ERISA Benefits Law Desk ReferenceERISA Benefits Tech, LLC

Part 13 · Chapter 6

Retiree Medical and Medicare Coordination

Law stated as of October 3, 2026 · COBRA, HIPAA, and Welfare Benefits

Scope and status

This chapter covers employer-sponsored retiree health: whether the benefit is vested after Tackett and Reese, the funding vehicles (pay-as-you-go, VEBAs, §401(h) accounts, and §420 transfers), Medicare Secondary Payer coordination, Part D creditable coverage disclosure, the HSA/Medicare enrollment traps, and the retiree-only plan, COBRA, and ADEA interactions. For retiree-plan litigation strategy, see Part 23 (ERISA Disputes, Enforcement, Preemption, and Remedies); the §420 transfer funding mechanics to Part 7 (Defined Benefit and Hybrid Plans) (unit A10); ACA market-reform application and excepted/retiree-only status to Part 14 (ACA Employer Mandate and Health Reform) (unit D2); and COBRA administration to the COBRA continuation-coverage chapter in this Part.

Sections

Part A is shown in full. The other sections are listed by title; their text is available to subscribers.

Part A — Is the Benefit Vested?

A1.The statutory baseline: welfare benefits do not vest by law

Part 13, ch. 6, § A1

ERISA's minimum vesting and funding rules apply to pension plans only; welfare plans are expressly exempt. Statute: ERISA §201(1), §301(a)(1), 29 U.S.C. §§1051(1), 1081(a)(1). An employer is therefore generally free to amend or terminate retiree health at will unless it contracted away that right. Statute: ERISA §201(1); Case law: Supreme Court — Curtiss-Wright Corp. v. Schoonejongen, 514 U.S. 73 (1995).

A2.M&G Polymers v. Tackett — the end of the Yard-Man inference

Part 13, ch. 6, § A2

The Supreme Court unanimously rejected the Sixth Circuit's Yard-Man presumption that retiree health benefits under a collective bargaining agreement vest for life absent express language to the contrary, holding that CBAs are interpreted under ordinary principles of contract law with no thumb on the scale for vesting. Case law: Supreme Court — M&G Polymers USA, LLC v. Tackett, 574 U.S. 427 (2015). The Court specifically disapproved inferring vesting from silence as to duration, from tying eligibility to pension eligibility, and from reasoning that a non-vested promise would be illusory; and it directed courts to give effect to a CBA's general durational clause. Case law: Supreme Court — Tackett.

A3.CNH Industrial v. Reese — silence plus a durational clause is not ambiguity

Part 13, ch. 6, § A3

Three years later the Court summarily reversed the Sixth Circuit again, holding that a contract is not rendered ambiguous merely because it is silent on the duration of retiree benefits where a general durational clause applies; the court of appeals' use of Yard-Man-style inferences to create ambiguity — and thereby open the door to extrinsic evidence — was inconsistent with ordinary contract principles. Case law: Supreme Court — CNH Industrial N.V. v. Reese, 583 U.S. 133 (2018) (per curiam). Case law: Circuit — Kaiser v. Alcoa USA Corp., No. 25-1627 (7th Cir. Aug. 14, 2026).

A4.The reservation of rights, and where it has to live

Part 13, ch. 6, § A4

An effective reservation of the right to amend or terminate must appear in the plan document, be reflected in the SPD, and — for a bargained plan — survive the CBA's own terms. ERISA requires the plan to specify an amendment procedure, and a clause reserving amendment to the company satisfies it. Statute: ERISA §402(b)(3); Case law: Supreme Court — Curtiss-Wright. Note that SPD statements do not themselves constitute the terms of the plan where a governing plan document exists, so SPD language cannot add to or contradict that document. Where the SPD is adopted as the plan instrument, some circuits treat it as a formal plan document Case law: Circuit — Mull v. Motion Picture Indus. Health Plan, 865 F.3d 1207 (9th Cir. 2017) — but misleading SPD or communication statements remain the basis for §502(a)(3) equitable relief. Case law: Supreme Court — CIGNA Corp. v. Amara, 563 U.S. 421 (2011).

A5.Non-bargained retiree health

Part 13, ch. 6, § A5

Outside the CBA context the same ordinary-contract analysis applies, and a clear, consistently communicated reservation of rights generally defeats a vesting claim. Case law: Circuit — Sprague v. General Motors Corp., 133 F.3d 388 (6th Cir. 1998) (en banc); Practitioner consensus. The residual exposure is estoppel and §502(a)(3) claims built on individualized representations.

A6.Changing or terminating retiree coverage

Part 13, ch. 6, § A6

Amending or terminating a retiree health plan is a settlor act, not a fiduciary one; administering it is fiduciary. Case law: Supreme Court — Curtiss-Wright; Statute: ERISA §404(a). In a Chapter 11 case, retiree benefits cannot be unilaterally modified — the debtor must proceed through the statutory process for modifying retiree benefits. Statute: 11 U.S.C. §1114.

Part B — Funding Vehicles

  1. B1Pay-as-you-goSubscribers
  2. B2VEBAsSubscribers
  3. B3The collectively bargained exception, and the abusive-arrangement trapSubscribers
  4. B4§401(h) accountsSubscribers
  5. B5§420 transfers of excess pension assetsSubscribers

Part C — Medicare Secondary Payer

  1. C1The frameworkSubscribers
  2. C2The point that makes retiree coverage work — and the ESRD exception that breaks itSubscribers
  3. C3The prohibitionsSubscribers
  4. C4Recovery, and the reporting regimeSubscribers

Part D — Medicare Part D Creditable Coverage

  1. D1The two disclosuresSubscribers
  2. D2Why the notice mattersSubscribers
  3. D3The live currency item — the IRA redesign broke the old simplified methodSubscribers
  4. D4The employer's Part D optionsSubscribers

Part E — HSA and Medicare Enrollment Traps

  1. E1The eligibility ruleSubscribers
  2. E2The six-month retroactivity trapSubscribers
  3. E3Related mechanicsSubscribers
  4. E4The employer's exposureSubscribers

Part F — Adjacent Regimes

  1. F1Retiree-only plans are outside the market reformsSubscribers
  2. F2COBRA interactionsSubscribers
  3. F3Age discrimination — the Medicare-coordination exemptionSubscribers
  4. F4Fiduciary and claims postureSubscribers

The first Part of each chapter is open to everyone. The remaining sections, with their authority and practice points, are available to subscribers and to clients of ERISA Benefits Law Group, PLLC whose engagement includes access.

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