• The OWBPA prohibits age discrimination in the provision all employee benefits, including life and health insurance, disability, pensions, and retirement benefits.
• Employers, however, can reduce benefits to older employees when age-based reductions in employee benefit plans are justified by significant cost considerations.

In 1990, the Older Workers Benefit Protection Act (OWBPA) amended the Age Discrimination in Employment Act (ADEA) to make it illegal for an employer to:

• Use an employee’s age to discriminate in the provision of benefits;
• Target older employees in staff reduction efforts; and
• Require older employees to waive their rights without observing certain safeguards.

Benefit protections

The OWBPA prohibits age discrimination in the provision all employee benefits, including life and health insurance, disability, pensions, and retirement benefits. Generally, employers must provide older employees benefits equal to younger employees.

Exceptions — Employers, however, can reduce benefits to older employees when age-based reductions in employee benefit plans are justified by significant cost considerations. For example:

• Employers might avoid discrimination by spending the same amount on the benefit provided to each group, even if older employees receive lesser benefits as a result.
• Employers are also allowed to provide lesser benefits to older employees if the older employees receive additional benefits from the government or the employer that make up the difference.