Government Appeals Retiree Health Benefit Exemption Ruling

February 28, 2007 ( - Lawyers for the U.S. Equal Employment Opportunity Commission (EEOC) argued to a panel of federal appellate judges that employers should be allowed to cut off retiree health benefits without violating federal age discrimination employment laws.

The 3 rd  U.S. Circuit Court of Appeals panel in Philadelphia is considering an appeal of a ruling by U.S. District Judge Anita Brody of the U.S. District Court for the Eastern District of Philadelphia by AARP (See  AARP Appeals Ruling on Retiree Health Care ), allowing the EEOC to issue an age-bias law exemption for retiree health benefits, according to an Associated Press news report.

Brody first ruled in AARP’s favor, denying EEOC the authority to issue the exemption (See Federal Judge Tosses EEOC Retiree Health Benefit Exemption ). But, in September 2005, she reversed her ruling. However, she ordered that the effect of the ruling be delayed until the AARP had a chance to appeal to the 3 rd  Circuit.

Employers, who argued that it was in the public interest to allow the retiree health cutoff for those age 65 and older who are eligible for Medicare, applauded Brody’s decision to go the other way (See Employers Cheery Over Latest in ‘Erie County’ Retiree Benefits Controversy ). Businesses say the over-65 exemption to age-bias laws is necessary to stop the decline in employer-provided retiree health care benefits.

An advocacy group for people 50 and older, the AARP has argued that existing law allows businesses to offer cheaper Medicare supplements rather than full coverage to older retirees. “Employers get a free pass on Medicare,” AARP attorney Christopher Mackaronis told the appellate judges.

AARP claimed employers who only provided benefits for those not old enough to qualify for Medicare violated the age employment discrimination bars.