Protecting HIV-positive workers: whose ADA is it anyway?
With court decisions appearing in greater numbers, disabilities rights advocates, employers, and the courts are beginning to assess the legislation's impact. In a TRIAL article published about a year ago, Michele Zavos observed, "[F]or the most part, courts have heeded the message `to provide a clear and comprehensive national mandate for the elimination of discrimination' and have interpreted provisions of the ADA broadly."(2) Several emerging cases are testing further how broadly the courts will interpret the act in addressing job-related discrimination.
To sue for employment discrimination under Title I of the ADA, a plaintiff must be a "qualified person with a disability." The act defines this person as "an individual with a disability who, with or without a reasonable accommodation, can perform the essential functions of the employment position that such individual holds or desires."(3)
Some employers have used this language to their advantage. They have avoided liability by convincing courts to adopt a narrow and restrictive interpretation of these terms, rather than a logically derived meaning consistent with both the congressional intent and the purpose of the act.
Increasingly, employers are attempting to limit liability for discriminatory conduct by arguing that the plaintiffs are not disabled enough to qualify for ADA protection. In Doe P. Kohn, Nast & Graf PC., a young lawyer with asymptomatic HIV challenged his firing from a large Philadelphia law firm. He argued that he was terminated after a partner at the firm found out he was HIV-positive.(4) The employer sought dismissal of the complaint by claiming that the lawyer was not disabled enough to be entitled to ADA protection.
The trial court rejected the employer's argument, focusing on the intent and legislative history of the ADA and concluding that asymptomatic HIV is precisely the type of disability that the act was designed to cover.(5) The case settled halfway through the trial for an undisclosed amount.
The issue received different treatment in Ennis v. National Association of Business and Educational Radio, Inc. There, the trial court questioned whether asymptomatic HIV rendered an employee's son sufficiently disabled to allow the employee to claim discriminatory termination based on her relationship as a caregiver to her son.(6) The ADA prohibits discrimination based on someone's relationship with a person who has a disability. Although Ennis ultimately was resolved on issues that were unrelated to a determination of disability, the case is significant because it demonstrates the courts' increasing inclination to look closely at who is entitled to protection under the ADA.
Disney Corp. flipped the argument in McNemar v. Disney Stores, Inc. McNemar, an assistant manager, allegedly was fired for taking money from the store's cash register to buy cigarettes days after he was asked by his supervisor if he had AIDS. He later filed for Social Security and state disability benefits, to which he was entitled because of the severity of his HIV-related conditions. He then filed a discrimination complaint claiming that his employer fired him because he had AIDS. Disney argued he was too disabled to meet the ADA standard.(7)
The trial court accepted Disney's argument that a fired employee cannot simultaneously apply for disability benefits and claim ADA protection as a "qualified individual with a disability."
On appeal, the Third Circuit Court of Appeals will consider whether an employee fired for discriminatory reasons must choose between applying for disability benefits or pursuing a lawsuit against the former employer.
At first blush, it seems reasonable to conclude that a person cannot simultaneously, apply for - or receive - disability benefits and be able to perform the essential functions of a job. That conclusion, however, fails to recognize that the ADA and the Social Security Act define and apply the term "disability" differently and for different purposes.
Under Social Security regulations, proof of an HIV diagnosis and severe HIV-related medical conditions - as identified by the Social Security Administration - makes an applicant eligible for disability benefits without further inquiry into the individual's ability to work.(8)
However, the individual entitled to disability benefits may be able to work if reasonable accommodations as required by the ADA are provided. For example, a person with AIDS may suffer from wasting syndrome and accompanying chronic weakness requiring frequent nap breaks. This condition makes it impossible to find or keep a job. That same condition, however, does not necessarily preclude employment if accommodations for the person's special needs have been provided. An employer's failure to provide possible accommodation may be a violation of the ADA, but the possibility of such an accommodation is not a factor in awarding disability benefits for two reasons.
First, certain disease manifestations arE so severe that an applicant is automatically considered disabled and there is no inquiry into the ability to work.
Second, in those instances where the applicant's ability to work is subject to inquiry, Social Security only considers the applicant's ability to function in jobs as they exist - not as they might be altered.
The McNemar trial court's reliance on representations in applications for benefits contravenes the ADA's mandate for individual assessments of job performance relevant to a claim. McNemar would force those who are fired because of employer's fear of AIDS to choose between challenging their job loss under the ADA and applying for Social Security disability and related medical benefitS for which they are eligible.
Another recent attempt to narrow the definition of who may claim ADA protection reflects a more extreme argument for a restricted interpretation of the terms "employee" and "employment-related." In Gonzales P. Garner Food Services, Inc., Gonzales was terminated after he submitted medical reimbursement claims for HIV-related treatment.(9)
After the firing, Gonzales chose to continue his employer-provided health insurance under the Consolidated Omnibus Reconciliation Act (COBRA) amendments to the Employee Retirement Income Security Act of 1974 (ERISA).(10) Shortly after this, his former employer amended the company's health insurance plan, imposing a $10,000 annual limit and a $40,000 lifetime maximum for all HIV- and AIDS-related care. This was in sharp contrast to the $1 million lifetime benefits maximum for all other physical illnesses.
By the time Gonzales died, his estate had accumulated about $90,000 in unpaid medical bills that would have been covered under the employer's original benefits plan. Although his firing and election of COBRA benefits occurred before ADA passage in 1992, his COBRA coverage and submission of claims extended beyond that date.
The employer argued that because the ADA mentions only current or potential employees, to include COBRA beneficiaries who have been fired would expand ADA protections far beyond those that were intended by Congress when the law was passed. The trial court agreed.(11) It granted summary judgment, noting that the decedent was neither a job applicant nor an employee.
The appeal in Gonzales may turn on whether - and to what extent - the timing the plaintiff's firing and electing of COBRA benefits prevents recovery under the ADA. But a critical issue for those with disabilities is whether a former employee who participates in an employer-provided health plan has standing under the ADA as a "qualified individual with a disability" to challenge discrimination involving employment-related benefits.
The ADA was designed to protect workers with disabilities by prohibiting discrimination in all "terms, conditions and privileges of employment."(12) "Fringe benefits available by virtue of employment" fall within this category of protection.(13)
An employee who participates in an employer-provided plan that is a "fringe benefit" of his or her employment may challenge discriminatory limitations on that plan. But if that employee participates in the same employer-provided plan through COBRA, Gonzales says the employee loses the ability to challenge unfair coverage limitations. This reflexive conclusion leaves those at risk relegated to a kind of legal limbo, since alternative remedies are elusive at best.(14)
The Gonzales court's adoption of a narrow interpretation of the ADA ignores the underlying principles of the act and its relation to Title VII of the Civil Rights Act of 1964.(15) Both the legislative history and the express provisions of the ADA defer to Title VII for guidance in interpretation.(16)
If the Gonzales court had examined the extensive precedent in Title VII cases, it would have found that other federal courts have used a more commonsense approach and extended protection to former employees.(17) The Equal Employment Opportunity Commission - the federal agency charged with enforcing the ADA - took this position in an amicus brief it filed in this case.(18)
A substantial majority of employer-provided health care plans currently are self-funded plans.(19) Under traditional insurance, the risk of group health plans is shared by the insurance company (whose risks in turn are absorbed to some extent by other customers of the company) and the employer (or union) plan sponsor.(20) Under self funded plans, the participant pool is limited to the employees of the plan sponsor, which bears all the risk,(21) although self-funded plans often are administered by the same companies that provide more traditional forms of coverage. Self-funded plans, which cannot spread the risk beyond their relatively small participant pool, thus have a particularly strong incentive to limit potential medical claims.(22) Under ERISA, these plans also are outside the reach of state insurance laws, which restrict cost-saving measures that exclude or discriminate against certain classes of beneficiaries or illnesses.(23)
Employees of self-insured companies consequently may face the biggest risk of discrimination, since these companies are in the best position to single out employees with disabilities, particularly HIV, that are perceived as especially Costly.(24) The employer can then time restrictions on HIV-specific benefits to the precise point of termination and, under Gonzales, deprive the employee of the ability to complain in court. Because of the number of employers who have moved to self-insurance and the pressures exerted b;, the current economic environment, those who are particularly vulnerable might anticipate repeated discrimination in health insurance benefits.(25)
When COBRA was enacted in 1985, Congress was concerned about the increasing "numbers of Americans without any health insurance coverage and the decreasing willingness of our nation's hospitals to provide care to those who cannot afford to pay."(26) Congress designed COBRA as a safeguard against the loss of health insurance for people with employer-provided insurance who lost their jobs.
The act requires private employers with 20 or more employees who sponsor a group health plan to offer continuing health care coverage to those employees who otherwise would lose their insurance(27) following a qualifying event."(28) Qualifying events include termination of employment (for reasons other than gross misconduct), reduction in work hours to a level below which the employee is covered by the plan, and divorce or emancipation for people who obtain coverage through an employed spouse or parent. Continued coverage through COBRA must be identical to coverage offered in the existing group plan.(29)
COBRA coverage may be continued for a minimum of 18 months and extended for 11 months (for a total of 29 months) if the person is disabled at the time of termination.(30) It is no coincidence that the 29-month extended coverage for a disabled COBRA recipient parallels the waiting period for Medicare eligibility. Under COBRA, workers who are disabled may keep their private health insurance until Medicare coverage kicks in.
Amendments to COBRA enacted in 1990 allow health benefits to continue even if participants elect coverage under a new group plan that exclude coverage for preexisting conditions covered under the old plan.(31) This contingency allows people with disabilities to continue with their old coverage to fill in the gaps created by the new plan.
Without the continuity of coverage provided by COBRA, people with disabilities forced to seek new health insurance might be unable to get immediate coverage because of the preexisting condition clauses in insurance policies. These clauses limit coverage for all expenses relating to a condition the insured had before inception of the policy. Although the terms of these clauses may vary, the end result is the same - a gap in coverage.
If an unemployed person with disabilities finds new coverage and is to accept a preexisting condition clause, the premium for an individual policy may be too expensive. The bottom line is the same - no insurance.
In the decade since COBRA's enactment, the number of people without health insurance has increased. The number of hospitals willing to provide free care has predictably decreased. So the need to protect people's ability to retain private health insurance is even more compelling today.
Private insurance has an indisputable impact on the consistency, accessibility, and quality of health care. For those with disabilities, retaining coverage through COBRA is critical. In its absence, many people who become unable to work be cause of a disability, would be uninsured at a time when their health care needs are arguably at their greatest.
Since a variety of employment benefits, such as disability retirement, do not even become available until employment ends, it makes no sense to shut out former employees who allege discrimination in employment-related benefits. If an insurer is permitted to limit coverage for specific disabilities, and COBRA recipients are not given standing to challenge that practice, former employees with disabilities will find themselves without insurance for necessary, or even life-sustaining, treatment. This is precisely what Congress meant to prevent when it enacted COBRA and the ADA.
Ronda B. Goldfein is director of policy and education at the AIDS Law Project of Pennsylvania in Philadelphia. Catherine Hanssens is the director of the AIDS Project Lambda Legal Defense and Education Fund in New York City.
(1) Pub. L. No. 101-336, 104 Stat. 328 (codified as amended at 42 U.S.C. [sections]12101 (1990)). (2) Michele A. Zavos, Federal ADA Protections for People with HIV, TRIAL, Dec. 1994, at 59. (3) 42 U.S.C. [sections]12111(a). (4) 862 F. Supp. 1310 (E.D. Pa. 1994). (5) Id. at 1321. (6) 53 F. 3d 55 (4th Cir. 1995). (7) No. 94-6997, 1995 U.S. Dist. LEXIS 9454 (E. D. Pa. June 30, 1995), appeal pending, No. 95-1590 (3d Cir.). (8) 20 C.F.R. Pt. 404, Subpt. P, Appendix 1. (9) 855 F. Supp. 371 (N.D. Ga. 1994), appeal pending, No. 95-8533 (11th Cir.). (10) The Consolidated Omnibus Budget Reconciliation Act of 1985 amended the Employee Retirement Income Security Act at 29 U.S.C. [subsections]1161-1169 to require employers to allow former employees to elect to continue coverage under its employee group health insurance plan for up to 18 months. (11) 855 F. Supp. 371, 374. (12) 42 U.S.C. [sections]12112(a). (13) 29 C.F.R. [sections]1630.4(f) (1994). The legislative history relevant to this ADA provision also is instructive. See, e.g., S. REP. NO. 116, 101st Cong., 1st Sess. 28-29 (1989) ("All people with disabilities must have equal access to the health insurance coverage that is provided by the employer to all employees."). (14) The denial or limiting of employee benefits is subject to review under the Employee Retirement Income Security Act (ERISA). The arbitrary or capricious standard applies. As almost all business practices can be found to have some economic basis, and therefore appear neither completely arbitrary nor capricious, ERISA has. provided little hope for employees or former employees who challenge discrimination. Section 510 of ERISA, 29 U.S.C. [sections]1140. See Owen v. Storehouse, Inc. 984 F.2d 394 (11th Cir. 1993); McGann v. H&H Music, 946 F.2d 401 (5th Cir. 1991), cert. denied, 113 S. Ct. 482 (1992). (15) Pub. L. No. 88-352, 78 Stat. 253 (codified as amended at 42 U.S.C. [subsections]2000e-2000e-17 (1964)). (16) Title VII is the guide when defining employment terms, since it was the "[Education and Labor] Committee's intent that Title I of the ADA be interpreted in a manner consistent with Title VII ... as it applies to the employment relationship...." H.R. REP. NO. 101-485(II), 101st Cong., 2d Sess. 76-77 (1990). (17) See, e,g., Bailey v. USA Corp., 850 F.2d 1506 (11th Cir. 1988); Pantchenko v. C.B. Dolge Co., 581 F.2d 1052 (2d Cir. 1978); Rutherford v. American Bank of Commerce, 565 F.2d 1162 (10th Cir. 1977); Atkinson v. Oliver T. Carr Co., 40 FAIR EMPL. PRAC. CASES (BNA) 1041 (D.D.C. 1986). (18) In an amicus curiae brief filed with the court of appeals in Gonzales, the EEOC argued that because Bourgeois, the deceased employee on whose behalf the case was filed, was qualified to receive benefits arising from his employment relationship with Garner, he was a "qualified individual with a disability" who was deprived of health coverage because of his disability - a violation of the ADA. The EEOC reasoned that Bourgeois was "qualified" for the "employment position" that he held as a "post-employment benefits-recipient." Brief Amicus Curiae of the EEOC, at 16-17. (19) Commentators have stated that self-funded plans make up almost two-thirds of employment-based health plans. PAUL A. DIDONATO & ELIZABETH C. JOHNSEN, AIDS LEGAL REFERRAL PANEL DISCRIMINATORY LIMITS ON HIV/AIDS HEALTH CARE BENEFITS, at B-10 (1993). (20) Gwen Thayer Handelman, HEALTH BENEFIT PLANS AND THE AMERICANS WITH DISABILITIES ACT 9 (LRP Publications 1993). (21) Id. (22) Id. (23) Id. at 9-10. (24) Although HIV, like virtually every other life-threatening condition, is costly to treat, overwhelming evidence demonstrates that HIV-related medical costs compare favorably to treatments for other serious illnesses. NATIONAL COMM'N ON AIDS, AMERICA LIVING WITH AIDS 68 (1991); DIDONATO & JOHNSEN, supra note 19. (25) See Henry T. Greely, AIDS and the American Health Care Financing System, 51 U. PITT. L. REV. 73 (1989). (26) See H.R. REP. NO. 241, 99th Cong., 2d Sess., pt. 1, 44 (1985). (27) 29 U.S.C. [sections]1161. (28) Id. [sections]1163. (29) Id. [sections]1162(1). (30) Id. [sections]1162(2)(A)(i), [sections]1162(2)(A)(v). (31) Id. [sections]1162(2)(D)(i).