Ruling favors AARP, older workers

By David B. Caruso
Associated Press

PHILADELPHIA — A federal judge yesterday barred the government from implementing a regulation that would have allowed companies to provide generous healthcare benefits to young retirees, but less coverage to those old enough to qualify for Medicare.

The AARP, the nation's largest advocacy group for retirees, sued in February to block the change, saying giving differing packages to the young and the old was age discrimination.

In ruling in the AARP's favor, U.S. District Judge Anita B. Brody said the U.S. Equal Employment Opportunity Commission lacked the power to implement the rule.

Brody said the proposed regulation would also violate an established legal precedent that companies may only offer different health plans to retirees of different ages if they are of equal value or provide equal benefits.

EEOC chairwoman Cari M. Dominguez said the agency would appeal and "remains confident on both policy and legal bases in its authority to implement the rule."

The EEOC had proposed exempting retiree health plans from age discrimination rules as part of an attempt to slow the trend of companies eliminating retiree health benefits altogether.

The proportion of companies with more than 1,000 workers offering health coverage to retirees dropped from 80 percent in 1991 to 57 percent in 2003, according to a recent study.

Large employers and some unions have argued that age discrimination rules were exacerbating the problem for people wanting to retire before age 65.