U.S. Ruling Backs Benefit Cut at 65 in Retiree Plans

Something to be aware of if considering early retirement....employers have options to exercise with those who qualify for Medicare...BD

In general, the commission observed, employers are not required by federal law to provide health benefits to either active or retired workers.  . “This rule gives employers free rein to use age as a basis for reducing or eliminating health care benefits for retirees 65 and older,” said Christopher G. Mackaronis, a lawyer for AARP, which represents millions of people age 50 or above and which had sued in an effort to block issuance of the final regulation. “Ten million people could be affected — adversely affected — by the rule.”

Dianna B. Johnston, a lawyer for the commission, said many employers and labor unions had told it that “if they had to provide identical benefits for retirees under 65 and over 65, they would just drop retiree health benefits altogether for both groups.”  Under the new rule, employers may, if they choose, provide retiree health benefits “only to those retirees who are not yet eligible for Medicare.” Likewise, the rule says, retiree health benefits can be “altered, reduced or eliminated” when a retiree becomes eligible for Medicare.

In a preamble to the new regulation, published Wednesday in the Federal Register, the commission said, “The final rule is not intended to encourage employers to eliminate any retiree health benefits they may currently provide.”

U.S. Ruling Backs Benefit Cut at 65 in Retiree Plans - New York Times