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The U.S. Equal Employment Opportunity Commission on Wednesday announced a new federal rule aimed at protecting retiree health benefits. The new regulation allows employers that provide retiree health benefits to continue coordinating those benefits with Medicare without violating the Age Discrimination in Employment Act. The rule is a response to a 2000 court decision in which the 3d U.S. Circuit Court of Appeals held that under the ADEA, health benefits received by Medicare-eligible retirees be the same, or cost the same, as benefits received by younger retirees. Erie County Retirees Ass’n v. County of Erie, 220 F.3d 193 (3d Cir. 2000). Labor unions and employers alike had argued that the ruling would force companies to reduce or eliminate retiree health benefits, leaving millions of retirees aged 55 and over with less health insurance, or no health insurance at all. Employers who provide retiree health benefits generally “coordinate” those benefits with Medicare by supplementing the government healthcare or by offering retirees a “bridge” benefit to cover health expenses after employees retire until they become Medicare-eligible. Before the 2000 ruling, employers believed that the ADEA permitted them to coordinate any retiree health benefits they provided with Medicare without having to ensure that the benefits received by Medicare-eligible retirees were the same as those received by younger retirees. “The Erie County decision would have made most existing retiree health plans unlawful,” EEOC Vice Chair Leslie E. Silverman said in a statement. “EEOC’s new rule will ensure that employers can continue to offer their retirees much needed health benefits.” The new rule is available on the EEOC’s website at www.eeoc.gov.

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