The justices turned down an appeal by the 39-million-member AARP to undo a rule that essentially allows employers to treat retirees differently depending on their age.

The rule was put into place by the federal Equal Employment Opportunity Commission, with the support of labor unions and other groups. They worried that employers would greatly reduce or eliminate health benefits for millions of retirees if they could not take Medicare into account when structuring the health-benefit packages they voluntarily provided their retired workers.

The EEOC rule makes clear that employers can spend more on retirees under 65 years of age than those over 65 without running afoul of age-discrimination laws.

The EEOC said it had proposed the rule in response to a decision in 2000 by the U.S. Court of Appeals for the Third Circuit in Philadelphia holding that the 1967 Age Discrimination in Employment Act required employers to spend the same amount on health insurance benefits provided to Medicare-eligible retirees as on those received by younger retirees.

AARP said the EEOC had violated the intent of Congress when it proposed the rule.

But the EEOC said the age-discrimination law permitted it to carve out an exemption to preserve the long-standing practice that allowed employers to coordinate benefits with Medicare.

The same appeals court upheld the EEOC policy last year, and the new rule took effect in December.

AARP legislative policy director David Certner said the rule created a double standard.

"Beyond blatant age discrimination, the new policy is an ineffective Band-Aid for the bigger issue facing American employers and workers: the skyrocketing cost of health care," Certner said.