The Association of U S West Retirees



AARP to appeal retiree health benefits case to Supreme Court    
By Susan Kelly
Financial Week
Friday, August 24, 2007

The AARP will appeal to the U.S. Supreme Court a decision that validates federal regulations allowing companies to provide different health benefits to younger retirees and those eligible for Medicare.

The AARP challenged the rules, issued in 2004 by the Equal Employment Opportunity Commission (EEOC), on the grounds that they violated the Age Discrimination in Employment Act.  The EEOC regulations said companies could reduce or eliminate health benefits for retirees eligible for Medicare — that is, those who are 65 and older — while continuing to offer health benefits for younger retirees.

In June, the Third Circuit Court of Appeals ruled in the EEOC’s favor, and earlier this week it denied the AARP’s petition that it rehear the case.

On Thursday, the AARP asked the U.S. District Court for the Eastern District of Pennsylvania to continue its stay on the EEOC regulations while the association appeals the case to the U.S. Supreme Court.

“A case with such huge implications for the scope of executive rule-making power will undoubtedly capture the court’s attention and is an extremely strong candidate for Supreme Court review,” the AARP said in its filing.

Employer organizations argue that if companies are not allowed to reduce benefits once retirees are eligible for Medicare, they may eliminate retiree health benefits altogether.