A long-term disability insurance policy limiting benefits for mental but not physical illness violates the Americans with Disabilities Act, a federal judge ruled.
Judge Leonie M. Brinkema of the U.S. District Court in Alexandria, Va., on Thursday ordered Kmart to resume paying Harold Lewis disability benefits until he turns 65 in 2019. That's almost $29,000 this year and will amount to almost $654,000 over time.Disability rights activists hailed the decision as a victory in a long-running battle for parity in insurance policies between physical and mental illnesses.
"It's a real breakthrough for people with mental illness," said Laurie Flynn, executive director of the National Alliance for the Mentally Ill.
The matter is hardly settled. Two U.S. appeals courts have ruled the other way, saying that the ADA does not require parity.
Those cases from higher courts are more significant, said Jeff Gabardi, legislative director and counsel for the Health Insurance Association of America. "The law on this is pretty convincing," he said, arguing that Congress clearly did not intend to outlaw plans like the one Kmart offered its workers.
Under the plan, employees who could no longer work due to physical disability were entitled to a portion of their predisability earnings until they turned 65. The policy restricted payments for mental disability to two years.
Lewis has suffered severe depression since 1979 but could function normally until his depression worsened in 1995.
The judge ruled that to win, Kmart would have had to show that its offer of lesser mental health benefits was based on "sound actuarial principles." The company failed to do that, the judge said.