Research on Employment Supports for People with Disabilities: Summary of the Focus Group Findings. C. Evolution of Disability Policy

09/01/2001

Until recently, disability policy for all adults in the U.S. has focused on conducting eligibility determinations, and providing cash and in-kind benefits to those unable to participate in the labor force. There has been, however, a gradual shift toward the prevention and management of disabilities, with a focus on increased independence. Policy makers are currently trying to develop and implement policies that encourage individuals with disabilities to work and to live independently. For working-age adults, this shift has been reflected in policies that emphasize the right to work (e.g., Americans with Disabilities Act), and address work disincentives and access to employment supports (e.g., Ticket to Work and Work Incentives Improvement Act). In this section, we trace the major policy initiatives over the last five decades that have accompanied this shift in emphasis. The discussion is intended to provide a context for the focus group findings and policy issues described in this report.

During the late 1950s through the early 1970s, public disability policy offered little incentive for people with disabilities to seek or engage in competitive employment. Disability policy emphasized payment of cash benefits for those unable to work, and people with disabilities were neither expected nor encouraged to enter the workforce. Modifications in the Social Security Act during the 1960s and the early 1970s liberalized eligibility requirements, increasing the number of individuals eligible for benefits. Effectively, this increased the benefit rolls and the value of benefits, and discouraged individuals from entering or returning to employment.

In 1972, beneficiaries receiving disability payments became eligible for the first time for Medicare coverage, which was extended to persons who had been receiving SSDI benefits for at least 24 months. In addition to increasing the value of disability benefits, this policy increased the risk to beneficiaries of leaving the rolls and returning to work because Medicare coverage was tied to disability benefit receipt. The federal SSI program was enacted in 1972 and implemented in 1974, to replace the growing federal/state matching programs. With a few exceptions, individuals receiving SSI were eligible to receive Medicaid, authorized under Title XIX of the Social Security Act and established in 1965 to provide adequate medical care to low-income individuals and individuals with disabilities.4

The mid-1970s through 1980 represented a shift in the focus of disability policy. After the growth of the disability rolls in the late 1960s and early 1970s, there was growing concern about the rapid rise in the number of people receiving SSDI and SSI benefits, and increasing recognition of the right, and responsibility, of people with disabilities to work. The passage of the Rehabilitation Act of 1973 marked the beginning of a change in the focus of disability policy. The Act required each agency or department of the executive branch of government to submit an affirmative action plan for the hiring, replacement, and advancement of people with disabilities, and to update the plan annually. The Act also barred recipients of federal funds from employment discrimination against people with disabilities. The Act reauthorized and expanded the vocational rehabilitation (VR) program to include all persons with disabilities, and to provide for research and training to improve vocational prospects for such individuals.

During the 1980s, Congress passed legislation that provided specific public and workplace accommodations for persons with disabilities. A number of pieces of legislation emphasized the civil rights of people with disabilities, and served as precursors to the watershed Americans with Disabilities Act (ADA) of 1990. For example, the Fair Housing Act Amendments Act (1988) extended protection of the 1968 Fair Housing Act to people with disabilities. In 1980 and 1981, Congress passed a series of amendments to increase access to work for people with disabilities. For example, impairment-related work expenses could now be deducted from earnings for purposes of determining whether the SSDI or SSI applicant or beneficiary was engaging in substantial gainful activity (SGA), a key measure in determining benefit eligibility, and the SSI Section 1619 work incentive program, which allowed SSI recipients with earnings to retain some of their income benefit, plus Medicaid eligibility, at income levels that would have previously made them ineligible for SSI. In 1986, amendments to the Rehabilitation Act created a new service category and funding stream for supported employment, which expanded service capacity to those unable to benefit from traditional vocational services. Thus, increasing numbers of individuals with disabilities gained access to employment-related services.

Since 1990, a series of significant legislative initiatives have solidified the right and the expectation to work. The most expansive of these initiatives, the ADA, became law on July 26, 1990. This omnibus civil rights statute contains five titles that cover employment and public services. The ADA prohibits employment discrimination against people with disabilities, and requires employers to provide reasonable accommodations for workers with impairments. The Act also requires public transportation to be accessible to people with disabilities, and requires that places of public accommodation (both publicly- and privately-owed) be accessible to and usable by people with disabilities. The Family and Medical Leave Act of 1993 also extended additional rights to people with disabilities, entitling qualified employees to take up to 12 weeks of unpaid leave during a 12-month period if the employee is unable to work due to a serious health condition.

Two major pieces of legislation passed during this period emphasize work preparation among school children with disabilities. The Individuals with Disabilities Education Act of 1994 (IDEA), legislation addressing in-school supports for youth with disabilities, requires states to provide free and appropriate public education for students with disabilities at the elementary and secondary level. The Act provides school districts funding for special education and requires states to identify, locate, and evaluate all children with disabilities in the state in need of special education and related services. Children receiving benefits under IDEA receive an Individual Education Program, which provides individually-tailored support services during secondary school, and includes transition planning services (no later than age 16, earlier if deemed appropriate) designed to develop vocational and life skills leading to adult success for students. Students are to be educated in the least restrictive environment possible, and to be provided appropriate accommodations.

The School to Work Opportunities Act of 1994 authorized development grants to states to create systems that prepare all students for the transition from school to work. These training systems are designed to teach young Americans marketable skills, to prepare them for their first job in a high-skill, high-wage career, and to increase their opportunities for further education, such as at a four-year college or university. The law also requires each local program that receives a grant to establish a work-based learning component, including work experience, workplace mentoring, and broad instruction in "all aspects of an industry." Moreover, the law also requires that all school-to-work programs funded under the Act be open to all youth, with particular emphasis on ensuring opportunities for disadvantaged youth and school dropouts (Brown, 2000). The legislation expires this year, but programs will continue to operate under sunset provisions and the federal funding for school-to-work activities will continue under the Workforce Investment Act (WIA) of 1998.

Welfare reform, passed in 1996 in the form of the Personal Responsibility Work Opportunity Reconciliation Act (PRWORA), also had an impact on disability policy. PRWORA replaced the Aid to Families with Dependent Children (AFDC) program with Temporary Assistance for Needy Families (TANF), a state block grant program to provide cash benefits to needy families with children. Although TANF was not designed primarily to serve people with disabilities, we discuss the program here because a large percentage of those receiving benefits from TANF (and AFDC) have disabilities, although estimates vary widely depending on the definition of disability used. One source estimated that approximately 50 percent of adult AFDC recipients have disabilities or have a child with a disability (National Council on Disability, 1997). Estimates from other studies range from 10 percent to 40 percent (Johnson and Meckstoth, 1998; Brady, Meyers, and Luks, 1998; Wolfe and Hill, 1995).

Under TANF, states may require all recipients, including those with disabilities, to participate in welfare-to-work program activities although the work requirements for people with disabilities vary across states. Under AFDC, people with disabilities were eligible for unlimited assistance as long as they met the income requirements and had a dependent child living in the household. TANF now subjects these individuals in most states to time limits, although polices vary by state (Thompson et al., 1998). Finally, unlike under AFDC, TANF recipients are not automatically eligible for Medicaid but must qualify for Medicaid separately. To determine Medicaid eligibility, states may not use a standard more restrictive than the July 1996 AFDC income and resource standard eligibility criteria. Each state has the flexibility to lower this standard to the standard in effect in May 1988. States may also raise the standard annually but by no more than the percentage point increase in the Consumer Price Index. The median monthly cash benefit for a family of four receiving TANF assistance in 1998 was $463 (Committee on Ways and Means, 1998).

The latest legislative efforts continue the emphasis on self-determination and consumer control of services, promoting independence, improving opportunities and reducing disincentives to work. The SGA level was increased from $500 to $700 in July 1999. The adjustment is the first of its kind since 1990, and reflects growth in average wages since that time. The SGA level will now be adjusted annually, based on increases in the national average wage index. SGA rose to $740 in January 2001.

WIA organized federal statutes governing the job training, adult education and literacy, and VR programs into a one-stop delivery system.5 Under this system, states are required to implement workforce development plans that describe how the state will meet the needs of major customer groups, including individuals with disabilities, and show how the plans will ensure nondiscrimination and equal opportunity. Services are to be provided through One-Stop delivery systems, under which separate workforce investment, education and human service programs are linked (physically or technologically) to provide coordinated service delivery. Some of the partners in this system include employment services, adult education, post-secondary vocational education, VR, Welfare-to-Work, and Community Services Block Grants. In many states, these systems are directly linked to VR and/or TANF services. Local workforce investment boards (WIBs) coordinate WIA service delivery, and each WIB includes a Youth Council to coordinate youth services. WIA also provides for the awarding of competitive one-time, time-limited grants, contracts or cooperative agreements to eligible entities to establish self-employment projects for individuals with disabilities. Individuals who receive SSDI or SSI are automatically eligible under the WIA for VR services (Silverstein, 2000).

The One-Stop delivery systems, which are central to WIA, have the potential to improve substantially the delivery of services to individuals with disabilities seeking either to obtain employment or to advance in their careers. Critical to their success will be the extent to which the centers are accessible, and the extent to which a full range of services are readily available. Efforts are underway to ensure that individuals with physical and sensory disabilities do not encounter architectural or other physical barriers at One-Stop centers, and that they are able to read the available materials and resources and communicate with staff members.

Access to services will be dependent upon the extent to which service integration occurs. In some states, VR services are integrated into One-Stop center activities. In other states, VR services and programs have yet to be coordinated with the array of services available to applicants. To best serve individuals with disabilities, One-Stop centers must ensure that the professionals performing intake, eligibility, program planning and case management functions in the centers are fully aware of the unique needs of individuals with disabilities, and that they are authorized to provide the services and supports necessary for them to pursue their occupational goals (Kregel, 2001).

The Ticket to Work and Work Incentive Improvement Act (Ticket Act) of 1999 fundamentally alters the delivery of VR and other public employment services. The Ticket Act established the Ticket to Work (TTW) program, which provides SSDI and SSI beneficiaries who are appropriate candidates with a voucher, or ticket, to be used to obtain VR or employment services from participating public and private employment networks. The program aims to improve access by reducing the role of the Social Security Administration (SSA) in the VR process and allowing market forces to reward providers who successfully move people with disabilities into work, both through the use of a voucher system and a performance-based contract. The Ticket Act also directs SSA to establish a community-based benefit planning and assistance program for the purpose of providing accurate information related to work incentives to beneficiaries with disabilities.

Regarding access to health care, the Ticket Act also loosens restrictions on states regarding who is eligible to buy into the Medicaid Buy-in program. States are able to continue to offer the Medicaid Buy-in to workers with disabilities, even if they are no longer eligible for SSDI or SSI because of medical improvement. Offering a Medicaid Buy-in program remains optional for the states. The Ticket Act also extends the continuation of Medicare Part A coverage for individuals formerly receiving SSDI benefits from four years to eight-and-a-half years.

The Ticket Act also addresses a number of the work disincentives inherent in the SSDI and SSI programs. Under the current law, an individual with a disability choosing to return to work faces the risk of losing eligibility for benefits in the short run and the risk of not being able to return to the disability roles in the event that his or her employment is terminated. Although the health insurance provisions described above address a significant part of this risk, the threat of losing eligibility for cash benefits remains. Several provisions of the Ticket Act address these concerns. First, individuals who are actively participating in the TTW program are not subject to continuing disability reviews (CDRs). Non-participants are still subject to CDRs; however, work activity may no longer be used to trigger such a review. Second, the Ticket Act allows for expedited eligibility determinations for former beneficiaries who, after a lengthy period of subsequent employment, are no longer able to work.

The Ticket Act also grants SSA demonstration authority to evaluate the effects of a $1 for $2 reduction in SSDI payments for earnings over a specified level. This "phase-out" of benefits will make the SSDI benefit and incentive structure more similar to that of SSI. Currently, SSDI recipients who earn at the SGA level lose all benefits, which creates a substantial disincentive to increase earnings.

To encourage inter-agency cooperation on employment initiatives for people with disabilities, President Clinton in 1998 established the Presidential Task Force on the Employment of Adults with Disabilities. The mandate of the Task Force is to evaluate existing federal programs to determine what changes, modifications, and innovations may be necessary to remove barriers to employment opportunities faced by adults with disabilities. In 2001, Congress approved a new Office of Disability Employment Policy for the Department of Labor, which integrates the programs and staff of the former President's Committee on Employment of People with Disabilities. The Office's mission is to facilitate the communication, coordination, and promotion of public and private efforts to enhance the employment of people with disabilities. The Office provides information, training, and technical assistance to America's business leaders, organized labor, rehabilitation and service providers, advocacy organizations, families and individuals with disabilities through a variety of programs. Such programs include the Job Accommodation Network, Project EMPLOY, the Business Leadership Network, and the Workforce Recruitment Program.