Tuesday, March 25, 2008
The Supreme Court on Monday gave employers a green light to reduce health benefits for millions of retirees who turn 65 and become eligible for Medicare. The justices turned away a legal challenge from AARP, the nation's leading senior citizens lobby, which had contended these lower benefits for older retirees violated the federal law against age discrimination. The court's action upholds, in effect, a rule adopted last year by federal regulators that says the "coordination of retiree health benefits with Medicare" is exempt from the anti-age-bias law. Advocates for companies and labor unions openly disagreed with AARP and applauded the outcome. They said this compromise rule will encourage employers to maintain health coverage for their retirees. Otherwise, employers might drop all benefits for their former employees, they said. They said it will prove especially helpful to those younger retirees who were offered continued healthcare when they left full-time work.