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Home > Resources > PAF Publications > PAF Guides & Major Publications > First My Illness... > How Can PAF Help You? > Section 2

Issues Involving Anti-Discrimination Statutes

TITLE VII and the ADA
Weinhaus and Dobson
Sheldon Weinhaus, Esq.
906 Olive Street, #900
St. Louis, MO 63101


Americans with Disabilities Act
d.
Title I of the ADA prohibits employers and those acting for employers, from discriminating as to fringe benefits, against those with disabilities. 42 U.S.C. §12112(b)(2) and (b)(3)(a). See 29 C.F.R. §1630.5.
i.
Effective date: July 26, 1992 for employers employing 25 or more employees.
ii.
"Employer" is defined broadly to include "any agent of such person" and could therefore include insurers who retain the right to amend the group health insurance policy from time to time, as some insurers do. 42 U.S.C. §12111(5)(A). As noted above, one question now posed in the pending Missouri cases against Blue Cross is whether the insurer’s seizure of the employer’s power to amend plan benefits and change benefit levels whenever the insurer wishes, makes itindependently liable as employer or as to benefits, co-employer.
iii.
If the beneficiary is a COBRA continuee, can that person claim coverage or must that claimant claim coverage only as a qualified individual with a disability? The Eleventh Circuit has determined former employees cannot qualify as a qualified individual with a disability. 42 U.S.C. §12112(a). Gonzales v. Garner Food Services, Inc., 855 F.Supp. 371 (N.D. 1994), affirmed 89 F.3d 1523, 5 AD Cases 1202 (11th Cir. 1996). The decision in Robinson v. Shell Oil Co., 519 U.S. 337, 117 S.Ct. 843, 72 FEP 1856 (1997), finding terminated workers may under certain circumstances be treated as employees under Title VII CRA anti-retaliation provisions, may have some bearing on the future development of the status of former employees. See, e.g., McKeever v. Ironworkers’ District Council, 73 FEP 1000 (E.D. Pa. 1997) (ADEA applies to protect retirees from discontinuance of health care benefits if benefits continued for active workers). Moreover, as to health care benefits, as distinguished from disability benefits, query whether "former employee" has any meaning in light of the COBRA requirement the continuee stand in the shoes of a substantially similar active employee? 29 U.S.C. §1162.

Recently in Ford v. Schering-Plough Corp., 145 F.3d 601, 8 AD Cases 190 (3rd Cir. 1998), held that disabled former employees may sue under Title I, need not be an employee able to work with or without reasonable accommodation at time suit is brought. But court held ADA does not require under either Titles I and III equal insurance coverage as between those suffering from physical or mental disabilities, looks at Congressional history after enactment of the ADA for Congress’ intentions. Court rejects an insurance policy as a public accommodation. Court also disagrees about subterfuge language in ADA 501c safe harbor provision, demanding subterfuge still meant what it did (Public Employees Retirement Sys. of Ohio v.Betts, 492 U.S. 158 (1988)) before the 1991 CRA and OWBPA amendments. Courts are fearful of "destabilizing" insurance industry which according to an OTA assessment and DOJ preamble to ADA, decides coverage questions on subjective basis, not on basis approved in safe harbor provision.

The Second Circuit likewise does not require active employee status for standing to sue under the ADA. In Castellano v. New York, and Graboski v. Giulani, it permitted disabled retirees to sue for ADA discrimination, there the failure to allow them enhanced retirement benefits because they did not have at least 20 years of active service. 25 BPR 579; 21 EBC 2697. On the merits no discrimination was found, since disabled employees with 20 years of active service were entitled to the same enhancement.
iv.
The EEOC’s guidelines indicate it believes dependents are protected by ADA, and Henderson v. Bodine Aluminum, Inc., supra, involved medical treatment for a dependent of a worker who alleged no disability himself. The EEOC has argued Title I even protects the COBRA continuee. There is a further possibility under ERISA: the right of the COBRA continue to the same benefits as similarly situated employees. 29 U.S.C. §1162.

e.
There is now a clear split in the circuits as to whether Title III (public accommodations) may apply to insurance coverage as well. 42 U.S.C. §12182(b)(7)(F). Carparts Distribution Center v. Automotive Wholesalers’ Association, 37 F.3d 12 (1st Cir. 1994). While two district courts early on rejected Carparts, Parker v. Metropolitan Life Ins. Co., 875 F.Supp 1321 (W.D. Tenn. 1995), affirmed 6 AD Cases 1865, 121 F.3d 1006 (6th Cir. 1997), cert. denied, 1998; Pappas v. Bethesda Hosp. Assn, 861 F.Supp. 616 (S. D. Ohio 1994), others felt the analysis of the court of appeals in the 1st Circuit is superior. See, e.g., Baker v. Hartford Life Ins. Co., 6 AD Cases 135 (N.D. Ill. 1995); Kotev v. First Colony Life Ins. Co., 927 F.Supp. 1316 (C.D. Cal. 1996), See also Schroeder v. Connecticut General Life Ins. Co., 943 F.Supp. 1304 (D. Colo. 1994) (ADA prohibits differential treatment of individuals with disabilities in insurance matters, both employer and its insurer); Anderson v. Gus Mayer Boston Store of Delaware, 924 F.Supp. 763 (E.D. Tex. 1996) (ADA Title III covers employer’s denial of group health insurance to HIV-positive worker); Cloutier v. Prudential Ins. Co., 964 F.Supp. 299 (C.D. Cal. 1997) (refusal to issue life insurance policies to spouses/life partners of HIV-positive individuals, violates ADA III; insurer required forward with data if it attempts to use "safe harbor" exception); Doukas v. Metropolitan Life Ins. Co., 950 F.Supp. 422 (D. N.H. 1996) (Title III applies to insurance discrimination against those with psychological/psychiatric maladies); World Ins. Co. v. Branch, 966 F.Supp. 1203 (N.D. Ga. 1997) (health care cap of $5,000 for those with AIDS, when others given $2 million cap, illegal under ADA); Doe v. Chubb Sovereign Life Ins. Co., F.Supp. (N.D. Cal. 1996) (ADA Title III covers insurer’s refusal to cover HIV-negative application whose spouse was HIV positive); Doe and Smith v. Mutual of Omaha Ins. Co., No. 98C0325 (N.D. Ill. 1998) (Title III protects AIDS victims from getting smaller lifetime caps that insurer
gives to others), reversed, 9 AD Cases 657 (7th Cir. 1999); Winslow v. IDS Life Ins. Co., 29 F.Supp.2d (D. Minn. 1998) (refusal of disability insurer to accept application for coverage from a person who insurer perceives to have the potential for a future disability because of treatment within the previous year for a mental condition, violates Title III; denying insurance coverage categorically to people with mental disabilities violates Title III); Conners v. Maine Medical Center (D. Maine 1999) reported in 8 BNA ADAM Newsletter no. 6 (3/25/99) (Title III of ADA applicable to suit by former employee for discrimination between lengths of coverage, depending upon whether physical or mental). Although not a Title III case, see EEOC v. Chase Manhattan Bank, 1998 Westlaw 851605 (S.D. NY 1998) (insurance plan which discriminates against persons with mental illness is permissible as long as benefits for persons suffering from mental illness are not denied altogether).

But even before the run of circuit court opinions determining no Title III protection, including the Sixth Circuit in Parker, the Third Circuit in Schering-Plough, the Seventh Circuit in Doe v. Mutual of Omaha, 179 F.3d 557, 9 AD Cases 657 (7th Cir. 1999) low cap on health insurance benefits for AIDS conditions does not breach ADA), and more recently the Fourth Circuit in Lewis v. K-Mart Corp.,180 F.3d 166, 9 AD Cases 791 (4th Cir. 1999), many district courts were already adopting the Parker line: Brewster v. Cooley Associates/Counseling and Consulting Servs., Ltd., 7 AD Cases 1423, 1997 Westlaw 896421 (D. NM 1997); Weyer v. Twentieth Century Fox Film Corp., 11 NDLR ¶379 (W.D. Wash. 1997); Leonard F. v. Israel Discount Bank of NY, 967 F.Supp. 802 (S.D. NY 1997) (ADA Title III does not require parity for mental health benefits); Fennell v. Aetna Life Ins. Co. 37 F. Supp. 2d40 (D. D.C. 1999)(same). And the Sixth Circuit strongly endorsed its view once again in Lenox v. Healthwise of Kentucky, Ltd., 149 F.3d 453 (6th Cir. 1998) on July 8, 1998 in which the court saw no prohibited Title III discrimination in granting coverage for many types of organ transplants, but not for heart transplants, holding once again, citing Parker, supra, that Title III does not apply to benefit plans, that such benefits are not "goods."




Disclaimer
The U.S. Department of Labor has offered the information in this book. Every effort has been made to make this guide as up-to- date as possible, however, change is inevitable. If you find any information that is not current or correct in this publication, please notify us and we will correct it in the next printing. Furthermore, if there are organizations that are not listed here that you feel would be helpful to others, we welcome your suggestions. Contact us at 1-800-532-5274 or by email at help@patientadvocate.org.