Let's say you started working for a job that had an excellent benefit package. And one of the key benefits was that you received health insurance up to age 65, if you retired with 25 years of service or if you had to retire earlier because you are disabled. But then let's say that the employer decided, after you had been working a few years, that it would change that policy and limit health insurance benefits for those disabled to twenty-four months rather than up to age 65.  Can it do that given the Americans with Disabilities Act bars discrimination? That sure sounds like discrimination against those disabled. The Supreme Court recently said “yes” the employer can legally do that without running afoul of the ADA.

In 1999, Karyn Stanley went to work for the City of Sanford, Florida, as a firefighter. That occupation has some risks with it due to the conditions for training as well as firefighting.  Some conditions can preclude you from working as a firefighter even if they develop because you are a firefighter. In other words, you have no choice but to be retired as disabled even though you may be able to work in another job. For example, firefighters cannot work with high blood pressure unless it is controlled with certain types of medication.  If you have a disabling condition, you better have skill sets to work in another occupation for that employer and seek that out. You will be retired as a firefighter.

Ms. Stanley liked the benefit package she had and, in particular, the fact that health insurance was provided for 25-year retirees all the way up to age 65 when they became eligible for Medicare. Also, if disability arose, health insurance was provided up to age 65 for those disabled. That disability feature was a real consideration because that could easily arise for a firefighter working under very hot conditions with heavy protective equipment.

About four years later, the city changed its policy and while it still offered 25-year retirees health insurance until age 65, it reduced the health insurance benefit for those disabled to twenty-four months. While not expressly stated, no doubt the thinking here was that if the employee was totally disabled, they would receive Social Security disability and then be eligible for Medicare. If they were not disabled under the Social Security Act, then they should get another job that offers health insurance benefits. Thus, the city sought to reduce its expenses obviously and push the expense to the disabled retiree.

Ms. Stanley continued working and about fifteen years after the policy changed, she found that she was disabled from being a firefighter and was forced into retirement. She was only going to receive twenty-four months of health insurance and this greatly distressed her.  As a result, she filed a lawsuit against the City for discrimination under the ADA as well as under several other claims.

The City filed a motion to dismiss. The court denied the motion as to claims under a Florida statute, and the equal protection clause of the Constitution, but granted the motion as to the claim under the Americans with Disabilities Act. Stanley v. City of Sanford, No. 6:20-cv-629-WWB-GJK, 2021 U.S. Dist. LEXIS 249778 (M.D. Fla. Mar. 1, 2021).   (The other claims were later denied in a motion for summary judgment ruling -Stanley v. City of Sanford, No. 6:20-cv-629-WWB-GJK, 2021 U.S. Dist. LEXIS 249782 (M.D. Fla. Dec. 7, 2021)). Ms. Stanley appealed the matter to the Eleventh Circuit, and it affirmed the district court. Stanley v. City of Sanford, 83 F.4th 1333 (11th Cir. 2023). From there, a petition for writ of certiorari was presented to the United States Supreme Court, and it granted the petition due to a split among the Circuit Courts. (The 2d and 3d circuits disagreed with the 11^th, 6^th, 7^th and 9^th Circuits.)

So how could this occur given the ADA precludes discrimination based on disability? First, the ADA requires proof of discrimination when a disabled individual is able to perform a job or could perform a job with a reasonable accommodation. However, that individual must be a “qualified individual”, which means the individual is seeking after the job or actually holds the job and is being demoted or terminated. Thus, a retiree, including a disabled retiree, is no longer “qualified” as she is  not seeking the job, nor does she hold the job. Accordingly, the ADA does not apply.  Ms. Stanley, according to the Supreme Court, would have had to demonstrate the discrimination in 2003 when the policy change occurred. She was not disabled at that time.

Part of this ruling relied on Congress' use of the present tense when referring to a “qualified individual”.  Thus, the individual must be qualified at the time of the alleged discriminatory act. Only Justice Jackson outright dissented. All other justices joined in various parts of the opinion to form the affirming opinion of the lower courts.

In the end, what remains clear is that the ADA doesn't protect welfare-type (e.g. health, disability or life insurance) benefits for retired and disabled employees who may be dependent on them. (Neither does ERISA for that matter.) It also remains clear that employers may take away such benefits as a cost-saving mechanism notwithstanding assurances made when the employee entered into employment. Generally, protection may be extended under ERISA if promises are made in plan documents that the benefit is vested and will never be taken away.   That will be rare.