Employers can use Medicare for elders

Nancy Marshall-Genzer Dec 27, 2007

TEXT OF STORY

Lisa Napoli: The Equal Employment Opportunity Commission has ruled employers can take Medicare benefits into account when deciding how much health care coverage to give retired workers. The ruling allows employers to shift the burden of insuring retirees to the federal government. Marketplace’s Nancy Marshall Genzer has more.


Nancy Marshall Genzer: Basically, this ruling says employers, you can go ahead and spend more on benefits for younger workers, without violating age discrimination laws. Companies can now shift the health care burden to Medicare, once workers become eligible for Medicare benefits at age 65.

Trade groups for businesses say the new rule is a “victory for common sense.” Some unions agree. Brookings analyst Henry Aaron says that’s because the decision could actually help younger workers, once retirees are out of the picture.

Henry Aaron: The cost of insuring those who remain would go down. And therefore, continuing to offer coverage for the non-elderly could become more feasible, and more employers might be willing to do it.

But the AARP says the ruling legalizes age discrimination. It wants the Supreme Court to weigh in.

In Washington, I’m Nancy Marshall Genzer for Marketplace.

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