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Court Rules Insurance Companies Can’t Cap Benefits For AIDS Patients

October 18, 1994

BOSTON (AP) _ Health insurers providing benefits to businesses cannot impose selective spending caps on disabled workers, including those with AIDS, a federal appeals court ruled.

Monday’s ruling set an important precedent for interpreting the 1990 Americans with Disabilities Act, which bars discrimination by employers, said Marc Elovitz of the American Civil Liberties Union.

″The benefits that an employee gets, like your paycheck and, in most cases, health insurance, are covered as part of the employment relationship,″ Elovitz said.

The First U.S. Circuit Court of Appeals ruling overturned a lower federal court decision that said insurers weren’t subject to the anti-discrimination act. The reversal stunned insurance lawyers.

″This case is just so wild, because the broadening of the definition of employer is just such a far-reaching stretch of what the law intended,″ said Marc L. Zaken, a Connecticut lawyer who represents insurance companies and employers.

The ruling covers only the New England region, but could be cited as a precedent in cases elsewhere.

The case started in 1990 when Ronald Senter, owner of Carparts Distribution Center in Plaistow, N.H., sued his health insurance provider, Automotive Wholesalers of New England Health Benefits Plan, of Peterborough, N.H.

Senter claimed that after he contracted AIDS the company capped his benefits for AIDS-related illnesses at $25,000. Treatment for any other disease continued to be capped at $1 million.

Usually, people upset about on-the-job discrimination would sue their employer under the federal act. In Senter’s case he was the employer, so he had to sue his insurance carrier.

The appeals court ruled an insurance company could be considered Senter’s employer under the anti-discrimination act if it ″exercised significant control over an important aspect of his employment.″

Senter’s case was pursued after his death by his mother, Shirley Senter, and his business. The ACLU also filed a brief on his behalf.

The case now returns for trial in New Hampshire to decide whether discrimination occurred.

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