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Rule Threatens Retiree Health Benefits

New regulation allows bosses to dump health insurance for those over 65

By Rob Quinn,  Newser Staff

Posted Dec 27, 2007 5:00 AM CST

(Newser) – A new policy will let employers cut or drop medical benefits for retirees once they pass the age of 65 and qualify for Medicare. The Equal Employment Opportunity Commission has created a specific exemption from age discrimination rules that will allow employers to create two classes of retirees with different benefits, the New York Times reports.

The AARP slammed the policy shift, but representatives for both employers and labor groups said the change was needed, pointing out that those ineligible for Medicare need the benefits more. "If companies had to provide identical benefits for retirees under 65 and over 65, they would drop benefits altogether for both groups,” a commission lawyer noted.

Members of AARP listen as California Gov. Arnold Schwarzenegger calls for health care reform during a rally. The AARP attacked the new rule from the Equal Employment Opportunity Commission, saying it could adversely affect ten million people. (AP Photo/Rich Pedroncelli)
Members of AARP listen as California Gov. Arnold Schwarzenegger calls for health care reform during a rally. The AARP attacked the new rule from the Equal Employment Opportunity Commission, saying it...   (Associated Press)
A new regulation from the Equal Employment Opportunity Commission will allow employers to cut back or drop medical benefits to retired employees once they qualify for Medicare. (AP GRAPHIC)
A new regulation from the Equal Employment Opportunity Commission will allow employers to cut back or drop medical benefits to retired employees once they qualify for Medicare. (AP GRAPHIC)   (Associated Press)
A senior registers for Medicare. An exemption to age bias rules means employers will now be able to distinguish between retirees over 65 who qualify for Medicare, and younger ones who don't.
A senior registers for Medicare. An exemption to age bias rules means employers will now be able to distinguish between retirees over 65 who qualify for Medicare, and younger ones who don't.   (Getty Images)
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