Benefit Plans Under ADA

The American With Disability Act generally exempts employee benefit plans from the requirements of the ADA. There are, however, limits on this exemption. The ADA does not affect the manner in which the insurance industry does business in accordance with state laws. Section 501(c) of the Act specifies that its provisions shall not be ''construed to prohibit or restrict'' the following entities or organizations from ''underwriting risks, classifying risks, or administering such risks that are based on or not inconsistent with State law:'' - Insurers; - Hospitals or medical service companies; - Health maintenance organizations; or - Any agent or entity that administers benefit plans.3 In addition, employers and other entities covered by the Disabilities Act may establish, sponsor, observe, and administer the terms of a ''bona fide benefit plan'' that utilizes underwriting or classifying risks ''based on or not inconsistent with State law.'' Finally, an employer or other organization covered by the ADA is not prohibited or restricted by the Act from ''establishing, sponsoring, observing or administering the terms of a bona fide benefit plan that is not subject to state laws that regulate insurance.''