AARP Seeks U.S. Supreme Court Ruling That EEOC Lacks Authority To Allow Employers To Reduce Health Care Benefits For Medicare-Eligible Retirees

Main Category: Health Insurance / Medical Insurance
Also Included In: Seniors / Aging;  Medical Malpractice / Litigation
Article Date: 07 Jan 2008 - 10:00 PDT

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AARP has petitioned the U.S. Supreme Court to review whether the Equal Employment Opportunity Commission had the authority to issue a Dec. 26, 2007, regulation that allows employers to legally eliminate or reduce health benefits for retirees when they reach age 65 and become eligible for Medicare while retaining benefits for retirees under age 65, CQ HealthBeat reports (Reichard, CQ HealthBeat, 1/3).

The ruling allows employers to create two classes of retirees -- those younger than age 65 and those older than 65 -- and offer different benefits to each group. In addition, the ruling allows employers to eliminate or reduce benefits provided to spouses or dependents of retirees older than 65. EEOC proposed the rule in response to a 2000 U.S. Court of Appeals decision that required benefits to be offered at the same level for Medicare-eligible retirees and those younger than 65 (Kaiser Daily Health Policy Report, 1/2). A June 2007 decision by the Third Circuit Court of Appeals found that EEOC has the authority to create the exemption under the Age Discrimination in Employment Act.

AARP on Nov. 20, 2007, filed a petition in response to the Third Circuit decision. The petition states, "The court of appeals affirmed an 'exemption' that is admittedly in direct conflict with the plain terms of the (Age Discrimination in Employment Act)," adding that the decision "threatens to undermine the constitutional balance between congressional legislation and executive agency rulemaking." The decision's "misguided approach threatens the health care benefits of approximately 10 million older Americans," according to the petition.

AARP Legislative Policy Director David Certner in a statement said, "It is a wrong-headed move to legalize discrimination, allowing employers to back off their health care commitments based on nothing more than age," adding, "By transferring health care costs, the EEOC merely passes the buck to those who can little afford it."

AARP spokesperson Drew Nannis said the organization expects to know in February if the court will review the case (CQ HealthBeat, 1/3).

Reprinted with kind permission from http://www.kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, or sign up for email delivery at http://www.kaisernetwork.org/dailyreports/healthpolicy. The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation© 2005 Advisory Board Company and Kaiser Family Foundation. All rights reserved.