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Appeals Court Rules Health Insurance Covered by Disabilities Act

October 18, 1994

BOSTON, Mass. (AP) _ Companies providing health insurance plans for businesses may not discriminate against workers with disabilities, including AIDS, a federal appeals court has ruled.

The U.S. First Circuit Court of Appeals overturned a lower court ruling that said health insurance companies were not subject to the 1990 Americans with Disabilities Act, which prohibits employers from discriminating against workers with disabilities.

Monday’s ruling sets an important precedent for interpreting the federal act, said Marc Elovitz, staff attorney for the American Civil Liberties Union’s National AIDS Project, which filed a brief on behalf of the plaintiff.

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

The ruling stems from a 1990 case in which the owner of a car parts store sued his company’s health insurance company for allegedly lowering the cap on benefits for AIDS-related illnesses after it learned the owner was HIV- positive.

The car parts store alleged that after store owner Ronald Senter contracted AIDS, the insurance company capped AIDS-related benefits at $25,000 instead of the standard $1 million cap for other illnesses.

The U.S. District Court for New Hampshire dismissed the case in 1993 - after Senter’s death - ruling that the insurance plan was not subject to the Americans with Disabilities Act because it wasn’t an employer.

The appeals court, however, ruled Monday that the insurance company could be considered Senter’s employer under the act if it ″exercised significant control over an important aspect of his employment″ and acted as an agent of the store in providing health insurance.

The case, being pursued by the store and Senter’s mother, Shirley Senter, now returns for trial to the district court in New Hampshire.

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