EEOC Office of Legal Counsel staff members wrote the following informal discussion letter in response to an inquiry from a member of the public. This letter is intended to provide an informal discussion of the noted issue and does not constitute an official opinion of the Commission.
ADA: Health Insurance and Other Benefits
June 15, 2000
This is in response to your letter, dated April 28, 2000, regarding the Americans with Disabilities Act (ADA). You asked whether a disability retirement plan that excludes from the definition of total and permanent disability injuries or disease which "result from or consist of chronic alcoholism or addiction to narcotics" violates the ADA. You also requested guidance on how the ADA's exclusion of current drug users from the definition of covered individuals may affect the client's interpretation and administration of the plan.
The Equal Employment Opportunity Commission (EEOC) enforces Title I of the ADA, which prohibits discrimination in employment on the basis of disability. This prohibition includes discrimination in the provision and administration of fringe benefits available by virtue of employment, including disability retirement plans. See 42 U.S.C. § 12112(a); 29 C.F.R.
§ 1630.4(f). The ADA, however, does not prohibit insurance companies from continuing to use risk assessment and other traditional insurance practices, or from administering plans based on such practices. 42 U.S.C. 12201(c); 29 C.F.R. § 1630.16(f). These risk assessment practices must be applied uniformly and must not be used as a "subterfuge" to evade the purposes of the ADA. Id.
To date, the Commission has not issued guidance specifically addressing the application of the ADA to disability retirement plans. This precludes us from stating definitively how the Commission would view a plan that excludes injuries or disease which result from or consist of chronic alcoholism or addiction to narcotics.
It may be argued, however, that the principles set out in the Commission's Interim Guidance on the Application of the ADA to Disability-Based Distinctions in Employer Provided Health Insurance (6/8/93) (hereinafter Health Insurance Guidance) (enclosed), should also apply to disability retirement plans. In the Health Insurance Guidance, the Commission explained that
the use of "disability-based distinctions" in employer-provided health insurance violates the ADA unless the employer can show that such distinctions are justified by the risks or costs associated with the disability, or are necessary to ensure the continued viability of the plan.
Not all health-related plan distinctions discriminate on the basis of disability. A health-related plan distinction is disability-based if it singles out a particular disability (e.g., deafness, AIDS, schizophrenia), a discrete group of disabilities (e.g., cancers, muscular dystrophies), or disability in general (e.g., non-coverage of all conditions that substantially limit a major life activity). Health Insurance Guidance at 7. On the other hand, broad distinctions, which apply to the treatment of a multitude of dissimilar conditions and which constrain individuals both with and without disabilities, are not distinctions based on disability and do not violate the ADA as long as they are applied equally to all insured employees. Id. at 5.
The ADA's definition of "disability" treats alcoholism and drug addiction differently. Under the ADA, alcoholism may be a "disability" even if a person continues to drink.
See 42 U.S.C. §§ 12102(2) and 12114(c); 29 C.F.R. §§ 1630.2(g)-(j) and 1630.16(b). Thus, it could be argued that a provision in a disability retirement plan limiting or excluding coverage for "chronic alcoholism" or injury or disease which result from alcoholism is a disability-based distinction under the ADA. If it is, then an employer would have to show that the distinction is justified by the risks or costs associated with the disability, or is necessary to ensure the continued viability of the plan. See Health Insurance Guidance at 10-13.
On the other hand, the ADA excludes from coverage individuals who are currently engaging in the illegal use of drugs. See 42 U.S.C. § 12114; 29 C.F.R. § 1630.3. The ADA's definition of "disability" covers persons who are addicted to drugs only if they are not currently engaging in the illegal use of drugs and have completed or are participating in a drug rehabilitation program. Id. Therefore, a provision in a disability retirement plan limiting or excluding coverage for "addiction to narcotics" or injury or disease which results from it might not be considered a disability-based distinction. This is because the provision arguably will
affect people without disabilities (current illegal drug users), as well as some people who have disabilities. If such a provision could be shown to be disability-based, then an employer would have to show that the distinction is justified by the risks or costs associated with the disability, or is necessary to ensure the continued viability of the plan.
Even if such a provision is disability-based, an individual who is currently engaging in the illegal use of drugs probably will not be able to challenge it. This is because a person currently engaging in the illegal use of drugs is not a qualified individual with a disability under the ADA (when the employer acts on the basis of the illegal use). On the other hand, an employee with drug addiction who is not currently illegally using drugs or an employee with another disability resulting from drug addiction could challenge the provision.
We hope this information is helpful to you. Please note, however, that this letter is an informal discussion of the issues raised by you and is not an official opinion of the Equal Employment Opportunity Commission. In addition, our failure to address other matters that may have been presented should not be construed as agreement with the statements or analysis related to those matters.
Christopher J. Kuczynski
Assistant Legal Counsel
ADA Policy Division
This page was last modified on April 27, 2007.
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