208 F.3d 266 (D.C. Cir. 2000)
Equal Employment Opportunity Commission, Appellantv.Aramark Corporation, Inc., Appellee
Nos. 99-5125, 99-7042
United States Court of AppealsFOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued January 13, 2000Decided April 14, 2000

Appeals from the United States District Court for the District of Columbia(No. 97cv00716)(No. 97cv00734)
Barbara L. Sloan, Attorney, Equal Employment Opportunity Commission, argued the cause for appellant.  With her  on the briefs was Philip B. Sklover, Associate General Counsel.
Leslie Robert Stellman argued the cause and filed the brief  for appellant Rebecca L. Fennell.
Ronald S. Honberg was on the brief for amicus curiae The  National Alliance for the Mentally Ill.
Ronald S. Cooper argued the cause and filed the briefs for appellees Aramark Corporation, Inc. and Aetna Life Insurance Company.
Phillip E. Stano was on the brief for amici curiae the  Health Insurance Association of America, the Equal Employment Advisory Council, the Chamber of Commerce of the  United States of America and the American Council of Life  Insurance.
Before:  Williams, Randolph and Tatel, Circuit Judges.
Opinion for the Court filed by Circuit Judge Tatel.
Tatel, Circuit Judge:


1
Claiming a violation of the Americans with Disabilities Act, appellants challenge an employee  benefit plan that provides twenty-four months of long-term  disability benefits for persons suffering from mental or psychological disabilities but a longer period of benefits for those  with physical disabilities.  Because the employer adopted the  plan prior to the ADA's enactment and because circuit precedent holds that such plans are protected by the statute's "safe  harbor" provision, we affirm the district court's grant of  summary judgment for the employer and plan administrator.


2
* Appellant Rebecca Fennell worked as a food service manager for appellee Aramark Corporation for ten years until  mental illness prevented her from performing her duties. Following Fennell's extended leave of absence due to depression and post-traumatic stress disorder, Aramark terminated  her employment on February 15, 1996.  She received Social  Security disability benefits and long-term disability payments under Aramark's employee benefit plan, administered by  appellee Aetna Life Insurance Company.  The plan provides  income replacement amounting to two-thirds of base monthly  salary for employees unable to work due to long-term disability resulting from illness, injury, or disease.  Funded by  contributions from Aramark and participating employees, the  plan limits disability payments to twenty-four months if the  disability is caused by a mental condition but continues  payments until at least age sixty-five if the disability is  physical.  In accordance with the plan's terms, Aetna notified  Fennell that because she had no physical impairment, her  benefit payments would be discontinued effective April 16,  1997, two years after she began receiving them.


3
Alleging that the plan's different benefit terms for mental  and physical disabilities amount to discrimination prohibited  by the Americans with Disabilities Act, Fennell filed a complaint with the Equal Employment Opportunity Commission  and then filed suit against Aramark and Aetna in the United  States District Court for the District of Columbia.  Three  days later, EEOC also filed suit, and the two cases were  consolidated.  Fennell claimed that the cutoff in benefit payments violates Title III of the ADA, 42 U.S.C. SS 12181-89,  which prohibits discrimination "on the basis of disability in  the full and equal enjoyment of the goods, services, facilities,  privileges, advantages, or accommodations of any place of  public accommodation...."  Id. S 12182(a).  EEOC argued  that the two-year limit violates Title I of the ADA, Id.  S 12111-17, which prohibits a covered employer from discriminating "against a qualified individual with a disability  because of the disability of such individual in regard to [the]  terms, conditions, and privileges of employment."  Id.  S 12112(a).


4
The district court granted summary judgment for Aramark  and Aetna.  See Fennell v. Aetna Life Ins. Co., 37 F. Supp.2d  40 (D.D.C. 1999).  With respect to EEOC's claim, the district  court observed that Title I protects only a "qualified individual with a disability," defined as "an individual with a disability  who, with or without reasonable accommodation, can perform the essential functions of the employment position that such  individual holds or desires."  42 U.S.C. S 12111(8).  Because  Fennell had become totally disabled and unable to perform  the essential functions of her job, the district court heldthat  she no longer met the definition of a "qualified individual with  a disability" and was therefore unprotected by Title I of the  ADA.  Fennell, 37 F.Supp. 2d at 43-44.  With respect to  Fennell's claim, the district court held that Title III only  requires elimination of barriers to access for the disabled in  places of public accommodation, which the court limited to  "physical locations."  Id. at 45.  Because a disability benefit  plan does not constitute a physical place of public accommodation, the court said, it is not regulated by Title III.


5
EEOC and Fennell appeal.  EEOC argues that the district  court erred by construing Title I narrowly to prevent former  employees no longer able to perform essential functions of  their previous jobs from ever suing under the ADA.  According to EEOC, the district court's ruling would prevent a  totally disabled former employee from suing for discrimination in post-employment benefits, even if those benefits had  been earned when she was a "qualified individual with a  disability."  Fennell argues that public accommodation refers  not just to physical locations, as the district court held, but  also to all available products and services including benefit  plans.  Our review is de novo.  See Cones v. Shalala, 199  F.3d 512, 516 (D.C. Cir. 2000).

II

6
Our sister circuits are divided on both issues that formed  the basis of the district court's grant of summary judgment  for Aramark and Aetna.  The Seventh, Ninth, and Eleventh  Circuits have held (as did the district court) that Title I of the  ADA provides no protection to a totally disabled former  employee because that person is no longer a "qualified individual with a disability."  See Weyer v. Twentieth Century  Fox Film Corp., 198 F.3d 1104, 1110 (9th Cir. 2000);  EEOC  v. CNA Ins. Cos., 96 F.3d 1039, 1045 (7th Cir. 1996);  Gonzales v. Garner Food Services, Inc., 89 F.3d 1523, 1531 (11th  Cir. 1996).  Reaching the opposite conclusion, the Second and Third Circuits have held that a former employee who had  earned fringe benefits while employed and "qualified" could  sue under Title I for discrimination in post-employment benefits despite the fact that at the time of the suit the former  employee had become completely disabled and no longer  "qualified."  See Ford v. Schering-Plough Corp., 145 F.3d  601, 608 (3d Cir. 1998), cert. denied, 525 U.S. 1093, 119 S. Ct.  850 (1999);  Castellano v. City of New York, 142 F.3d 58, 68  (2d Cir. 1998), cert. denied, 525 U.S. 820 (1998).  With respect  to Title III, the Third and Sixth Circuits (like the district  court) have limited Title III to ensuring access to physical  locations open to the public.  See Ford, 145 F.3d at 614;Parker v. Metropolitan Life Ins. Co., 121 F.3d 1006, 1014 (6th  Cir. 1997) (en banc), cert. denied, 522 U.S. 1084 (1998).  The  First and Second Circuits have held that the ADA's prohibition on disability discrimination in the products and services  of places of public accommodation is not limited to physical  structures and may in some instances include insurance policies and underwriting practices.  See Pallozzi v. Allstate Life  Ins. Co., 198 F.3d 28 (2d Cir. 1999), amended on denial of  reh'g, 204 F.3d 392 (2d Cir. 2000);  Carparts Distrib. Ctr., Inc.  v. Automotive Wholesaler's Ass'n of New England, Inc., 37  F.3d 12, 19 (1st Cir. 1994).


7
This circuit has expressed itself on neither of these disputed issues, nor need we do so now, for we have circuit  precedent under which we may affirm the district court on a  different ground--that the challenged plan is protected by  the ADA's safe harbor for bona fide employee benefit plans. Although the district court never addressed the safe harbor  provision, the issue is fully briefed, and because we review the  district court's judgment, not its reasoning, we may affirm on  any ground properly raised.  See, e.g., Doe v. Gates, 981 F.2d  1316, 1321-22 (D.C. Cir. 1993).


8
The ADA's safe harbor appears in section 501(c):  "Subchapters I through III of this chapter and title IV of this Act  shall not be construed to prohibit or restrict ...  a person or  organization covered by this chapter from establishing, sponsoring, observing or administering the terms of a bona fide  benefit plan that is not subject to State laws that regulate insurance."  42 U.S.C. § 12201(c)(3).  This safe harbor "shall  not be used as a subterfuge to evade the purposes" of Title I  or Title III of the ADA.  Id. S 12201(c).


9
The parties agree that Aramark's benefit plan "is bona fide  in that it exists and pays benefits."  Public Employees Retirement Sys. of Ohio v. Betts, 492 U.S. 158, 166 (1989)  (internal quotation marks omitted).  They also agree the plan  is not subject to state insurance regulation by virtue of  ERISA's preemption provisions.  Their disagreement centers  on the meaning of the safe harbor's "subterfuge" exception. Relying on our decision in Modderno v. King, 82 F.3d 1059  (D.C. Cir. 1996), Aramark and Aetna argue that their benefit  plan cannot fall into the subterfuge exception because Aramark adopted it before the ADA's enactment.  Fennell and  EEOC contend that any benefit plan that includes disability based distinctions, no matter when adopted, is a subterfuge if  those distinctions are not "based on sound actuarial principles."


10
Modderno involved a challenge to a benefit plan's lifetime  limit on mental health treatment reimbursement.  Although  the case arose under the Rehabilitation Act of 1973, which  prohibits disability discrimination in government employment,  that Act incorporates the ADA's safe harbor provision.  See  29 U.S.C. § 794(d).  The appellant in Modderno argued, as  do Fennell and EEOC, that in order to escape the safe  harbor's subterfuge exception, the employer had to show that  any differential treatment of disabled persons in a benefit  plan is actuarially justified.  Modderno rejected this actuarial  defense interpretation of subterfuge, finding it " 'at odds with  the plain language of the statute itself.' "  Modderno, 82 F.3d  at 1065 (quoting Betts, 492 U.S at 171).


11
Of particular significance to this case, Modderno went on to  hold that the plan challenged in that case could not be a  subterfuge because the employer had adopted it prior to the  Rehabilitation Act amendment that incorporated the subterfuge provision.  In support of this conclusion, Modderno  relied on two Supreme Court decisions interpreting a similar  subterfuge provision in the Age Discrimination in Employment Act of 1967: United Air Lines, Inc. v. McMann, 434  U.S. 192 (1977), and Betts, 492 U.S. 158.  In those two cases,  the Supreme Court construed "subterfuge" to have its "ordinary meaning as 'a scheme, plan, stratagem, or artifice of  evasion.' "  Betts, 492 U.S. at 167 (quoting McMann, 434 U.S.  at 203).  Recognizing that the ordinary meaning of subterfuge includes a specific intent to circumvent or evade a  statutory purpose, the Supreme Court held there could be no  such intent if the challenged provision had been adopted prior  to the statute's enactment.  "In McMann, for instance, where  the plan at issue had been adopted in 1941, long before the  enactment of the ADEA, the Court observed that '[t]o spell  out an intent in 1941 to evade a statutory requirement not  enacted until 1967 attributes, at the very least, a remarkable  prescience to the employer.' "  Modderno, 82 F.3d at 1064  (quoting McMann, 434 U.S. at 203).


12
Modderno's application of Betts and McMann to section  501(c) of the ADA controls this case.  It is undisputed that  Aramark's long-term disability benefit plan, including the  twenty-four-month cap on mental disability benefits challenged here, has been in place since at least 1982, long before  the ADA's 1990 enactment.  Under Modderno, therefore, the  twenty-four-month benefit limit cannot fall withinsection  501(c)'s subterfuge exception to the safe harbor.


13
Appellants offer three arguments why Modderno should  not control this case, none of which is convincing.  First, they  claim that Modderno was wrongly decided because it overlooked a difference between the language of section 501(c)'s  subterfuge provision and the language of the similar provision  in section 4(f)(2) of the ADEA interpreted by Betts.  They  point out that while the ADEA gave safe harbor to a benefit  plan "which is not a subterfuge to evade the purposes of this  chapter," the ADA substitutes the phrase "shall not be used  as a subterfuge to evade the purposes of subchapter[s] I and  III of this chapter" 29 U.S.C. § 623(f)(2) (1990);  42 U.S.C.  § 12201(c) (emphasis added).  Even if a panel of this court  could depart from settled precedent, which of course it cannot, see, e.g., LaShawn v. Barry, 87 F.3d 1389, 1395 (D.C. Cir.  1996) (en banc), we are unpersuaded that what EEOC itself acknowledges to be a "subtle difference in language"--the  addition of the words "used as"--would compel a different  result.


14
In enacting section 501(c) of the ADA, Congress repeated  the phrase "a subterfuge to evade the purposes of ... this  chapter" just one year after Betts had interpreted that precise phrase in section 4(f)(2) of the ADEA to exclude pre-Act  benefit plan provisions.  According to EEOC, Congress signaled its rejection of the Betts interpretation by changing the  words preceding that phrase from "is not" in the ADEA to  "shall not be used as" in the ADA.  While a benefit plan  cannot be a subterfuge to evade the purposes of a not-yetenacted statute, EEOC argues, it "can be 'used as a subterfuge' regardless of when the plan was adopted."  EEOC  contends that merely by including the words "used as" in  section 501(c), Congress expanded the subterfuge exception  to remove pre-ADA benefit plans from safe harbor protection.  Instead of protecting all pre-Act plans, the safe harbor, as  EEOC reads it, functions as an affirmative defense that  allows employers, benefit plan administrators, and insurance  underwriters to avoid liability for disability-based distinctions  by showing on the basis of "sound actuarial principles" that  the distinctions are riskor cost-justified.


15
The language of the two safe harbor provisions actually  differs more extensively than even EEOC points out.  The  ADEA provision examined in McMann and Betts reads in  pertinent part:


16
It shall not be unlawful for an employer, employment agency, or labor organization ... to observe the terms of... any bona fide employee benefit plan such as aretirement, pension, or insurance plan, which is not a subterfuge to evade the purposes of this chapter....


17
29 U.S.C. 623(f)(2) (1990).  The ADA provision reads as follows:


18
Sub chapters I through III of this chapter and title IV of this Act shall not be construed to prohibit or restrict--


19
(1) an insurer, hospital or medical service company, health maintenance organization, or any agent, or entity that administers benefit plans, or similar organizations from underwriting risks, classifying risks, or administering such risks that are based on or not inconsistent with State law; or


20
(2) a person or organization covered by this chapter from establishing, sponsoring, observing or administering the terms of a bona fide benefit plan that are based on underwriting risks, classifying risks, or administering such risks that are based on or not inconsistent with State law; or


21
(3) a person or organization covered by this chapter from establishing, sponsoring, observing or administering the terms of a bona fide benefit plan that is not subject to State laws that regulate insurance.


22
Paragraphs (1), (2), and (3) shall not be used as a subterfuge to evade the purposesof subchapter[s] I and III of this chapter.


23
42 U.S.C. § 12201(c).  Under the ADEA, a benefit plan falls within the safe harbor only if the plan is both (1) bona fide  and (2) not a subterfuge.  In the ADA, by contrast, a benefit  plan receives safe harbor protection if it is (1) bona fide and  (2) either consistent with or exempt from state law, but the  safe harbor provision "shall not be used as a subterfuge to  evade the purposes of" Titles I and III of the ADA.  In other  words, under the ADA, it is not the benefit plan, but the safe  harbor itself that shall not be used as a subterfuge.


24
We think these semantic distinctions, including the one on  which appellants rely, do not undermine Modderno.  As Modderno pointed out, the Supreme Court interpreted the  phrase "subterfuge to evade" to require a specific intent to  circumvent a statutory purpose, thus excluding from the  subterfuge exception all pre-Act plans.  82 F.2d at 1064.Fully aware of the judicial construction of this phrase, Congress used the very same phrase in the ADA's safe harbor."[W]hen Congress chose the term 'subterfuge' for the insurance safe-harbor of the ADA, it was on full alert as to what  the Court understood the word to mean and possessed (obviously) a full grasp of the linguistic devices available to avoid that meaning."  Id. at 1065.  See also Bragdon v. Abbott, 524  U.S. 624, 645 (1998) ("When ... judicial interpretations have  settled the meaning of an existing statutory provision, repetition of the same language in a new statute indicates, as a  general matter, the intent to incorporate its ... judicial  interpretations as well.").  Whether a benefit plan "is" a  subterfuge to evade the purposes of the law (the ADEA's  language), or whether the safe harbor for benefit plans is  "used as" a subterfuge to evade the purposes of the law (the  ADA's language), the plain meaning of the phrase "subterfuge to evade" remains as defined by McMann, Betts, and  Modderno--"a scheme, plan, stratagem, or artifice of evasion."  Under the ADA, then, "subterfuge to evade" still  requires intent and still excludes pre-Act plans like Aramark's because, as McMann said, "[t]o spell out an intent in  [1982] to evade a statutory requirement not enacted until  [1990] attributes, at the very least, a remarkable prescience  to the employer."  McMann, 434 U.S. at 203.  For the same  reason, "subterfuge to evade" cannot mean merely a lack of  actuarial justification.  Indeed, appellants' contention that the  safe harbor applies only to plans whose terms are actuarially  justified has been rejected not only by Modderno but also by  every other circuit to have considered the issue.  See Leonard F. v. Israel Discount Bank of New York, 199 F.3d 99, 105  (2d Cir. 1999) ("In the context of the subterfuge clause of  Section 501(c) of the ADA, neither the dictionary definition  nor the Supreme Court's reasonably suggests that absence of  actuarial justification for differential insurance benefits is  sufficient to demonstrate a 'subterfuge' to evade the purposes  of an Act, at least where the insurance policy was adopted  prior to the Act's passage.");  Rogers v. Department of Health  and Envtl. Control, 174 F.3d 431, 437 (4th Cir. 1999) ("[W]e  do not find anything in § 501(c) of the ADA (or anywhere else  in the Act) that requires a plan sponsor or administrator to  justify a plan's separate classification of mental disability with  actuarial data.");  Ford, 145 F.3d at 611-12 ("[W]e will not  construe section 501(c) to require a seismic shift in the  insurance business, namely requiring insurers to justify their  coverage plans in court after a mere allegation by a plaintiff.");  Parker, 121 F.3d at 1012 n. 5 (rejecting as inconsistent  with the statutory text the view expressed in the Department  of Justice Technical Assistance Manual that different insurance benefit or coverage levels based on disability are permitted only where "based on sound actuarial principles" or  "related to actual or reasonably anticipated experience");Krauel v. Iowa Methodist Med. Ctr., 95 F.3d 674, 678-79 (8thCir.1996) (rejecting EEOC's interim guidance explaining actuarial justification defense as contrary to the plain language  of the statute and thus not entitled to deference).


25
Congress's addition of the words "used as" is simply too  thin a reed on which to support appellants' claim that Congress intended to overrule Betts, remove pre-Act plans from  safe harbor protection, and give life to EEOC's uniformly  rejected actuarial justification theory.  After all, Congress  responded to Betts by totally deleting the subterfuge language from the ADEA, just before it included the similar  subterfuge provision in section 501(c) of the ADA.  See Older  Workers Benefit Protection Act of 1990, Pub.L. No. 101-433,  § 103(1) (codified at 29 U.S.C. § 623(f)(2)).  Had Congress  also intended to repudiate Betts for ADA purposes, it could  have omitted the provision from that statute as well.


26
Appellants' second argument is that Modderno's discussion  of section 501(c) is dicta.  As they read the case, the decision  rested on the observation that the plan provision challenged  there, a lifetime limit on reimbursement for mental health  treatment, did not discriminate on the basis of disability.  Given that "holding," the Commission claims, the panel's  discussion of section 501(c) was merely "ruminations" "not  necessary to its holding," and therefore not binding on us.Not only did EEOC fail to raise this argument until its reply  brief, see, e.g., Presbyterian Med. Ctr. of the Univ. of Penn.  Health Sys. v. Shalala, 170 F.3d 1146, 1152 (D.C. Cir. 1999)  (noting that we need not consider arguments raised for the  first time in a reply brief), but it rests on a misreading of  Modderno.  After concluding that "[b]ecause the coverage  limitations challenged by Modderno were enacted before the  1992 amendment of § 504 of the Rehabilitation Act (and there  is no suggestion that their enactment was prompted by an  expectation of amendment), they do not fall into the subterfuge exception to the ADA's safe-harbor," Modderno went on to say, in language the Commission fails to account for:"Thus, whether or not Modderno stated a claim under the  1992 amendment of § 504 apart from the safe-harbor provision--a question on which we express no opinion--the coverage limitations challenged by Modderno cannot violate  amended § 504."  Modderno, 82 F.3d at 1065 (emphasis  added).  Because Modderno's interpretation of the safe harbor was essential to its reasoning as well as to its disposition  of the claims before it, it stands as binding precedent.


27
Finally, EEOC argues that even assuming we follow Modderno's interpretation of section 501(c), this case differs from  Modderno because Aramark modified the plan after the  ADA's enactment.  Appellants rely on two specific changes in  Aramark's long-term disability benefit plan.  First, the twenty-four-month limit on benefit payments previously applied to  anyone whose disability is "a result of a mental or emotional  illness," but now applies to disabilities "caused to any extent  by a mental condition (including conditions related to alcoholism or drug abuse) described in the most current edition of  the Diagnostic and Statistical Manual of Mental Disorders,  published by the American Psychiatric Association."  Second,  for a mentally disabled participant confined to an inpatient  psychiatric hospital at the time the twenty-four-month period  ends, benefit payments under the prior plan would continue  for the duration of hospitalization;  under the revised plan,  continuation of benefits is limited to ninety days beyond the  twenty-four-month cutoff. According to EEOC, these two  changes remove Aramark's plan from automatic safe harbor  protection.  We disagree.


28
To begin with, whatever effect the plan amendments may  have, appellants concede that they did not apply to Fennell,  whose benefits would have terminated after twenty-four  months even under the plan's previous version.  Neither  appellant explains how the plan amendments could be a  subterfuge to evade the ADA and discriminate against Fennell if they did not affect her.


29
Asserting that its suit is not limited to seeking relief for  Fennell, EEOC argues that the plan amendments affected  others by "increas[ing] the number of people subject to the limitation."  Not only was this argument also raised for the  first time in EEOC's reply brief, but the Commission's complaint alleges neither that Aramark amended the plan for the  purpose of circumventing the ADA, i.e., that the amendments  were a subterfuge (its burden under Betts), nor that the  amendments have ever been applied to terminate benefits to  anyone not subject to the same cutoff under the previous  plan.


30
The judgment of the district court is affirmed.


31
So ordered.

