Modderno v. King

82 F.3d 1059 (D.C. Cir. 1996); No. 94-5400 (D.C. Cir. Apr. 23, 1996). ; Clearinghouse Number: 51174

Description

Insurance Policy’s Lifetime Limit on Coverage for Mental Health Care Does Not Violate Section 504

Abstract

The D.C. Circuit has upheld the district court’s dismissal of plaintiff’s challenge to her health plan’s lifetime maximum health benefit for mental health services. Due to her mental illness, plaintiff was hospitalized from 1988 to 1991, during which, as the former spouse of a foreign service officer, she was covered by the foreign service benefit plan. In 1990, her health plan imposed restrictions on benefits for mental health care, including a $75,000 lifetime maximum. Plaintiff claimed that this limit violated section 504 of the Rehabilitation Act, 29 U.S.C. § 794, which prohibits discrimination based on disability in any U.S executive agency program. Finding that plaintiff failed to state a claim upon which relief could be granted, the district court dismissed her complaint. Affirming, the court of appeals held that the plan’s differential treatment of mental and physical illness did not constitute discrimination within the meaning of section 504. Although the Act mentions physical and mental impairments, it does so only to make the remedies comprehensive. The Act does not assure any kind of equality between sufferers of mental, as opposed to physical, disability. Citing Alexander v. Choate, 469 U.S. 287 (1985), the court held that even if the coverage limits in the plan were "facial discrimination" based on disability, that would neither invalidate the plan nor condition its validity on actuarial justification. If section 504 permits across-the-board limits on coverage, as Alexander holds, then it may not forbid partial limits that leave some disabled individuals better off than others. The court also rejected plaintiff’s argument that the Act’s 1992 amendments, which incorporated into section 504 the standards of several sections of the Americans with Disabilities Act (ADA), saved her case. Whatever title I of the ADA might add to or subtract from plaintiff’s claim, section 501(c) of the ADA created a qualified safe harbor for insurance plans. Because the coverage limitations challenged by plaintiff were enacted before the 1992 amendment of section 504, and because they were not enacted in the expectation of an amendment, the court held that they did not fall within the subterfuge exception to the ADA’s safe harbor and therefore did not violate section 504.

Additional Information

Docket Date
1970-01-01 06:00:00+00:00

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