Parker v. Metropolitan Life Insurance

MERRITT, Circuit Judge,

dissenting.

I would adhere to the panel’s interpretation with respect to the application to group health and disability insurance policies of Titles III and IV of the Americans with Disabilities Act, 42 U.S.C. §§ 12182, 12201. The panel’s reasoning is fully set out in its published decision, Parker v. Metropolitan Life Ins. Co., 99 F.3d 181 (6th Cir.1996). It reaches the conclusion that the statute covers group health and disability insurance provided by insurance companies through an insured’s employer, as well as insurance provided by walk-in insurance agencies.

Our Court has now held that the provisions of the Disabilities Act simply do not cover employee health and disability insurance plans because “a benefit plan offered by an employer is not a good offered by a place of public accommodation” (Op. p. 1010). Footnotes 4 and 9 of the Court’s opinion notwithstanding, according to the express language of the Court’s opinion, Parker is not covered because she got her coverage from MetLife through the employer instead of walking into a MetLife office and buying it.

[T]he good that plaintiff seeks is not offered by a place of public accommodation. The public cannot enter the office of Met-Life or Schering-Plough and obtain the long-term disability policy that plaintiff obtained. Parker did not access her policy from MetLife’s insurance office. Rather, she obtained her benefits through her employer.

(Op. p. 1011.) Footnotes 4 and 9 are post hoc efforts by the Court to do an about face and march off in a different direction, or at least bury its head in the sand.

Our Court’s decision that the Disabilities Act does not cover employer-sponsored plans flies in the face of § 501(c) of the Act, 42 U.S.C. § 12201(e), entitled “Insurance” (attached as an addendum to this opinion), which immediately follows the Title III coverage provision prohibiting discrimination. It provides a “safe harbor” for insurance companies in certain respects. If Title III does not cover the millions of employees covered by health and disability insurance policies, as our Court has now held, it is difficult to see why Congress would provide a qualified exemption for insurance companies. It is also difficult to see why the House and Senate Committee Reports would treat such insurance as covered by the Act, as the following quotes clearly demonstrate:

Under the [Disabilities Act], a person with a disability cannot be denied insurance or be subject to different terms or conditions of insurance based on disability alone, if *1021the disability does not impose increased risks.
Moreover, while a plan which limits certain kinds of coverage based on classification of risk would be allowed under this section [codified at 42 U.S.C. § 12201(c) ], the plan may not refuse to insure, or refuse to continue to insure, or limit the amount, extent, or kind of coverage available to an individual, or charge a different rate for the same coverage solely because of a physical or mental impairment, except where the refusal, limitation, or rate differential is based on sound actuarial principles or is related to actual or reasonably anticipated experience.
For example, a blind person may not be denied coverage based on blindness independent of actuarial risk classification.

H.R.Rep. No. 485,101st Cong., 2nd Sess., pt. II, at 136-37 (1990), reprinted in 1990 U.S.C.C.A.N. 267, 303, 419-20. The explanation continues:

In sum, section 501(c) [the safe-harbor provision] is intended to afford to insurers and employers the same opportunities they would enjoy in the absence of the legislation to design and administer insurance products and benefit plans in a manner that is consistent with basic principles of insurance risk classification. This legislation assures that decisions concerning the insurance of persons with disabilities which are not based on bona fide risk classification be made in conformity with non-discrimination requirements. Without such clarification, this legislation could arguably find violative of its provisions any action taken by an insurer or employer which treats disabled persons differently under an insurance or benefit plan because they represent an increased hazard of death or illness.

Id. at 137-38, reprinted in 1990 U:S.C.C.A.N. at 420-21. Another House report states:

[Section 12201] specifies that titles I, II, and III shall not be construed to restrict various insurance practices on the part of insurance companies and employers, as long as such practices are not used to evade the purposes of this Act.
Specifically, [Section 12201(c)(1) ] makes it clear that insurers may continue to sell to and underwrite individuals applying for life, health, or other insurance on an individually underwritten basis, or to service such products, so long as the standards used are based on sound actuarial data and not on speculation.
In sum, [the Disabilities Act] requires that underwriting and classification of risks be based on sound actuarial principles or be related to actual or reasonably anticipated experience.

H.R.Rep. No. 485, 101st Cong., 2nd Sess. pt. Ill, at 70 (1990), reprinted in 1990 U.S.C.C.A.N. 445, 493. The Senate report contains an explanation nearly identical to those quoted above. See S.Rep. No. 116, 101st Cong., 1st Sess. 84-86 (1989). In addition, the Senate Report states:

The Committee does not intend that any provisions of this legislation should affect the way the insurance industry does business in accordance with the State laws and regulations under which it is regulated. Virtually all States prohibit unfair discrimination among persons of the same class and equal expectation of life. The [Disabilities Act] adopts this prohibition of discrimination. Under the [Disabilities Act], a person with a disability cannot be denied insurance or be subject to different terms or conditions of insurance based on disability alone, if the disability does not pose increased risks. Id. at 84.

It is strange, indeed, that Congress would put § 501(c) in the Act and write these committee reports if Congress did not include employer-sponsored health and disability insurance in the prohibition against discrimination based on disability. It boggles the mind to think that Congress would include only the few people who walk into an insurance office to buy health insurance but not the millions who get such insurance at work. This distinction drawn by the Court produces an absurd result.

*1022The Court limits § 12182(a) “to physical access to an office,” rejecting the contrary view of the other circuit and district courts that have decided the issue, as well rejecting the Department of Justice and the EEOC view that employer group health insurance is covered. In the end, the unnecessary conflict between these two views will now have to be resolved by the Supreme Court.

The fact that Congress intended that health and disability insurance for employees is covered by Titles III and IV does not necessarily mean that insurance companies lose. It means merely, as noted in the panel decision, that insurance practices, including the insurance industry’s justification for its distinction between mental and physical disabilities, are fully protected to the extent they are in accord with sound actuarial principles, reasonably anticipated experience and bona fide risk classification. The case, as the panel held, should be remanded to the district court for further consideration of the factual and legal issues arising under Title IV from the insurance industry’s asserted distinction between mental and physical disabilities.

ADDENDUM

(c) Insurance

Subchapters I through III of this chapter and title IV of this Act shall not be construed to prohibit or restrict—

(1) an insurer, hospital or medical service company, health maintenance organization, or any agent, or entity that administers benefit plans, or similar organizations from underwriting risks, classifying risks, or administering such risks that are based on or not inconsistent with State law; or
(2) a person or organization covered by the chapter from establishing, sponsoring, observing or administering the terms of a bona fide benefit plan that are based on understanding risks, classifying risks, or administering such risks that are based on or not inconsistent with State law; or
(3) a person or organization covered by this chapter from establishing, sponsoring, observing or administering the terms of a bona fide benefit plan that is not subject to State laws that regulate insurance.

Paragraphs (1), (2), and (3) shall not be used as a subterfuge to evade the purposes of subchapter I and III of this chapter.