Employee Benefits Compliance Bulletin New Genetic Information Nondiscrimination Act Prohibits Discrimination By Employers and Health Plans*
August 20, 2008 On May 21, 2008, the Genetic Information Nondiscrimination Act of 2008 (“GINA”) became law. For years Congress had considered different versions of the legislation. After the Senate approved an amended version of GINA by a vote of 95-0 and the House by a vote of 414-1, President Bush signed GINA into law. GINA broadens the scope of protections afforded individuals against the illegal or unauthorized usage of genetic information by imposing certain prohibitions on health plans, insurers, and employers. Title I of GINA, which relates to health plans, expands the existing nondiscrimination requirements contained in the Health Insurance Portability and Accountability Act (“HIPAA”) by amending the relevant provisions of the Employee Retirement Income Security Act of 1974 (“ERISA”), the Public Health Service Act, the Internal Revenue Code of 1986, and Title XVIII of the Social Security Act (relating to Medigap plans). Title II of GINA creates a new law prohibiting discrimination on the basis of “genetic information” with respect to employment. In our view, GINA should not significantly impact employers. GINA, it is hoped, will encourage Americans to participate in genetic research and to undergo potentially beneficial genetic tests and treatment by eliminating fears that doing so will endanger their privacy, jobs, or health insurance. GINA defines “genetic information” as information about an individual or his or her family’s genetic test(s) and/or about a family member’s manifested disease or disorder, except information about sex or age. It defines “genetic test” as an analysis of human DNA, RNA, chromosomes, proteins, or metabolites that detects genotypes, mutations, or chromosomal changes.” An Overview of GINA’s Key Provisions with Regard to Health Insurance GINA prohibits group health plans and health insurance issuers offering health coverage in connection with such a plan from: requesting or requiring genetic testing; increasing group premiums or denying enrollment based on genetic information; requesting, requiring, or purchasing genetic information for underwriting purposes or with respect to any individual prior to enrollment and in connection with enrollment; and using or disclosing genetic information about an individual for underwriting purposes. In addition, GINA prohibits insurers in the individual market from establishing enrollment eligibility rules, including continued eligibility, based on genetic information and prohibits such insurers from imposing a pre-existing condition exclusion based on genetic information. (The existing HIPAA law already contains such a provision applicable to group health plans.) An Overview of GINA’s Key Provisions with Regard to Employment GINA prohibits employers, employment agencies, labor organizations, and joint labor-management committees controlling apprenticeship and other training programs from: making employment decisions based on genetic information (e.g., hiring, firing, promoting, etc.); retaliating against individuals who exercise their rights under GINA;
requesting or requiring genetic information, except in limited circumstances; and disclosing genetic information about an individual, except in limited circumstances. Key Definitions in GINA GINA broadly defines “genetic information” as information about an individual or his or her family’s genetic test(s) and/or about a family member’s manifested disease or disorder. For example, the results of a genetic test indicating that an employee carries an altered BRCA1 gene (which predisposes her to breast cancer) or the fact that her mother and grandmother had breast cancer would constitute “genetic information” under GINA. However, the fact that she has breast cancer is not “genetic information.” (This is true despite the fact that breast cancer, like many conditions, has a genetic component.) GINA’s definition of “genetic information” excludes information about sex or age but includes genetic information about a fetus carried by a pregnant woman or a legally-held embryo. The definition also includes requests for or the receipt of “genetic services” by the individual or his or her family’s participation in clinical research that includes “genetic services.” The term “genetic services” includes genetic testing, genetic counseling, or genetic education. GINA liberally defines the term “family member” to include dependents (as that term is used for purposes of HIPAA’s special enrollment rules) or any other first, second, third, or fourth-degree relative. “Genetic test” is defined as an “analysis of human DNA, RNA, chromosomes, proteins, or metabolites that detects genotypes, mutations, or chromosomal changes.” It does not include an analysis of human DNA, RNA, chromosomes, proteins, or metabolites, that does not detect genotypes, mutations, or chromosomal changes. Nor does it include a protein or metabolite analysis directly related to a manifested disease or disorder that is reasonably detectable by an appropriately trained healthcare professional. Provisions Relating to Health Insurance Under current law (HIPAA), group health plans and health insurance issuers in connection with such plans are prohibited from discriminating against individuals in either eligibility to enroll or in premium contributions based on “health status-related factors,” which are defined to include “genetic information.” However, prior to GINA’s amendments, there was nothing in HIPAA prohibiting a group health plan or issuer from charging an employer more for coverage based on genetic information. Accordingly, GINA expands the current prohibitions by specifically stating that group health plans and insurers may not adjust premiums or contribution amounts, or deny enrollment based on a person’s genetic information. It should also be noted that GINA prohibits insurers in the individual market from establishing enrollment eligibility rules, adjusting premium or contribution amounts, or imposing preexisting condition exclusions based on genetic information. The law also prohibits issuers of Medicare supplemental policies from denying or conditioning a policy’s issuance or effectiveness, imposing any exclusion of benefits, or discriminating in the pricing of the policy on the basis of genetic information. Turning to the acquisition of genetic information, group health plans and issuers may not require genetic testing or request, require, or purchase genetic information for underwriting purposes, or for any purpose, with respect to an individual prior to enrollment and in connection with enrollment. However, a group health plan or insurer that obtains genetic information incidental to a request, requirement, or purchase of other information is not violating GINA. Group health plans and insurers may still obtain and use genetic information from a genetic test to make a determination regarding payment, but only the “minimum amount” necessary to accomplish such a purpose. In addition, pursuant to GINA’s research carve-out, participants or beneficiaries may be requested, but not required, to undergo genetic testing for research purposes if certain special criteria are met. Such a request must be in writing, and the research must comply with existing law regulating the use of human research subjects. Participation must be entirely voluntary, and the plan or insurer must make clear that
non-participation will not affect enrollment status or premium or contribution amounts. No genetic information collected through the research may be used for underwriting. The plan or insurer must notify the Secretary of Health and Human Services about the research and comply with any applicable regulations. Preemption GINA was placed in Part 7 of ERISA, which contains its own preemption provision (ERISA § 731). Pursuant to these provisions, self-insured plans are subject to federal requirements. If a state has a lesser standard, federal law controls, whereas if a state has a more stringent standard, state law controls (i.e., traditional ERISA preemption analysis). However, for insured plans, state insurance laws that do not “prevent the application of” a federal requirement are saved. Thus, states can be more protective of participants and beneficiaries with respect to insurance coverage. Penalties for Non-compliance GINA amends ERISA’s civil enforcement provisions to add monetary penalties for violations of the law. The Secretary of Labor may assess penalties in the amount of up to $100 per day for each day of noncompliance with respect to each participant or beneficiary to whom such non-compliance relates. The statute further provides that penalties for de minimis violations must be at least $2,500, and higher penalties are imposed for violations that are more than de minimis. Significantly, GINA also delineates special circumstances in which penalties for certain violations will not be imposed, such as when noncompliance was neither known nor discoverable by reasonable diligence or where it was due to a reasonable cause (not willful neglect) and promptly corrected. The law also establishes an overall limitation on penalties for unintentional non-compliance and allows the Secretary to waive part or all of the penalty. As a result of GINA’s amendments to the HIPAA provisions contained in the Internal Revenue Code, excise taxes may also be imposed on group health plans for violations of the law. Provisions Relating to Genetic Privacy HIPAA includes relatively broad protections for personal health information, which would ordinarily be construed to include genetic test results. GINA requires that the HIPAA privacy regulations be amended to explicitly add “genetic information” to the definition of “health information” under HIPAA (therefore making clear that information about a person’s family is also covered) and to prohibit the use and disclosure of such information for underwriting purposes. The change would also effectively prohibit an individual from consenting to the use of genetic information for underwriting purposes. Impact on Group Health Plans and the Health Insurance Industry As existing law (i.e., HIPAA) already prohibits certain discrimination against individuals in health coverage on the basis of genetic information, the principal impact of GINA on health plans and insurers will come in the form of: (i) the prohibition on raising group rates to employers on the basis of genetic information or using genetic information in the underwriting process; and (ii) the application of the nondiscrimination requirements to the individual health insurance market. These provisions of GINA become effective with respect to plan years that begin one year after the law’s enactment (for group health plans) or, for any plan marketed to individuals one year after enactment.
Provisions Relating to Employment Title II of GINA prohibits employment discrimination on the basis of genetic information. Specifically, it forbids an employer, employment agency, labor organization or joint labor-management committee controlling apprenticeship or other training programs (“Covered Entity”) to discriminate against an employee (private or state), applicant (private or state), individual, or member on the basis of genetic information by:
“(1) failing to hire or discharging an employee or otherwise discriminating against an employee with respect to the compensation, terms, conditions, or privileges of employment; (2) for an employment agency, by failing or refusing to refer an individual for employment; (3) for a labor organization, by excluding or expelling a member from the organization; (4) for an employment agency, labor organization, or joint labor-management committee, by causing or attempting to cause an employer to discriminate against a member in violation of this Act; or (5) for an employer, labor organization, or joint labor-management committee, by discriminating against an individual in admission to, or employment in, any program established to provide apprenticeships or other training or retraining.” In addition, covered entities may not limit, segregate, or classify employees, applicants, or members, in a way, because of genetic information that would deprive or tend to deprive them of employment opportunities or adversely affect their employment status. Nor may covered entities retaliate against anyone who opposes Title II violations, such as by filing a complaint alleging GINA violations or participating in an investigation of a suspected GINA violation. Who Is Covered? GINA applies to any employee, applicant, or member and any employer or entity currently covered by § 701(f) or § 717(a) of the Civil Rights Act of 1964, § 101 of the Congressional Accountability Act of 1995, or § 411(c) of Title 3 of the U.S. Code. It also applies to state employees or applicants covered by § 304(a) of the Government Employee Rights Act of 1991. Simply put, GINA applies to the same individuals and entities currently covered by Title VII. Acquiring Genetic Information As with Title I, GINA generally prohibits covered entities from requesting, requiring, or buying a covered individual’s or family member’s genetic information. However, some exceptions do exist. For instance, a covered entity’s inadvertent request for the family medical history of a covered individual or his/her family member does not violate the Act. Another exception covers instances in which a covered entity acquires a family history arising from a covered entity’s purchase of commercially and publicly available documents (but not medical databases or court records) that contain a family medical history. Another exception exists where: (1) a covered entity offers health or genetic services to a covered individual (including a participant in a wellness program); (2) the individual provides prior, knowing, voluntary, written authorization; (3) only the individual (or his or her family member receiving genetic services) and the healthcare professional or genetic counselor involved receive individually identifiable information concerning the results of the genetic services; and (4) that identifiable information is not disclosed, except in an aggregate form that will not identify the specific employee. However, no adverse use may be made with this information. GINA also permits covered entities to request or require a family medical history where necessary to comply with certification requirements of family and medical leave laws, to genetically monitor the biological effects of toxic substances in the workplace under certain circumstances, and to conduct a DNA analysis for law enforcement purposes. Significantly, a covered entity does not violate GINA by using, acquiring, or disclosing non-genetic medical information about a covered individual’s manifested disease, disorder, or condition, even if that disease, disorder, or condition has or may have a genetic basis. In other words, Employer X does not violate GINA when it tells its workers’ compensation carrier that Employee B is seeking workers’ compensation to cover her carpal tunnel syndrome, allegedly caused by repetitive key-stroking at work. This is true even if Employee B has a genotype that predisposes her to carpal tunnel because Employer X is disclosing information about Employee B’s manifested condition, not her genotype. Genetic Monitoring A covered entity may also request or require genetic information to genetically monitor the biological effects of toxic substances in the workplace provided certain conditions are met. Thus, the covered entity must give written notice of the monitoring to the covered individual, and if the monitoring is not required
by law, obtain his or her prior, knowing, voluntary, written authorization. The covered entity must inform the covered individual of the monitoring results and ensure that the monitoring complies with applicable federal, state, and local laws and regulations. Also, the covered entity may only receive the monitoring results in an aggregate form that does not disclose the identity of the specific individual who was monitored. Provisions Relating to Genetic Privacy If for whatever reason, a covered entity possesses “genetic information” about an employee, applicant, or member, the covered entity must maintain that information on a separate form, in a separate medical file, marked and kept discretely as a confidential medical record. This information may only be disclosed in special circumstances, such as: to the individual at his or her request; to an occupational or other health researcher; in response to a court order; to a government official investigating GINA compliance if the information is relevant; to comply with state or federal family and medical leave requirements; or to a federal, state, or local public health agency and only with regard to information that concerns a contagious deadly disease or life-threatening illness. With regard to disclosure in response to a Court Order, special conditions apply. Only the “genetic information” expressly authorized by the Order may be disclosed. If the individual is unaware of the Order, the covered entity must tell him/her about the Order and what genetic information was disclosed pursuant to it. No Disparate Impact Claim – Yet Currently, Title II allows for disparate treatment, but not disparate impact claims, alleging genetic discrimination. However, it also creates a special eight person commission – The Genetic Nondiscrimination Study Commission – which will review the current state of genetics and eventually make recommendations as to whether Congress should amend GINA to allow disparate impact claims. Enforcement, Remedies, and Damages GINA does not preempt state employment laws. It also makes clear that nothing in Title II should be construed to provide for the enforcement of or penalties for Title I violations. Nor can it be construed to require any specific insurance benefit for a covered individual or family member. Turning to enforcement mechanisms and monetary penalties for violations, the same powers, remedies, and procedures currently used for Title VII and the ADA are available under GINA. (These damages are outlined in 42 U.S.C. § 1981a.) GINA’s remedies are determined by which Act would otherwise cover the individual. With regard to employees or applicants who come under GINA’s embrace because they were already covered by Title VII, the same powers, remedies, procedures and damages as available under Title VII are available to them. Title III of GINA Amends FLSA’s Child Labor Provisions Title III of GINA amends the Fair Labor Standards Act to increase the penalty for child labor violations to $11,000 for each such violation. It also adds a provision allowing the U.S. Department of Labor to assess a penalty of $50,000 when a violation results in a minor’s death or serious injury, and a possible $100,000 penalty for repeated or willful violations. Title III also increases the civil penalty for any repeated or willful violation of the minimum wage or maximum hours requirements to an amount not exceeding $1,100 for each violation. The penalty increase is predicted to net approximately one million dollars annually.
What Should Employers Do Now? Employers – executives, officers, managers, and/or supervisors – would do well to adhere to the following: Don’t make employment decisions based on genetic information; Don’t retaliate against persons who report or complain about alleged GINA violations; Avoid asking questions about genetic testing or test results; Never ask whether a condition “runs in the family”; Don’t request or require genetic information or testing unless one of the exceptions outlined above applies; and/or If you do have genetic information, keep it confidential, and don’t disclose it unless in the special circumstances outlined above. GINA-related issues will most likely arise in the context of accommodating a disability or when a healthcare professional inadvertently sends an employer an employee or applicant’s genetic information. In these situations, employers must refrain from making employment decisions based on the information. They must also be careful to keep the information confidential. GINA is unlikely to have significant immediate implications for employers because most employers do not use genetic information. Indeed, while numerous states already have genetic bias laws, there has been very little litigation. However, no one denies that GINA may be useful in allaying fears of genetic discrimination. To the extent GINA dispels public fears and encourages people to undergo genetic testing and to participate in genetic research, it will be helpful. However, as with any new law, GINA runs the risk of giving rise to frivolous lawsuits and potentially fraudulent claims.
* This information is provided as a service to Stanton Group clients through our relationship with Proskauer Rose LLP. The information represents a general summary of employee benefits and/or human resources issues and is not intended to represent any form of legal advice or opinion. Stanton Group recommends that clients confer with independent legal counsel before taking any action relating to this communication. For more information about Proskauer Rose, contact pmarathas@proskauer.com. The recipient of this publication is encouraged to share it with other individuals within his/her organization. For more information on these and other matters pertaining to health and disability plans and other employee benefit programs, please contact your Stanton Group consultant, or send an e-mail inquiry to info@stanton-group.com.
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