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Retiree Health Benefit Integration With Medicare May Be Illegal

August 01, 2000

By Ethan Lipsig

In its very lengthy August 1, 2000 Erie County Retirees Ass’n v. Erie decision, a divided Third Circuit panel (one judge dissented on procedural grounds) held that the Age Discrimination in Employment Act prohibits discriminatory retiree health benefits. This is a very scary decision for employers that provide retiree health benefits that either (a) cease with Medicare eligibility, or (b) are reduced after Medicare eligibility, if the combination of Medicare and retiree health benefits is less favorable to retirees than pre-Medicare retiree coverage.

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