Title I Technical Assistance Manual

7.9 Health Insurance and Other Employee Benefit Plans

As discussed above, an employer or other covered entity may not limit, segregate or classify an individual with a disability, on the basis of disability, in a manner that adversely affects the individual's employment. This prohibition applies to the provision and administration of health insurance and other benefit plans, such as life insurance and pension plans.

This means that:

• If an employer provides insurance or other benefit plans to its employees, it must provide the same coverage to its employees with disabilities. Employees with disabilities must be given equal access to whatever insurance or benefit plans the employer provides.

• An employer cannot deny insurance to an individual with a disability or subject an individual with a disability to different terms or conditions of insurance, based on disability alone, if the disability does not pose increased insurance risks. Nor may the employer enter into any contract or agreement with an insurance company or other entity that has such effect.

• An employer cannot fire or refuse to hire an individual with a disability because the employer's current health insurance plan does not cover the individual's disability, or because the individual may increase the employer's future health care costs.

• An employer cannot fire or refuse to hire an individual (whether or not that individual has a disability) because the individual has a family member or dependent with a disability that is not covered by the employer's current health insurance plan, or that may increase the employer's future health care costs.

While establishing these protections for employees with disabilities, the ADA permits employers to provide insurance plans that comply with existing Federal and state insurance requirements, even if provisions of these plans have an adverse affect on people with disabilities, provided that the provisions are not used as a subterfuge to evade the purpose of the ADA.

Specifically, the ADA provides that:

• Where an employer provides health insurance through an insurance carrier that is regulated by state law, it may provide coverage in accordance with accepted principles of risk assessment and/or risk classification, as required or permitted by such law, even if this causes limitations in coverage for individuals with disabilities.

• Similarly, self-insured plans which are not subject to state law may provide coverage in a manner that is consistent with basic accepted principles of insurance risk classification, even if this results in limitations in coverage to individuals with disabilities.

In each case, such activity is permitted only if it is not being used as a subterfuge to evade the intent of the ADA. Whether or not an activity is being used as a subterfuge will be determined regardless of the date that the insurance plan or employee benefit plan was adopted.

This means that:

• An employer may continue to offer health insurance plans that contain pre-existing condition exclusions, even if this adversely affects individuals with disabilities, unless these exclusions are being used as a subterfuge to evade the purpose of the ADA.

• An employer may continue to offer health insurance plans that limit coverage for certain procedures, and/or limit particular treatments to a specified number per year, even if these restrictions adversely affect individuals with disabilities, as long as the restrictions are uniformly applied to all insured individuals, regardless of the disability.

For example, an employer can offer a health insurance plan that limits coverage of blood transfusions to five transfusions per year for all employees, even though an employee with hemophilia may require more than five transfusions per year. However, the employer could not deny this employee coverage for another, otherwise covered procedure, because the plan will not pay for the additional blood transfusions that the procedure would require.

An employer may continue to offer health insurance plans that limit reimbursements for certain types of drugs or procedures, even if these restrictions adversely affect individuals with disabilities, as long as the restrictions are uniformly applied without regard to disability.

For example, an employer can offer a health insurance plan that does not cover experimental drugs or procedures, as long as this restriction is applied to all insured individuals.