Supreme Court Limits ADA Retirement Benefits Protections for Workers

The U.S. Supreme Court has ruled that ADA retirement benefits do not extend to retirees challenging post-employment changes – a decision that limits legal exposure for employers and signals a key compliance shift HR should factor into benefits planning.

The ADA’s protections extend only to people who are currently qualified for a job that they seek to hold – and retirees simply do not fit that bill, the Court said.

This new ruling limits the scope of the ADA and essentially gives employers one fewer thing to worry about when it comes to ADA compliance.

Policy Change on ADA Retirement Benefits

Karyn Stanley became a firefighter for the city of Sanford, Florida, in 1999.

When Stanley was hired, the city provided health insurance through age 65 to those who retired with 25 years of service, as well as those who retired due to a disability.

The city changed that policy in 2003, when it announced that it would provide health insurance for just 24 months to those who retired due to a disability.

Unfortunately for Stanley, she did not reach her goal of being a city firefighter for 25 years. Instead, she was forced to retire in 2018 after being diagnosed as having Parkinson’s disease. As a result, the 24-month limitation period applied to her. At the time she stopped working, she was 47 years old.

Stanley sued the city, claiming it violated ADA retirement benefits protections by offering less favorable health coverage to employees who retired due to disability than to those with 25 years of service.

ADA Retirement Benefits Case Reaches High Court

Lower courts rejected her ADA retirement benefits claim, and the Supreme Court took the case to resolve a split over whether the ADA’s employment protections apply to retirees.

Leaning hard on the text of the ADA, the Court decided that the lower courts got it right when they ruled against Stanley on her claims under the statute.

The ADA’s employment provisions ban discrimination only against “qualified individuals,” the Court said, which includes only those who are currently able to perform a job that they hold or desire.

The statute’s use of the present tense concerning who the law protects is a strong indication that the law’s employment provisions do not protect retirees, the Court said.

The law’s description of examples that constitute unlawful discrimination, such as discriminatory qualification standards or selection criteria, also supports the conclusion that retirees are not covered, it added.

Earlier Supreme Court Decision Supports Ruling

To further support its conclusion that retirees like Stanley cannot sue under the ADA, the Court noted that it has ruled in a previous case that an individual cannot sue under the statute if they admit that they are unable to work.

Stanley argued that ADA retirement benefits should extend to all individuals with disabilities, including retirees. She insisted – and a dissenting justice agreed – that every individual is a “qualified individual” under the ADA. They said the ADA’s goal of ending disability-based discrimination would best be served by a ruling that extended the law’s protections to retirees. But the controlling decision in the case rejected those arguments.

The Court affirmed the ruling against Stanley.

Retirees and ADA Discrimination: The Door Is Still Open

The Court left the door open for some ADA retirement benefits claims. It said an ADA claim may be available to one “who happen[s] to be retired at the time they sue, if they can plead and prove they were both disabled and ‘qualified’ when their employer adopted a discriminatory retirement-benefits policy.”

In this case, Stanley’s complaint indicated that she was not disabled when the city adopted the challenged policy.

As another potential example of a possibly viable ADA suit by a retiree, the Court gave the case of an individual who can show they were affected by a policy change while they were qualified but did not file suit until after they retired.

Finally, the Court noted that unlawful bias happens at the time that an individual becomes subject to a discriminatory decision or practice. But that general rule did not help Stanley because her complaint never said what her disability was or when it emerged, the Court said.

Key Takeaways for Employers

Employers should consider these key points to align their retirement benefits strategies with the latest ADA retirement benefits ruling:

• The problem for the plaintiff in this suit was the type of plaintiff, not the type of claim that was filed. ADA retirement benefits claims remain plausible after this ruling, as explained above.
• The ruling does not bar retirement-benefits claims based on the application of other laws, such as ERISA and applicable state laws.
• Despite the clear preservation of some types of ADA retirement benefits claims, the decision narrows the class of individuals who can sue under the ADA for claims related to retirement benefits.
• Be sure to conduct periodic reviews of benefits policies, including those relating to applicable retirement benefits.

Stanley v. City of Sanford, Florida, No. 23-997 (U.S. 6/20/25).