Disability insurers discriminate against women

WHILE MASSACHUSETTS HAS ENACTED the strongest laws in the country to ensure equitable pay for women, the reality is that there is still significant work to be done to ensure that women in the Commonwealth have the same advantages and stand on equal financial ground with their male counterparts. It is high time that we eradicate gender-discrimination in the insurance industry by passing the Equitable Disability Act (H. 482) sponsored by Rep. Ruth Balser and Sen. Jason Lewis.

Discrimination in disability insurance is against federal law when provided through an employer, but when women have to buy the very same insurance directly from the insurance company they have to pay an outrageous 23 to 60 percent more than their male counterparts, even when they are the same age, have the same health risks, and work in the same occupational field.

Insurance provided by an employer must be gender neutral, stemming from the Supreme Court’s Title VII Civil Rights Decision of 1983, which held that it is against the law to discriminate by race or gender. Individual policies, however, do not need to comply with this federal ruling and are instead regulated by states. But Massachusetts law is not consistent in addressing the issue of gender neutrality.  For instance, car insurance is gender neutral but disability insurance is not. Young men under the age of 25 have more car accidents and make more claims than their female counterparts, but the cost for car insurance is equal for men and women because, in this instance, there is gender neutrality.

There are explanations for why women may cost more to insure; the companies, for example, often say women live longer and have longer claim periods. But when it comes to selling group disability insurance, the insurance companies are able to accommodate an equal price for men and women despite these differences in claims. If this is the case, how can charging women more for individual disability insurance be anything but blatant discrimination and have a significant impact on women and their families?

In Massachusetts, 11 percent of all individual disability insurance policies, or about 189,000 individuals, are subjected to gender-biased insurance policies.  This places women at a severe disadvantage in protecting themselves and their families from the financial challenges that arise when illness or injury impact their ability to work and support their families. When women are required to pay significantly more for their disability insurance, most women decide they can’t afford to buy disability insurance.  While some women can choose to pay more for expensive disability insurance, for many women the cost is prohibitive and they are forced to opt out and take their chances risking the impact that illness and injury could have on their ability to provide for their families.  This is made crystal clear when you consider the real lives of women.

Emma S., for example, had a full-time job in management but her employer did not provide disability insurance. In order to protect her young son and herself, she would have needed to purchase disability insurance independently. Emma decided the coverage was too costly, given her need to make ends meet for her and her young son, whom she supports by herself.

Emma was in a car accident a little over a year ago and since then has not been able to go back to work. She has had difficulty with her memory, has constant headaches, and is unable to be in environments with too much stimuli.  This has made it nearly impossible for her to do the simple daily tasks of her life, such as care for her young son and do household chores.  After her accident, during her immediate recovery, disability insurance would have kicked in and provided a necessary safety net, but instead Emma first lost her job and then, shortly after, she lost her home. Because she couldn’t afford disability insurance, she had no protection when the worst happened. Now she and her son have slid into an unnecessary financial crisis as she tries to heal and get back on her feet.

We all know that it is hard enough to recover from injuries and illnesses, but the unfair burden we place on women by not providing them with similar disability insurance protections to their male counterparts is intolerable. Massachusetts has been the clear leader in ensuring equitable pay for women. We must continue this commitment by eradicating the obvious gender discrimination in the insurance industry.  Since insurance companies are not pursuing a correction to this gender disparity on their own, we must eradicate this discrimination against women through legislative means.  Fortunately, this is an easy thing to do. The Equitable Disability Act is currently in third reading, and I urge Speaker Robert DeLeo to bring it forward for a vote immediately.

Liz Friedman is the vice chair of the legislative committee of the Massachusetts Commission on the Status of Women and previously led the Massachusetts Pregnant Workers Fairness Act Coalition. A resident of Northampton, she is the cofounder of GPS Group Peer Support, which bring mental health care system to disenfranchised communities nationally and in Latin America.