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EEOC Ruling on Retiree Benefits and Medicare

A ruling by the U.S. Equal Employment Opportunity Commission allows employers to reduce health benefits for employees over the age of 65 who are receiving (or are qualified to receive) Medicare benefits. The EEOC states that the rule was necessary in light of a 2000 federal appeals court decision which declared that if an employer provides retiree health benefits, the Age Discrimination in Employment Act requires that the health insurance benefits received by Medicare-eligible retirees be the same -- or cost the same -- as the health insurance benefits received by younger retirees. The new rule went into effect on December 26, 2007.

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