New Federal Law Prohibits Genetic Discrimination in Health Insurance and Benefit Plans

INSURANCE LAW ALERT
New Federal Law Prohibits Genetic Discrimination in Health Insurance and Benefit Plans

The Genetic Information Nondiscrimination Act (“GINA” or “the Act”) was signed into law
by President Bush on May 21, 2008. GINA arose out of concerns that advances in and
wider use of genetic testing could lead to new forms of discrimination. The Act prohibits
discrimination based upon genetic information by health insurers and employersponsored
health benefit plans. The GINA provisions targeted at insurers and health
plans go into effect for plan years beginning one year after the date of enactment. Prior
to the law’s effective date insurers and group health plans should examine how they
collect genetic information, identify which exemptions may apply to their collection
practices, and analyze whether their current practices comply with the Act’s confidentiality
provisions with respect to any genetic information they currently maintain.

GINA amends several other federal laws, including ERISA, the Public Health Safety Act
and the Internal Revenue Code. The purpose of the amendments is to prohibit group
health plans and health insurers from adjusting premium or contribution amounts on the
basis of genetic information. GINA calls for revision of the privacy regulation under HIPAA
to ban the use or disclosure by a group health plan or health insurer of genetic
information for underwriting purposes. The Act also prohibits group health plans and
health insurers from requesting or requiring that an individual or his/her family members
undergo genetic tests. In addition, the bill prohibits group health plans and health insurers
from requesting, requiring or purchasing genetic information for underwriting purposes or
in connection with the enrollment of an individual in the plan.

“Genetic information” is defined broadly in GINA. The term “genetic information” refers to
information about an individual’s genetic tests, genetic tests of the individual’s family
members, and the manifestation of a disease or disorder in family members. “Family
members” include not only the individual’s dependants, but also relatives of up to the
fourth degree. “Genetic information” does not, however, include information about sex or
age. Under very limited circumstances, group health plans may request, but may not
require, a participant or beneficiary to undergo genetic testing.

The penalties for even inadvertent noncompliance with GINA can be substantial. HHS
may impose monetary penalties on the plan sponsor or the insurance issuer of a group
health plan in the event of noncompliance with GINA. Penalties may be avoided if the
failure to comply was due to reasonable cause and not to willful neglect, and if such
failure is corrected within 30 days of the date the plan or insurer first became aware or
should have been aware of the failure. Penalties for inadvertent failures may be waived in
part by HHS to the extent the penalty would be excessive to the company. In addition to
risk of penalties, failure to comply with GINA may allow a plan participant or beneficiary to
seek relief available under ERISA, such as enjoining a violation or other appropriate
equitable relief.

GINA does not preempt other state and federal laws that may provide equal or greater
protection for individuals in the area of genetic information discrimination. Oregon already
has laws that provide protection for genetic information in some instances. The
regulations that will be promulgated by the EEOC and other federal agencies will
hopefully be of assistance in determining additional ways in which health plans and health
insurers must modify their activities to be compliant with GINA. We will provide an update
on GINA when the regulations are issued.

Insurance Law Practice Group
HARRANG LONG GARY RUDNICK P.C.

 

060408-Insurance-Law-Alert1.pdf
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