Employer-provided insurance at age 65
originally posted: 11/22/2006 reposted: 2/18/2011 This post has not been recently reviewed or revised by the author and may be out of date. If you notice an error or are in doubt, please send a new question by email or ask for an update. Email asktony@tonynovak.com.
Q: Can an employer cut health insurance benefits for employees at age 65 without risking a discrimination problem in the employee benefit plan?
A: Yes, assuming the employees are eligible for Medicare. There are no problems from a tax perspective but the issue is still the subject of some lingering litigation with regard to Equal Employment Opportunity Commission rules about age discrimination. Recently a federal judge in Philadelphia reversed an initial ruling against the practice and this reversal is expected to withstand further challenges. Small business owners can safely design their health benefits to allow Medicare to be the primary provider and employer-provided insurance (if any) can provide supplemental benefits.
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