Welcome to Foresight and Insight

The Hartford�s Group Benefits Division is pleased to provide updates on newsworthy legislative and regulatory actions related to group disability and life insurance. Periodically, we�ll also offer more in-depth reports on workplace, workforce and benefit trends.

In the October / November 2008 edition:

2008 ADA Amendments Act passage likely to challenge Supreme Court decisions

Passage of Americans with Disabilities Amendments Act changes the U.S. Supreme Court's narrow interpretation and is expected to overturn four decisions.

Summary

On September 25th, President George W. Bush signed into law S.3406, the ADA Amendments Act of 2008. This new law clarifies and broadens the definition of disability, and expands the population eligible for protections under the Americans with Disabilities Act (ADA) of 1990. The law will take effect on 1/1/09.

This bill redefines the original ADA's reference to "major life activities" and "being regarded as having such an impairment," which had previously been narrowly interpreted by the U.S. Supreme Court.

Court Rulings to be Overturned

Among the Supreme Court decisions the bill would overturn are:

• Sutton v. United Air Lines [527 U.S. 184, 9 AD Cases 673, 1999]
• Murphy v. United Parcel Service Inc. [527 U.S. 516, 9 AD Cases 691, 1999]
• Albertson's Inc. v. Kirkingburg [527 U.S. 555, 9 AD Cases 694, 1999]

In these cases, the court held that "mitigating measures" that help individuals control or cope with impairments must be considered in determining whether an individual is disabled within the meaning of the ADA.

Speaking in support of the bill on September 17, Majority Leader Steny Hoyer (D-Md.) said the result of those decisions has been to exclude from the ADA many people, such as those with insulin-controlled diabetes, whom Congress intended to cover. "We never expected that people who work to mitigate their disabilities would have those efforts held against them," he said. "We remedy that today."

The bill also overturns the Supreme Court's decision in Toyota Motor Mfg. Co. of Ky. v. Williams [534 U.S. 184, 12 AD Cases 993, 2002], in which the court ruled that a tough standard should apply in determining whether a person with impairments is "substantially limited" in major life activities and therefore disabled under the act. S. 3406 retains the "substantially limited" language but specifically directs the Equal Employment Opportunity Commission to abandon a regulation that Congress deems too restrictive and to promulgate a new rule that allows broader coverage under the ADA.

Learning Disabilities Covered

House Representative George Miller (D-Ca.), chairman of the House Education and Labor Committee said the legislation rejects Price v. National Board of Medical Examiners [966 F. Supp 419, 6 AD Cases 1659 (S.D. W.Va. 1997)] and endorses the U.S. Court of Appeals for the Second Circuit's approach in Bartlett v. New York State Board of Law Examiners [156 F.3d. 321, 8 AD Cases 1004 (1998)] which effectively re-established coverage under the ADA for "neurological difficulties" such as dyslexia and other learning disabilities.

Congress Passes Mental Health Parity Bill

When President Bush signed the financial services bailout bill on October 3, long-awaited mental health parity legislation became law. This legislation requires health care plans to provide the same coverage for mental health and substance abuse disorders at they do for other medical illnesses. For most calendar-year plans, the law will take effect on January 1, 2010.

Key provisions summary¹

• Parity required - Expands the 1996 law on annual and lifetime limits to financial requirements (co-payments, deductibles, coinsurance, out-of-pocket expenses) and treatment limitations (frequency, number of visits, days of coverage) for mental health and substance abuse coverage.
• Preemption - Maintains the Health Insurance Portability and Accountability Act (HIPAA) standard, thereby creating a federal floor for parity standards and allowing states to enact more extensive requirements for insured plans.
• Out-of-network coverage - Requires that an employer offer out-of-network mental health and substance abuse coverage if the plan offers out-of-network medical coverage.
• Medical management - Protects plan medical management practices that are vital to assuring the cost and quality of services for covered benefits.

Potential Impact

Modest cost increase. Most group health plans do not currently meet these new requirements. While plan changes would be extensive, the cost impact for health insurance is expected to be modest. Last year, the Congressional Budget Office estimated that enactment of a similar bill would boost health insurance premiums by an average of about 0.2 percent a year.²

Positive outcomes. Employers may experience several positive outcomes with improved coverage of mental health treatment. Ronald Kessler of Harvard Medical School along with other researchers have found that mental disorders can substantially limit an employee's ability to work, thus increasing absenteeism and reducing workplace productivity.³

Incentive for early treatment. Researchers frequently cite starting treatment early as an important way to control the severity of a mental health episode and keep the employee at work and fully productive.⁴

Reduced treatment costs. Lower copayments have been seen as an effective way to get employees into treatment sooner. Mental health lobbying groups believe that mental health parity will provide this financial incentive.

To receive the greatest impact from the new mental health parity requirement, the challenge remains for employers to greatly destigmatize the treatment of mental health. Kessler estimated that almost 30 percent of the U.S. population experiences some diagnosable mental health or addictive disorder within a 12 month period⁵, but fail to seek treatment or drop out because they want to solve the problem on their own.⁶

1. Source: Society for Human Resource Management, October 2008.
2. Jerry Geisel, Business Insurance for www.workforce.com, October 2008
3. R. C. Kessler and R. Frank, 1997. "The Impact of Psychiatric Disorders on Work Loss Days." Psychological Medicine 27: 861-73.
4. R. J. Goldberg and S. Steury, 2001. "Depression in the Workplace: Costs and Barriers to Treatment." Psychiatric Services 52: 1639-43.
5. R. C. Kessler et al, 1994. "Lifetime and 12-Month Prevalence of DSM-III-R Psychiatric Disorders in the United States." Archives of General Psychiatry 51 (1): 8-19.
6. R. C. Kessler et al, 2001. "The Prevalence and Correlates of Untreated Serious Mental Illness." Health Services Research 36 (6): 987-1007.

Social Security expands program, incentives for disabled to find jobs

The federal "Ticket to Work" program has expanded eligibility to help more disabled people find work.

Summary

Social Security's Ticket To Work (officially called the Ticket to Work and Self-Sufficiency Program) is a federally sponsored program for individuals with disabilities who have the desire and ability to re-join the workforce. It was also intended to reduce the participants' dependence on Social Security benefits.

The new Social Security Administration Ticket to Work regulations are designed to help people who are receiving Social Security disability benefits find employment, vocational rehabilitation and other support services from public and private providers, employers and other organizations. While a revamped Ticket to Work training program has initially targeted 16 states¹, the program's enhancements are available in all 50 states.

The new program is designed to:

• Expand the eligible population to include beneficiaries who are expected to medically improve.
• Increase financial incentives for participating service providers to boost participation.
• Enable beneficiaries to take advantage of the services of both state vocational rehabilitation agencies and employer networks.

The Program's History

Originally established under the Ticket to Work and Work Incentives Improvement Program Act of 1999, it was first rolled out in 2002, though with not much success. A 2007 report to Congress by Mathematica Policy Research², concluded that while the numbers of individuals using employment services increased slightly, it did not produce a corresponding increase in beneficiary earnings or a reduction in benefit payments. They suggested that further shifts in beneficiary behavior would be needed to produce the desired decrease in benefits.

For more information visit:

• Social Security's Ticket To Work Program: Frequently Asked Questions
  (http://www.disabilitybenefits101.org/ca/programs/work_benefits/ttw/faqs.htm)
• Ticket to Work
  (http://www.yourtickettowork.com)
• About Ticket to Work
  (http://www.ssa.gov/work/aboutticket.html)
• News Release: Social Security Announces Improvements to the Ticket to Work Program The Social Security Administration issued final rules designed to improve
  (http://www.ssa.gov/pressoffice/pr/tickettowork-pr-alt-0508.htm.pdf)

1. California, Colorado, Florida, Georgia, Illinois, Massachusetts, Michigan, Missouri, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Texas, Virginia, and Washington. The SSA chose these states for an "educational push" so they could evaluate and analyze the program to see if further modifications need to be made.

2. Ticket to Work: Helping People with Disabilities Find and Keep Jobs

Federal Court emphasizes employee's FMLA obligations

A federal appeals court ruling in favor of the employer is based on an employee's obligations under the FMLA.

The Decision

In Ridings v. Riverside Medical Center, the Seventh Circuit Court of Appeals (which has jurisdiction over Illinois, Indiana and Wisconsin) ruled that:

• for intermittent or reduced schedule leave under the FMLA, the employee must present 1) the dates that planned medical treatment is expected, 2) the duration of treatment, and 3) the doctor's statement of the medical necessity for the type of leave requested and the expected duration of the leave.
• an employer is entitled to ask a full-time employee to work a full-time schedule on the premises. The employer (Riverside) gave the employee (Ridings) the choice of working a full schedule on the premises or completing her FMLA paperwork. She did neither.

The court found that Ridings' termination was justified for absenteeism or insubordination under Riverside's policies.

Case Facts

Ridings was an employee of Riverside Medical Center from October 1998 until May 13, 2004 as a database operator. In December 2002, Ridings was diagnosed with Graves' disease, and in January 2003, she was granted two weeks of FMLA leave following surgery to remove her thyroid. She was also granted an extension of an additional week of leave.

She returned to work in February 2003, leaving early because she alleged that her medications made her tired in the afternoon. She made no formal arrangements with Riverside to leave early nor did she request intermittent leave. She continued to work less than full days the remainder of 2003.

In January 2004, Riverside told Ridings several times that she needed to work full days on the premises or submit medical documentation to request FMLA leave. Ridings ignored these requests and maintained that since she brought work home with her, she was working full-time.

In March 2004, Ridings finally provided a doctor's note which stated that she "could not work an eight-hour day because of a medical condition until further notice." Riverside provided her with a Certificate of Health Care Provider form (CHCP) and advised that she needed to return it within 15 days.

After Ridings failed to provide the completed CHCP, despite several requests and written warnings, Ridings was suspended for three days without pay. She was advised that if she did not return the CHCP upon returning to work after the suspension, further action, up to and including termination, may be taken. Ridings returned to work without the completed CHCP and Riverside terminated her employment.

Ridings sued Riverside for interference with her rights and retaliation in violation in the FMLA. The district court granted summary judgment for Riverside and Ridings appealed. The appellate court affirmed summary judgment for Riverside on both the interference and retaliation claims.

Paid Sick Leave could shift to the federal level

The Coalition for Healthy Families announced it will request that a referendum on "paid sick leave" - the Ohio Healthy Families Act - be removed from the November state ballot in Ohio.

While this is seen as a win for HR professionals who opposed the bill, it does not necessarily mean the issue is dead. Rather, it will shift to a larger battleground on the federal level.

Employer groups in Ohio introduced a bill this past summer known as the Ohio Healthy Families Act which would mandate paid sick leave for most employees working in Ohio. If approved, it could make Ohio the only state to require paid sick leave. The required number of signatures had been obtained to ensure a spot on the November ballot.

On September 4, the Coalition for Healthy Families announced it was requesting that the referendum be removed from the November ballot. It appeared the Coalition did not want a bitter debate over paid leave in Ohio to adversely impact changes of a possible paid leave proposal at the federal level in 2009.

Court case -- a caution to employers who suspect FMLA abuse

A recent court case addresses the need for employers to exercise caution when acting upon allegations of suspected FMLA abuse.

Case Facts

The case, filed in the Ohio Southern District Court, arose following James Weimer's termination of e mployment by Honda for dishonesty and FMLA abuse. Weimer was injured on the job on February 21, 2006. Doctors under contract with Honda ordered Weimer to remain off work through March 15. Weimer requested FMLA leave which Honda approved.

While Weimer was on leave, Honda received a tip that he was not as injured as he claimed. Honda acted on this tip and hired a surveillance company who took video of Weimer doing yard work and building a porch on his home. When Weimer returned to work on March 15, Honda questioned him and he admitted to the activities shown on the video. Honda then fired him for dishonesty and FMLA abuse.

Weimer filed suit alleging that Honda fired him in retaliation for taking FMLA leave. Both parties filed a motion for summary judgment. Honda argued that it fired Weimer for lying and for abusing his leave supported by the activities seen on the video. Weimer countered that he told the doctors that he didn't feel injured enough to stay out for the entire recommended leave. He argued that he was capable of returning to work earlier but couldn't based on the recommendations of Honda's doctors.

The court refused to grant summary judgment to Honda and ordered the case to trial to determine whether Weimer was (1) merely obeying doctor's orders or (2) an "opportunistic schemer taking advantage of the system in order to have time to enhance the curb appeal of his home." One of the reasons the court provided for its denial of Honda's motion for summary judgment was a legitimate dispute as to whether Weimer's injuries prevented him from performing his job duties even though they may not have kept him from performing the task seen in the video.

Lesson for employers

The lesson for employers from this case is to not jump to conclusions just because they believe they have a "smoking gun" to support their suspicions of FMLA abuse. Before making any decisions, an employer must gather all the facts, including giving the employee a chance to tell his or her side of the story.

Also, just because an employee is able to do something other than sitting on the couch during a leave doesn't automatically mean that the leave is being abused. If the employer is told that the employee was seen at the mall, at the gym, or even building a porch, the employer shouldn't automatically assume that those activities are grounds for discipline unless the employer is certain that the activity depicted clearly violates doctor's orders.