Copyright 1993 The New York Times Company  
The New York Times
December 22, 1993, Wednesday, Late Edition - Final
SECTION: Section A; Page 19; Column 1; National Desk

LENGTH: 667 words

HEADLINE: Estate Wins $100,000 Settlement From Health Insurer for AIDS Bias

BYLINE: By MILT FREUDENHEIM,  Special to The New York Times

BODY:
Settling charges that it had discriminated against members with AIDS, a union welfare fund in Minnesota agreed yesterday to pay $100,000 to the estate of a construction worker who died last year.

The payment to the estate of Mark Kadinger, a 36-year-old construction worker who died in November 1992, was the first large award in a case involving an AIDS-related denial of health insurance under the Americans With Disabilities Act, which took effect last year.

Before the law took effect, a number of decisions by Federal appeals courts had given health plans wide leeway to refuse payment for AIDS and other expensive illnesses under the Employee Retirement Income Security Act, the Federal pension law.

The Supreme Court refused to hear an appeal last year of a ruling that upheld the right of a Houston music store to limit payments for an employee with AIDS.
 
$50,000 Ceiling Is Lifted

In the agreement yesterday, the health plan of Local 110 of the International Brotherhood of Electrical Workers in St. Paul and the electrical contractors' association also agreed to lift a $50,000 ceiling on payments for AIDS-related diseases. The health plan provided insurance up to $500,000 for other catastrophic conditions.

The settlement was announced by the Federal Equal Employment Opportunity Commission, which joined a lawsuit against the welfare fund brought by Mr. Kadinger's family and the University of Minnesota Hospital, which had treated him.

Under the consent agreement, which will be filed in Federal court in St. Paul, the health plan will report any further disability related changes in coverage to the Equal Employment Opportunity Commission for three years. The union and the National Electrical Contractors Association will also report any amendments in their collective bargaining contract to the commission.

The health plan also agreed to provide educational seminars for trustees of the plan regarding its obligations under the disabilities act, said Laurie A. Vasichek, a commission lawyer in Minneapolis.

The defendants will also donate $2,500 to the Minnesota AIDS project, an advocacy group, in Mr. Kadinger's memory.

Keith Halleland, a lawyer for Mr. Kadinger's estate, said the bulk of the money would go to pay medical bills. "We got exactly what we wanted," he said.
 
Ruling in New York

In a New York ruling last month, Judge John E. Sprizzo of Federal District Court dismissed a motion in which a group of construction companies and laborers' unions contended that their welfare fund was exempt from the disabilities act, citing the Federal pension law.

The Mason Tenders District Council Welfare Fund has been seeking to block a lawsuit against it after it cut off medical benefits for Terrence P. Donaghey, a Queens construction worker with AIDS-related illnesses, and three other workers with AIDS.

Damien Mysak, a lawyer for the fund said yesterday that it would ask Judge Sprizzo to authorize an appeal from his ruling on Jan. 7.

In another case filed under the disabilities law, the Allied Services Division Welfare Fund agreed in September to settle a case with the Los Angeles office of the equal employment commission on behalf of two men with AIDS whose coverage had been reduced to $5,000 from $300,000. The fund, an insurer for 20 California companies, agreed to pay $10,000 in damages to the men and restore full coverage.

In a related case in Baltimore, the commission sued a teamsters union welfare fund last month on behalf of Harry Johnson Jr., a former employee of a food distributor, who said the fund had denied him health benefits because he had AIDS. Luther West, a lawyer for the fund said it was permitted, under the Federal pension law "to pick and choose what benefits we provide and what illnesses we cover."

A Federal district judge ruled against the plaintiffs on similar grounds in a New Hampshire case. They are seeking a review of the decision by the Appeals Court for the First Circuit in Boston.