Employers are free to modify health care benefits for retirees as soon as they become eligible for Medicare now that a federal appeals court has rejected a challenge to a regulation passed by the Equal Employment Opportunity Commission that approved the practice.

In AARP v. EEOC, the 3rd U.S. Circuit Court of Appeals held that the EEOC has broad powers to create “exemptions” for practices that would otherwise violate federal age discrimination laws.

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