New law prohibits insurers from genetic discrimination
Congress passed — and the President signed — a bill prohibiting discrimination by health plans and employers based on an individual’s genetic makeup. The Genetic Information Nondiscrimination Act of 2008 (GINA) will apply to health insurance programs one year after it becomes law. The employment provisions will apply six months later.
There appears to be little reason for a new federal law outlawing genetic discrimination, as there are only a handful of reported instances of genetic discrimination by employers and insurance companies. Genetic-based discrimination by health plans has been outlawed since 1996 under the Health Insurance Portability and Accountability Act’s (HIPAA) rules prohibiting discrimination on the basis of health status.
But it’s an election year, and sometimes Congress plucks at easy, low-hanging fruit. To be fair, HIPAA did not address genetic-based discrimination in hiring, firing, or other terms and conditions of employment. And in the absence of federal regulation, a number of states enacted laws that address genetic discrimination. Congress decided it was time for a federal standard.
GINA’s health plan-related provisions will apply to nearly all forms of health insurance, including coverage under self-funded Employee Retirement Income Security Act (ERISA) plans, fully insured group and individual health insurance, and Medigap policies. As with HIPAA’s privacy and security rules, GINA applies to non-ERISA plans such as governmental and church plans. “Excepted benefits” under HIPAA, such as limited scope dental and vision coverage, are not covered by the new law.
Under GINA, group health plans and health insurers may not:
- Adjust premiums or contributions based on genetic information,
- Collect genetic testing information, or
- Require that an individual or family member undergo a genetic test (subject to an exception for voluntary genetic testing that is used solely for research purposes).
“Genetic information” includes any analysis of human Deoxyribonucleic acid (DNA), Ribonucleic acid (RNA), chromosomes, proteins or metabolites that detects genotypes, mutations or chromosomal changes. That includes genetic information of a family member or a fetus, but not information related to age or sex. If a family member has a genetically-based disease or disorder, that fact is considered protected genetic information.
GINA allows a health insurer to increase premiums charged to an employer based on an individual insured’s disease or disorder that has a genetic basis and poses an increased risk to the insurer. But the insurer cannot use the information to further increase premium rates for the entire group. The insurer cannot assume that because one member of the group has a genetic-based illness, other members of the group may, too. Regulatory agencies are expected to define the exact parameters of that rule.
Importantly, in the insurance context, the new law only applies to health insurance. It does not apply to disability, life or long-term care insurance. “Stoploss” insurance for self-funded plans also appears to be exempt from the law.
The new law also impacts HIPAA privacy rules. Within 60 days of the law’s effective date, the Department of Health and Human Services (HHS) must revise the HIPAA privacy regulations to prohibit a group health plan or health insurer from disclosing genetic information for underwriting purposes.
Like HIPAA, enforcement of the new law will be divided between three federal agencies: the U.S. Department of Labor enforces the rules for ERISA plans, Internal Revenue Service has jurisdiction over the tax issues, and HHS enforces the rules for health insurance companies and self-funded governmental plans under the Public Health Services Act (PHSA). The law requires that DOL, IRS and HHS issue concurrent regulations on the law within 12 months of its effective date. The law applies penalties under ERISA, the Tax Code and the PHSA for violating the rules. Penalties also apply under the employment provisions of the law.
Oddly, the employment discrimination rules of the new law contain special rules that apply to wellness programs. An employer may offer genetic testing services as part of a “wellness program” (an undefined term). To qualify, the employee must provide a written authorization, and the employer is strictly prohibited from having access to any individually identifiable information.
What It Means
Most employer group health plans will be unaffected by the new law. To the extent an employer wants to offer genetic testing under its health insurance or wellness program, it will need to be sure that the information is treated as highly confidential by the vendor and not disclosed to the employer in any identifiable form.
Employers who maintain HIPAA privacy and security policies might need to modify those documents to reflect the rules regarding nondisclosure of genetic information for underwriting.
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