In what is being hailed as "the first civil rights bill of the new century," Congress overwhelmingly passed a bill that prohibits the use of genetic information and genetic testing in underwriting with respect to health insurance and employment. President Bush signed the Genetic Information Nondiscrimination Act of 2008 (GINA), passed May 1, 2008, on May 21, 2008. The Administration previously had signaled its support. The Act amends the Employee Retirement Income Security Act of 1974 (ERISA), the Public Health Service Act (PHSA), the Internal Revenue Code and Title XVIII of the Social Security Act (Medicare). The legislation will have a significant impact on the way that health insurers do business nationwide by prohibiting the use of genetic information to cancel, deny, refuse to renew or alter the terms or premiums of health plans subject to ERISA.
GINA prohibits health insurance issuers from requiring an individual or family member to undergo genetic testing and forbids a health insurer from adjusting premiums based on a person's genetic information - broadly defined to include the genetic tests of an individual and their family members, as well as "the manifestation of a disease or disorder in family members of such individual." Similarly, group health insurers will be barred from adjusting group premiums based on the genetic information of either a person in the group or a family member of a person in the group. Furthermore, health insurers cannot invoke a pre-existing condition exclusion on the basis of genetic information and cannot use genetic information for underwriting purposes or determining eligibility for health insurance. While the legislation prohibits the collection of genetic information, there is a narrow exception that permits an insurer to request voluntary submission of genetic information for research purposes subject to narrow guidelines and the condition that none of the genetic information collected for research be used for underwriting purposes.
Although GINA prohibits health insurers from relying on "the manifestation of a disease or disorder in family members of such individual" as a basis for adjusting premiums and underwriting, the legislation does permit an insurer to increase premiums based on the subsequent manifestation of a disease or disorder of an individual enrolled in a plan. However, the manifestation of a disease or disorder of one individual cannot be used as genetic information about their family members or other group members enrolled in the plan to further increase the plan premiums.
Sponsored by Senator Olympia Snowe (R-ME) and Representative Louise Slaughter (D-NY), GINA aims to provide a uniform measure of privacy protections and promote participation in genetic research and testing for early diagnosis and preventative care. Currently, most states prohibit discrimination with respect to health insurance and employment based on genetic information, but inconsistencies exist with regard to the health insurance market. For example, some state laws may apply only to group health insurers, while other state statutes may apply only to individual health insurers. Additionally, states do not have a uniform definition of genetic information. Significantly, under ERISA, states cannot regulate employer-purchased health plans - which represent the lion's share of the health insurance market.
Research suggested that in the absence of legislation prohibiting discrimination based on genetic information, individuals were reluctant to undergo genetic testing and screening for fear of higher insurance premiums, denial of coverage or negative employment consequences. Historical precedents also provided a strong incentive for federal legislation, such as the use of secret pre-employment genetic screening and state laws mandating testing for certain genetic traits. In light of the serious public health consequences and significant privacy and civil rights issues associated with such measures, GINA has enjoyed virtually unanimous support from both Republican and Democratic administrations.
Notably, the legislation only applies to health insurance and not to life insurance or annuities. Since the vast majority of health insurance is group rated and offered on a yearly contract basis, the prohibition on the use of genetic information did not garner serious opposition from the industry. Genetic information, particularly since it is defined to include the manifestation of a disease or disorder in family members, likely is more important to rating life insurance and annuities.
GINA also bars employers from relying on an individual's genetic information when making employment-related decisions such as hiring, promotion or firing.
Karalee C. Morell is a Partner in Wiley Rein's Insurance Regulation Practice. Ms. Morell has experience with insurance coverage for pharmaceuticals, asbestos, mold, bankruptcy, business interruption, technology, products liability, construction defects and environmental claims. Xavier Baker is an Associate in the group and assists clients in a variety of litigation and regulatory matters involving a wide range of insurance coverage disputes, reinsurance, securities and environmental claims.His experience includes large scale property losses as well as environmental and asbestos litigation.