High Court Lets Retiree Benefits Ruling Stand

Both the appeals court ruling and the EEOC guidance are based on a section of the ADEA that gives the EEOC the authority to provide reasonable exceptions to any and all provisions of the ADEA if the EEOC finds the exceptions to be in the public interest.

The AARP, Washington, which asked the Supreme Court to review the 3rd Circuit ruling, says it is deeply disappointed about the Supreme Court’s refusal to take up the case.

“The court’s action clears the way for employers to discriminate by reducing or terminating benefits for older retirees simply because they’ve turned 65 years old,” says AARP Legislative Policy Director David Certner.

If the EEOC had not established a two-tier system for retiree benefits, employers would have had the authority under an earlier court ruling to simply reduce or eliminate retiree health benefits altogether “in a manner that treated pre-Medicare-eligible and Medicare-eligible retirees equally,” EEOC officials argued in a brief.

The American Benefits Council, Washington, also is welcoming the Supreme Court ruling.

If employers could not coordinate retiree health coverage with Medicare “employers would — for practical purposes — have been compelled to reduce retiree health benefits for younger retirees not eligible for Medicare,” ABC President James Klein says in a statement.