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February 07, 2005
AARP Lawsuit Delays Retiree-Benefit Rule

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.

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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.


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