WASHINGTON (AP) - The Supreme Court on Monday let stand a federal policy
that allows employers to reduce their health insurance expenses for retired
workers once they turn 65 and qualify for Medicare.
The justices turned down an appeal by the 39-million-member AARP to undo a
rule that essentially allows employers to treat retirees differently depending
on their age.
The rules were put into place by the federal Equal Employment Opportunity
Commission, with the support of labor unions and other groups. They worried that
employers would greatly reduce or eliminate health benefits for millions of
retirees if they could not take Medicare into account when structuring the
health benefit packages they voluntarily provide their retired workers.
The EEOC rule makes clear that employers can spend more on retirees under 65
years of age than those over 65 without running afoul of age discrimination
laws.
The EEOC said it proposed the rule in response to a decision in 2000 by the
3rd U.S. Circuit Court of Appeals in Philadelphia that held that the Age
Discrimination in Employment Act requires employers to spend the same amount on
health insurance benefits provided Medicare-eligible retirees as those received
by younger retirees.
AARP said EEOC violated the intent of Congress when it proposed the rule.
But the EEOC said the same age discrimination law allows it to carve out an
exemption to preserve the long-standing practice that allows employers to
coordinate benefits with Medicare.
The same appeals court upheld the EEOC policy last year and the new rule
took effect in December.
AARP legislative policy director David Certner said the rule creates a
double standard.
"Beyond blatant age discrimination, the new policy is an ineffective
Band-Aid for the bigger issue facing American employers and workers: the
skyrocketing cost of health care," Certner said.
The case is AARP v. EEOC, 07-662.
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