannot offer fewer paid vacation days to an older worker, but an employer may be able to legally offer lesser health insurance benefits.
  • The terms of the benefit have been described to employees in writing. 
  • The plan requires employers to offer lesser benefits to older employees. 
  • The cost of providing the lesser benefit to an older worker is the same as the cost of providing the greater benefit to a younger worker. When making these comparisons, employers cannot use age brackets of more than five years. For example, an employer can compare the cost of providing benefits to employees who are between the ages of 61 to 65 with the cost of providing benefits to employees who are between the ages of 56 to 60. 

If these conditions are met, it is legal for an employer to offer lesser benefits to an older worker. Even though older workers would receive lesser benefits, this is not considered age discrimination.

Have you been denied benefits due to your age? If so, seek legal representation from the attorneys at Armstrong & Vaught, P.L.C. as soon as possible. As a victim of age discrimination, you could be entitled to compensation, and our attorneys will work tirelessly to help you obtain it. Call us now at 918-582-2500, toll free at (800) 722-8880, or contact us online for a free consultation with a skilled attorney.