Supreme Court allows retiree benefit cuts

Employers may coordinate with Medicare on healthcare provisions for seniors. An AARP legal challenge is turned away.

By David G. Savage, Los Angeles Times Staff Writer
March 25, 2008

WASHINGTON -- The Supreme Court on Monday gave employers a green light to reduce health benefits for millions of retirees who turn 65 and become eligible for Medicare. The justices turned away a legal challenge from AARP, the nation's leading senior citizens lobby, which had contended these lower benefits for older retirees violated the federal law against age discrimination.

The court's action upholds, in effect, a rule adopted last year by federal regulators that says the "coordination of retiree health benefits with Medicare" is exempt from the anti-age-bias law.