AARP has a filed a lawsuit to block a U.S. Equal Employment Opportunity Commission
rule that would allow employers to coordinate retiree health benefits with Medicare
eligibility without violating non-discrimination law, Reuters reports.
A federal judge has delayed implementation of the rule for sixty days while
AARP pursues the lawsuit.
"We took this action to protect our members and all retirees from losing
their rights under the age discrimination laws" says David Certner, director
of federal affairs at AARP. "This would have put millions of retirees at greater
risk for losing their retiree health coverage."
In the lawsuit, AARP alleges the EEOC acted outside its authority in approving
the rule, and that the rule would lead to employers cutting the health benefits
of retirees. The EEOC disputes AARP's claims.
"The commission is confident--on both policy and legal bases--in its authority
to implement the rule, and is prepared to defend that position," says Cari
M. Dominguez, chair of the EEOC.
The EEOC contends it acted with the intent of protecting the health benefits
of retirees as employers face soaring healthcare costs, saying that barring the practice of coordination of benefits for
retirees could have the unintended consequence of discouraging employers from offering health benefits to all retirees, including
those under the age of 65.
In April, the EEOC disclosed that it had approved a rule that would allow employers
to reduce or eliminate health benefits once retirees become eligible for Medicare
without violating the Age Discrimination in Employment Act.
In 2000, the U.S. Court of Appeals for the Third Circuit ruled that the Age
Discrimination in Employment Act requires employers to ensure that pre- and
post- Medicare eligible retirees receive health benefits of equal type and value.