Under the Social Security Disability Insurance (SSDI) program, employees who are "unable to do [their] previous work and cannot.... engage in any other kind of substantial gainful work" are entitled to benefits. Under the Americans With Disabilities Act (ADA) disabled employees who, with reasonable accommodation, can perform the essential functions of their jobs cannot be terminated from employment because of their disabilities. These two laws collide when an employee who has been granted SSDI benefits because he/she is totally disabled, nevertheless, asserts that, with accommodation, he/she is able to do the essential functions of a job. The issue is complicated by the fact that in the application for SSDI benefits the employee certifies that he/she is "unable to work."
The apparent conflict between the various mechanisms for providing benefits to totally disabled workers (e.g., social security, workers compensation, disability insurance) and the ADA has been resolved differently by courts throughout the country. Some have dismissed ADA lawsuits entirely, some treated the certifications or statements by applicants of total inability to work as binding and, yet, others have created rebutable presumptions. In a decision delivered at the end of May of this year, the United States Supreme Court resolved these contradictions by holding that an employee who was receiving SSDI benefits ("totally disabled") could, nevertheless, sue the employer for violating her ADA rights when it refused to accommodate the employee’s disability and continue her employment. The Court stated that the issue presented by the application for SSDI was different from that presented to an employer under the ADA, since the Social Security Administration makes determinations based upon the condition of the employee without regard to any accommodation while an employer is required under the ADA to make a determination only after reasonable accommodation of the disability has been considered. Left undecided was the question of whether the benefits received by an employee under a disability insurance program would offset any damages to which the employee may be entitled as a result of the discharge of employment in violation of the ADA.
This case has far reaching implications for employers, since many insurance carriers make disability benefit determinations under their policies dependent on the SSDI decision of the Social Security Administration. Where employers have long-term disability insurance covering employees, the policies and practices of the insurance carrier should be examined to ensure that an employee who has a disability which can be accommodated will not also be entitled to proceeds under the insurance policy. This is particularly important where the premiums paid by the employer may be adversely affected due to its experience rating. Similar considerations should lead employers to discuss the issue with their workers compensation insurance carrier. Of particular concern are the cases where an employee may receive a lump sum settlement from the workers compensation carrier due to a "total disability" and the employee then applies for his or her job back on the basis that the disability can be accommodated under the ADA. The employer, in that situation, may have its workers compensation rates substantially increased due to the lump sum settlement while having the additional expense of accommodating the employee so he/she can continue on the payroll.
This case, as well as difficulties which many employers are now experiencing with respect to their employee practices insurance, are reminders to employers that they should have all of their insurance policies reviewed routinely to make sure that the coverages and conditions achieve legitimate employer objectives and are responsive to changes in the law. Cleveland v. Policy Management Systems Corp., U.S. Supreme Court #97-1008 (1999).
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