Imagine yourself as the assistant vice-president of a New York bank or maybe an employee of a New Jersey-based pharmaceutical company. After many years on the job, you become severely depressed—so ill that you are no longer able to perform your duties. You take sick leave. Unfortunately, your depression is tenacious and resists effective treatment. Weeks drag on into months, and the sick leave you had saved for years is almost gone. Unable to work, with no foreseeable prospect of recovery, your depression is compounded by the worry of how you will support yourself and your family.

Fortunately, like many companies, your employer has provided a long-term disability policy as part of the benefits of your employment. After a suitable waiting period, the policy will pay a substantial portion of your salary as a replacement for lost income. Indeed, in most circumstances, these payments will continue until you reach the age of 65, at which point you should be eligible for Social Security and other retirement benefits. But for you there is a catch. Because your disability is caused by a mental illness rather than a physical affliction, the benefits will run out in two years. If you fail to recover by that point, you're out of luck.

This situation, now common in many companies, is exactly what faced two plaintiffs in recent lawsuits (1,2). Both worked for corporations that sought to hold down the expense of employee benefits by treating mental disabilities less generously than physical ones. And both challenged this disparity by arguing that it violated the terms of the Americans With Disabilities Act (ADA), a statute passed by Congress in 1990 to eliminate discrimination against disabled persons in many aspects of life. One plaintiff was successful, and the other failed—a graphic illustration of the unsettled state of the law on this issue and of the prospects for a great deal more litigation before the matter is clarified.

The most promising provision of the ADA for a challenge to unequal disability benefits would appear to be Title 1, which addresses discrimination in employment. It provides, in part, that "No covered entity shall discriminate against a qualified individual with a disability… in regard to… employee compensation, job training, and other terms, conditions, and privileges of employment" (3). Regulations to implement this provision developed by the federal Equal Employment Opportunity Commission (EEOC), the agency charged with administering and enforcing Title 1, make clear that fringe benefits, including insurance, are covered by this section (4). Thus it is not surprising that both plaintiffs relied, at least in part, on Title 1 to support their claims of discrimination, alleging that they were treated differently from their colleagues solely because they suffered from a mental disorder.

However, plaintiffs claiming discrimination under Title 1 have a significant hurdle to overcome. Title 1 protects a "qualified individual with disabilities," defined as "an individual with a disability, who, with or without reasonable accommodation, can perform the essential functions of the employment position that such individual holds or desires" (5). The language was formulated with hiring and firing decisions in mind: employers may not discriminate against persons who are otherwise qualified for the position, or who would become qualified if reasonable accommodations were made for their disabilities. Both plaintiffs in these cases, however, by virtue of the very conditions that made disability coverage an issue for them, were incapable of performing "the essential functions of the employment position." Thus the defendant employers argued that their disabled employees lacked standing to bring a case alleging discrimination under Title 1 of the ADA.

There is a catch-22 quality to this argument, noted by the EEOC itself, which entered both cases as amicus curiae in support of the plaintiffs. Before an employee develops a disability that would qualify him or her for benefits, the employee is not being treated differently from his or her colleagues and thus has no basis for a claim of discrimination. Once disabled, however, as the EEOC pointed out in its brief in support of the bank vice-president—known in court papers only as Leonard F.— "to be eligible for the benefit, he must have been found unable to perform the job…. But if he is currently unable to perform the job, he is, according to the Bank, not a 'qualified individual with a disability' and thus may be discriminated against on the basis of his disability" (6). An evidently frustrated EEOC concluded, "Congress clearly did not intend to leave this large loophole in the ADA and, by so doing, leave employers virtually free to discriminate in disability benefit plans."

The EEOC suggested several ways that the courts might get around this apparent obstacle. "Qualified individual," for example, might be construed to mean "qualified to receive fringe benefits," the only qualification a disabled employee can logically be required to meet (7). Alternatively, the EEOC asked the court to look to the period after Leonard F.'s depression developed but before he became unable to work. During this period, he was a person with a disability under the ADA and was facing unequal insurance coverage. Or the entire situation might be viewed as flowing from the prior employment relationship, and "his qualifications for the job he held… should be measured as of the time he was actually working and qualifying for inclusion in the disability plan."

Ultimately, the issue of whether Leonard F. had standing to bring his suit was never decided by the courts. The federal district court judge hearing the case ruled that he would defer a decision until the record was more fully developed and allowed the case to proceed to trial (8). Just days before the trial was scheduled to begin, after two and a half years of motions and hearings, the defendant, Israel Discount Bank, agreed to settle the case. Although the terms of the settlement were not fully disclosed, "The company agreed to adopt a long-term disability insurance policy that provides equal benefits to employees whether they have psychiatric or physical disabilities" (9).

The second case, however, had a less happy ending. Ouida Sue Parker, who worked for the pharmaceutical company Schering-Plough, was unable to persuade the courts that she had standing to bring suit against her employer under Title 1. A three-judge panel of the federal Sixth Circuit Court of Appeals congratulated her and the EEOC on their "creative thinking" (they used the same arguments that were made on behalf of Leonard F.). However, the panel concluded that their efforts to overcome the barrier of being a qualified individual relied on "a convoluted construction of the statutory language, which conflicts with the plain meaning of the words" (2). The panel was willing, however, to let the case proceed against the insurance company that offered the policy, Metropolitan Life, under a different provision of the ADA, Title 3.

In contrast to Title 1's focus on employment issues, Title 3 deals with discrimination in public accommodations. "No individual shall be discriminated against on the basis of disability in the full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations of any place of public accommodation" (10). Listed specifically under those entities considered to be public accommodations is "insurance office." The Sixth Circuit panel concluded that insurance policies are a product, their provision is a service, and they are dispensed in places of public accommodation. Ipso facto, Ms. Parker could proceed with a claim for discrimination under Title 3 of the ADA (2).

Unfortunately for the plaintiff, the full Sixth Circuit, sitting en banc, vacated that decision and reheard the case. In a vote of 8 to 5, the judges held that Ms. Parker never utilized the services of an insurance office to obtain her long-term disability policy, which had been provided by her employer. Because she never made use of a public accommodation, Title 3 of the ADA was not available to her as a cause of action. To make matters worse, the court concluded that even if a cause of action under ADA had been found, the suit would still have been unavailing, because the statute prohibits only discrimination between disabled and nondisabled people.

At issue here, the judges suggested, is discrimination among classes of disabled people (those with physical and those with mental disabilities), something that the statute does not preclude. Even if they had let the case go to trial, Ms. Parker would still have had to demonstrate that Metropolitan Life lacked a legitimate actuarial basis for discriminating between medically and mentally disabled people. In any event, for her the issue is moot: a few months after this decision, the U.S. Supreme Court declined to hear Ouida Sue Parker's appeal of her case.

How can we make sense of these complex arguments about the applicability of the ADA to discriminatory disability coverage? Although the ADA, as characterized by the EEOC in one of its briefs (7), is "the most far reaching statute designed to combat discrimination against individuals with disabilities in our society," its drafters undoubtedly had certain paradigmatic examples of discrimination in mind. In the employment context, they almost certainly focused on hiring and firing decisions. The statute's language largely reflects these concerns, even if, when asked directly, its authors might have assented vigorously to the proposition—reflected in some of the act's wording—that the statute also covers disability benefits. Advocates, including the EEOC, are therefore left with the sense that the statute was meant to afford remedies to disabled persons such as Leonard F. and Ouida Sue Parker, but they find it difficult to make convincing arguments based on statutory language alone.

Does this situation imply that it is hopeless to use the ADA to challenge discriminatory disability coverage? By no means. The Parker case was the first in which a court of appeals ruled on the issue. With other cases percolating through the system (11), a more sympathetic venue may appear. Ultimately, if disagreement arises among the federal circuits, the U.S. Supreme Court is likely to step in to make a definitive resolution. At that level, it may be easier to argue policy and get away from a word-by-word parsing of the ADA's text. The context of the ADA as a whole suggests strongly that Congress intended its reach to be broad; denying disabled employees standing to pursue their claims of discrimination hardly comports with that objective.

Moreover, the prospect of litigation like Leonard F.'s may compel more companies to follow the belated lead of Israel Discount Bank and provide nondiscriminatory disability coverage. Indeed, at the time the settlement was reached, the bank made clear that it was motivated by the desire to avoid the costs of a trial—and, one suspects, the adverse publicity (9). The New York State Psychiatric Association was instrumental in initiating Leonard F.'s suit and, along with the American Psychiatric Association, helped support the costs of the case. If the case helps change the corporate climate with regard to disability coverage, it will have been money well spent.

First-Person Accounts Invited for Column

Patients, former patients, family members, and mental health professionals are invited to submit first-person accounts of experiences with mental illness and treatment for the Personal Accounts column of Psychiatric Services. Maximum length is 1,600 words. The column appears every other month.

Material to be considered for publication should be sent to the column editor, Jeffrey L. Geller, M.D., M.P.H., at the Department of Psychiatry, University of Massachusetts Medical School, 55 Lake Avenue North, Worcester, Massachusetts 01655. Authors may publish under a pseudonym if they wish.

Dr. Appelbaum, who is editor of this column, is A. F. Zeleznik professor and chair of the department of psychiatry at the University of Massachusetts Medical School, 55 Lake Avenue North, Worcester, Massachusetts 01655.