The U.S. Equal Employment Opportunity Commission (EEOC) has finalized a rule that permits employers to coordinate retiree health benefits with Medicare or comparable state benefits, without running afoul of the federal Age Discrimination in Employment Act (ADEA).
The agency adopted the rule in response to a controversial federal court decision several years ago holding that the ADEA requires that the health insurance benefits received by Medicare-eligible retirees be the same, or cost the employer the same, as the health insurance benefits received by younger retirees. After that court ruling, labor unions and employers took the position that compliance with the decision would have the unintended effect of forcing employers to reduce or eliminate retiree health benefits they currently provided, at the risk of leaving millions of retirees with less health insurance or none at all.
Additional Resources:
Final Rule: Age Discrimination in Employment Act; Retiree Health Benefits
Questions and Answers About the EEOC’s Retiree Health Rule
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