Read on for more information and the impact on employers offering retiree benefits.
Case Background
The plaintiff in the matter worked as a firefighter for the City of Sanford, Florida (City), starting in 1999. When the plaintiff was hired, the City offered health insurance until age 65 for two categories of retirees: those with 25 years of service and those who retired earlier due to disability.
In 2003, the City revised its retirement health insurance policy to provide health insurance up to age 65 only for retirees with 25 years of service, while those who retired earlier due to disability would receive 24 months of coverage. Subsequently, the plaintiff was diagnosed with Parkinson’s disease and retired in 2018, which entitled her to only 24 months of health insurance coverage under the revised policy.
The plaintiff brought suit against the City, alleging that the City violated the Americans with Disabilities Act (ADA) by providing different health insurance benefits to those who retire with 25 years of service and those who retire due to disability. The district court dismissed her ADA claim, reasoning that the alleged discrimination occurred after she retired, when she was not a “qualified individual” under Title I of the ADA, since she no longer held or sought a job with the defendant. The Eleventh Circuit affirmed the district court’s decision.
The Americans with
Disabilities Act (ADA) Background
The ADA is a federal law that applies to all public employers and any private employer with 15 or more employees for each working day in at least 20 calendar weeks in the current or preceding calendar year. The ADA prohibits employers from discriminating against qualified individuals with disabilities and also requires employers to provide reasonable workplace accommodations to such qualified individuals.
Title I of the ADA prohibits covered employers from discriminating against a qualified individual on the basis of disability in regard to compensation and other matters. The ADA defines a “qualified individual” as an “individual who, with or without reasonable accommodation, can perform the essential functions of the employment position that such individual holds or desires[1].
Circuit Court Split
The federal appellate circuit courts have been split (to some degree) with respect to whether a retired employee (meaning an individual who does not currently hold or desire to hold a job at the time of alleged discrimination) is a “qualified individual” covered under the ADA’s antidiscrimination provisions.
Specifically, the Eleventh, Sixth, Seventh, and Ninth Circuits have held that the ADA’s antidiscrimination provisions do not reach individuals who do not hold or desire to hold a job and, as such, are not “qualified individuals” who may sue under Title I of the ADA. In contrast, the Second and Third Circuits have held that the ADA’s definition of “qualified individual” is ambiguous, and these courts have extended this definition to reach retirees like the plaintiff here.[2]
Supreme Court Ruling
In an 8-1 ruling, the Court held that to prevail under the ADA’s antidiscrimination protections, “a plaintiff must plead and prove that they held or desired a job, and could perform its essential functions with or without reasonable accommodation, at the time of an employer’s alleged act of disability-based discrimination.”[3] Since the plaintiff here was retired and not currently employed or even seeking employment, the Court held she was not a “qualified individual” under Title I of the ADA.
Notably, the majority opinion delved into the textual “present-tense” verbs (“holds,” “desires,” “can perform”) within the ADA’s definition of “qualified individual” to affirm that the ADA’s antidiscrimination provisions protect current and prospective employees, rather than retirees (who do not hold or seek employment).
The ruling here settles the circuit court split (outlined above) regarding the definition of “qualified individual” in the context of the ADA’s antidiscrimination provisions.
Impact on Employers Offering
Retiree Benefits
This decision narrows the scope of antidiscrimination liability under Title I of the ADA with respect to post-employment benefits (including retiree health insurance coverage).
Nonetheless, employers are advised to remain mindful as other employment-related laws, including the Rehabilitation Act of 1973 and relevant state laws[4], may still apply when differentiating benefits between disabled and non-disabled retirees.
As a general reminder, employers contemplating changes to their post-employment benefit policies for retired employees are strongly encouraged to confer with their benefits counsel before finalizing any changes.
On a final note, it’s worth mentioning that this decision may potentially spur Congress to amend the ADA by extending Title I to “reach retirees” with disabilities, as noted by Justice Gorsuch in the majority opinion.
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[1] 42 USC 12111(8).
[2] Stanley v City of Sanford, Florida, 606 U. S. ____ (2025) at 3.
[3] Id at 18.
[4] Id at 12.
The contents of this article are for general informational purposes only and eBen makes no representation or warranty of any kind, express or implied, regarding the accuracy or completeness of any information contained herein. Any recommendations contained herein are intended to provide insight based on currently available information for consideration and should be vetted against applicable legal and business needs before application to a specific client.
