March 14, 2006

Good Jobs, Good Benefits (But Not for Disabled Workers)

by Harlan Hahn

EDITOR'S NOTE: Last October, a leaked Wal-Mart management memo made headlines. To hold down insurance costs, said the memo, the company should "discourage unhealthy job applicants." News of the memo created a furor. But many companies look for ways to keep "costly" employees out of the labor pool. Here's a report on the practice at the university level.

Phrases like "moral hazard" and "risk management" are seldom heard in everyday conversations about jobs. But they are part of a little-known language that is now being used to impose the latest forms of employment discrimination upon disabled adults, including highly qualified professionals. As employers increasingly try to hold down the costs of health insurance and retirement benefits, they are re-examining these concepts in the search for new methods of reducing expenses by removing disabled personnel from the labor force.

Perhaps the first thing to be learned about this language is that its terms are presented from the employer's, or the insurer's, point of view. From their standpoint, the most desirable health insurance plans, for example, are those that result in the fewest claims for reimbursement. The term "moral hazard," which is sometimes used in conjunction with the notion of "adverse selection," was developed centuries ago to designate a departure from a rational profit-maximizing calculus made on another basis such as a desire to include all members of the work force within a single insurance pool. To avoid the depletion of capital, if management feels compelled to offer any fringe benefits at all, they might prefer to sell policies only to employees who seldom need to use them. Hence, the concept of "moral hazard" is sometimes applied to disabled workers or others who could be expected to file numerous claims in comparison with a total pool of otherwise young and healthy policyholders. Since most private health insurance is available almost exclusively from employers, there is a strong incentive to reduce the share of disabled personnel to the lowest number possible.        

The principal means by which businesses and insurers try to restrict the proportion of disabled employees in the labor pool is by placing ubiquitous questions about "pre-existing [health] conditions" on application forms. Obviously, workers with a permanent impairment may find it difficult to hide or disguise a chronic health problem indefinitely. While Sec. 5.5 (f) of Title I of the Americans with Disabilities Act prohibits disability discrimination in "fringe benefits available by virtue of employment," both the absence of any landmark appellate court decision applying this protection to a specific case and the general drift of the Supreme Court in a right-wing direction may indicate that legal defenses in this matter are beginning to evaporate.

Occasionally, especially when insurance companies introduce a new plan, they may waive the "pre-existing conditions" barrier. Thus disabled individuals can sometimes slip past the screening intended to exclude them from the work force and the insurance pool. But they frequently can expect to encounter other obstacles to attempting to keep a good job.

An increasingly common device for removing disabled workers from employment and insurance rolls has developed under the rubric of "risk management." This concept has been broadly adopted to describe practices intended to accomplish what the name implies, that is, to reduce the risk that an employer or insurer may incur some loss or expense due to increased job hazards, including the possibility that an employee could threaten or engage in unacceptable behavior or misconduct. Since many employers frequently bear an unacknowledged and unspoken aversion or distaste about the presence of visibly disabled people in their midst, the principle of "risk management" may be invoked to support action to terminate a disabled workers who could be identified as a trouble-maker or someone who might reduce the profits of an institution that had--perhaps unwittingly--hired them during a time when the ban on "pre-existing conditions" was temporarily lifted.

Like many other disabled persons, words such as "moral hazard' and 'risk management" were little more than abstract notions to me until I began to see their impact on my own life. When I was young, I had foolishly believed that I had found an answer both to my own joblessness and to the persistently high unemployment rates among most disabled persons (which I later learned is more than two-thirds in the U. S.). It then seemed to be in front of me in the American dream: get a good education, a secure job, work hard, and save money to afford the increased cost of attendants I would inevitably need in order to perform all the tasks that might not be able to accomplish by myself when I got older.

I thought (I realize now in retrospect) that I had done it all: I earned four advanced degrees (including a Ph.D. from Harvard), I found a stable job as a college professor with tenure (which meant that I ordinarily could not be fired without a damn good reason), I pursued a frugal lifestyle, and I managed to get by without an attendant until my late fifties.

But I failed to realize that, with increased seniority, my salary also grew to the point were the university wanted to fire me in order to spend the same amount of money on two or more junior professors whom they believed would bring them more benefit than one old senior professor who stubbornly continues to study disability law and policy (which they claim is not "sexy" enough to attract more students).

Now my employers is engaged in legal maneuvers (supposedly based on one class session when I had to raise my voice to quiet some disruptive students) to destroy my tenure and to get rid of me. I will continue to fight their unethical practices, but I think secretly that the outcome will be determined by which side has more money to hire lawyers, and that is a battle that I know the university will ultimately win. Meanwhile, I am still receiving my salary, but I have been prohibited from teaching again "until further notice."

Words and theories have consequences. Employers and insurance companies still are able to enjoy a distinct advantage over employees because of concepts such as moral hazard, pre-existing conditions, and risk management that were developed years--and even centuries--ago by judges who were more sympathetic to the prerogatives of employers than to the rights of lowly workers. My hope is that, by understanding the ways these concepts have been manipulated to reinforce employment discrimination, other disabled persons will be able to escape the fate that appears to be awaiting me.

Harlan Hahn has had more than 40 years of teaching experience in higher education, including about 30 years at the university which is the subject of this article.

Posted on March 14, 2006