Retiree Could Not Bring Discrimination Claim Over Retiree Health Insurance Be

CATEGORY: Client Update for Public Agencies
CLIENT TYPE: Public Employers
DATE: May 03, 2024

Karyn Stanley was a firefighter for the City of Sanford, Florida who took a disability retirement in November 2018.  The City continued to provide Stanley with health insurance during her retirement.  Under a policy that was in effect when the City first hired Stanley, disability retirees received free health insurance from the City until the age of 65.  In 2003, the City changed its policy to only provide a health insurance subsidy to disability retirees for 24 months after retirement.

Stanley thought she would receive free health insurance until the age of 65 but due to the change in policy, she became responsible for paying her own health insurance premiums 24 months after her retirement in December 2020.  She filed a lawsuit against in the City in April 2020 seeking free health insurance until the age of 65.

In the lawsuit, Stanley claimed the City discriminated against her based on her status as a disability retiree.  She alleged violations of Title I of the Americans with Disabilities Act (ADA) and the Rehabilitation Act.  She also alleged the change in health benefits unconstitutionally discriminated against her in violation of the Equal Protection Clause of the Fourteenth Amendment.

The district court granted the City’s motion to dismiss the lawsuit.  The district court found that Stanley could not allege disability discrimination because the alleged adverse action was that the City stopped paying her health insurance premiums, which occurred while Stanley was no longer employed by the City.  Stanley appealed the district court’s decision.

Upon appeal, the Eleventh Circuit Court of Appeals focused on definitions from the ADA.  The ADA makes it unlawful for an employer to discrimination against a “qualified individual with a disability” because of the disability.  The ADA defines “qualified individual with a disability” as someone “who, with or without reasonable accommodation, can perform the essential functions of the employment position that such individual holds or desires.”  Since Stanley was a former employee, she did not hold or desire to hold an employment position.  The Eleventh Circuit reasoned that she could not sue over discriminatory post-employment benefits.

The Eleventh Circuit also found that the City’s benefit plan did not violate Equal Protection Clause.  The Eleventh Circuit determined that the change to the City’s disability retirement health benefit advanced a legitimate government purpose of conserving funds.

Stanley v. City of Sanford (2023) 83 F.4th 1333.

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