MENTAL HEALTH: Disability Benefits Must Be Equal
In a ruling with "far-reaching implications," a federal judge ruled last Friday that Kmart Corp. cannot provide reduced long-term disability benefits to a Virginia employee "because he has clinical depression rather than a physical ailment." U.S. District Judge Leonie Brinkema ruled that Kmart's disability insurance policy "violates" the Americans With Disabilities Act because the policy "limits mental health benefits to two years" while continuing payments for physical conditions until age 65. The policy should treat mental and physical health issues the same, the judge ruled, unless the company can "show that mental illnesses cost much more to cover." Kmart is expected to appeal (Masters, Washington Post, 6/12). Brinkema ruled that Kmart must pay store manager Harold Lewis disability benefits and penalties up to $654,000. The amount will depend on whether Lewis remains disabled. An employee of Kmart for more than 10 years, Lewis has not worked for the company since 1995, when he was hospitalized for depression and subsequently began drawing on the disability policy (National Alliance for the Mentally Ill release, 6/15).
Pro And Con Reaction
The Lewis case is "unusual" in that "he got his day in court and won." Many challenges to disability insurance policies have been filed, but this case is the "first lawsuit of its kind to go to trial," according to lawyers on both sides (Washington Post, 6/12). Laurie Flynn, executive director of the National Alliance for the Mentally Ill, hailed the decision as a "milestone," calling it a "turning point toward ending second-class treatment for millions of Americans and their families" (release, 6/15). But the Health Insurance Association of America said it expects the decision to be overturned on appeal. It said the ruling runs "contrary to at least two other decisions by higher courts" and is "at odds" with the congressional intent behind the disability legislation. The HIAA also said that if upheld, employers would face "significantly higher" premiums for long-term disability insurance and major medical insurance coverage (release, 6/15).