The Wall Street Journal on July 14 examines the increased number of companies that have begun to fire employees with disabilities to reduce health care costs. According to the Journal, employees with disabilities have become "an increasingly common casualty of the drive to cut costs" as health insurance expenses and the number of disabled employees increase and as many companies face bankruptcies and takeovers. For example, Polaroid last July fired 180 disabled employees and terminated their health insurance as the company prepared to sell assets to Bank One. A survey conducted last year by Mercer Human Resource Consulting found that 27% of the 723 companies interviewed immediately terminate employees on long-term disability, and 24% terminate the employees at a set time after they are on long-term disability, often between six and 12 months; 15% of the companies retained employees on long-term disability and provided them with health insurance until they reached age 65. Although terminated employees can retain their employer-sponsored health insurance for 18 months through COBRA and disabled employees can purchase Medicare coverage after 18 months, few employees can afford the cost of the coverage. In addition, few employees on long-term disability qualify for Medicaid because they continue to receive part of their salaries. Last week, attorney Harvey Schwartz filed a discrimination lawsuit in federal court in Boston on behalf of Elizabeth Williams, a former Polaroid employee with lupus who was terminated last July. Schwartz maintains that Polaroid and Bank One "got together and consciously planned to discriminate" against employees on long-term disability. A spokesperson for Polaroid did not comment on the lawsuit.

Future Trend
The Journal reports that the lawsuit does not mark "the first time disabled workers have gone to court on the issue," as a three-judge panel of the U.S. Circuit Court of Appeals in San Francisco has ruled in favor of Denise Lessard, an Applied Risk Management employee on long-term disability who was terminated when MMI, a medical consulting and insurance company, acquired ARM. The court found that her termination violated the Employee Retirement Income Security Act, which guarantees employees the right to use their benefits. However, the "disability-payment squeeze is likely to continue for companies and their employees," the Journal reports. The Department of Labor estimates that 5.5 million individuals were on long-term disability last year, a 62% increase from 1992. The "reasons for the big rise aren't completely understood, but the most cited explanation is an aging work force," the Journal reports (Pereira, Wall Street Journal, 7/14).