Employers, Health Plans & Insurers Face Significant New Nondiscrimination & Other RulesCynthia Stamer
May 22, 2008 — 1,605 views
The broad definition of the term “genetic information” contained in the Genetic Information Nondiscrimination Act of 2008, H.R. 493 (GINA) means employers, employment agencies, labor organizations, joint labor-management committees, group health plans and insurers will need to carefully review and update their group health plan, family leave, disability accommodation, and other existing policies and practices to comply with forthcoming implementing regulations to avoid liability under new GINA’s rules governing genetic information collection, use, protection and disclosure signed into law by President Bush earlier today, Wednesday, May 21, 2008.
As signed into law, GINA amends Title VII of the Civil Rights Act. the Health Insurance Portability and Accountability Act of 1996 (HIPAA), the Employee Retirement Income Security Act of 1974 (ERISA), the Public Health Service Act, the Internal Revenue Code of 1986, and Title XVIII (Medicare) of the Social Security Act to implement sweeping new federal restrictions on the collection, use, and disclosure of information that falls within its broad definition of “genetic information” by these covered entities.
The implications of GINA for employers, group health plans, health insurers, unions and other entities covered by its provisions promise to be particularly sweeping because of its broad definition of genetic information. Under GINA, “genetic information” is defined to mean with respect to any individual, information about:(1) such individual's genetic tests; (2) the genetic tests of family members of such individual; and (3) the manifestation of a disease or disorder in family members of such individual.
GINA also specifies that any reference to genetic information concerning an individual or family member includes genetic information of a fetus carried by a pregnant woman and an embryo legally held by an individual or family member utilizing an assisted reproductive technology.
Pending issuance of regulatory guidance, Gina’s inclusion of information about the “manifestation of a disease or disorder in family members” raises potential challenges for a broad range of wellness and safety, leave, and other employment and benefit practices, particularly as apparently will reach a broader range of conditions than those currently protected under the disability discrimination prohibitions of the Americans With Disabilities Act (“ADA”). For this reason, employers, group health plans and other covered parties should be diligent to monitor and undertake timely compliance efforts, to monitor and provide constructive input to the agencies that will be responsible for issuing implementing regulations on proposed regulations, and to begin identifying workplace and benefit records and practices where genetic information currently may be collected or exist in preparation for coming into compliance with GINA’s requirements.
Restrictions On Employment Related Uses & Disclosures
Under GINA, employers, employment agencies, labor organizations and joint labor-management committees face significant liability for violating the sweeping nondiscrimination and confidentiality requirements of GINA concerning their use, maintenance and disclosure of genetic information. Under GINA, employees and individuals can sue for damages and other relief like currently available under Title VII of the Civil Rights Act of 1964 and other nondiscrimination laws. GINA’s employment related provisions include rules that will:(1) prohibit employers and employment agencies from discriminating based on genetic information in hiring, termination or referral decisions or in other decisions regarding compensation, terms, conditions or privileges of employment; (2) prohibit employers and employment agencies from limiting, segregating or classifying employees so as to deny employment opportunities to an employee based on genetic information; (3) bar labor organizations from excluding, expelling or otherwise discriminating against individuals based on genetic information;Prohibit employers, employment agencies and labor organizations from requesting, requiring or purchasing genetic information of an employee or an employee's family member except as allowed by GINA to satisfy certification requirements of family and medical leave laws, to monitor the biological effects of toxic substances in the workplace or other conditions specifically allowed by GINA; (4) prohibit employers, labor organizations and joint labor-management committees from discriminating in any decisions related to admission or employment in training or retraining programs, including apprenticeships based on genetic information; (5) mandate that in the narrow situations where limited cases where genetic information is obtained by a covered entity, it maintain the information on separate forms in separate medical files, treat the information as a confidential medical record, and not disclosure the genetic information except in those situations specifically allowed by GINA; and (6) prohibit any person from retaliating against an individual for opposing an act or practice made unlawful by GINA.
Group Health Plan and Health Insurance Restrictions
In addition to its regulation of the use of genetic information for employment and union related purposes, GINA also restricts the use of genetic information by health insurers and group health plans (including small plans) for underwriting, enrollment and premium purposes and requires safeguarding of genetic information in accordance with HIPAA.
As part of these rules, GINA expands federal restrictions on the use of genetic information by group health plans and health insurers when determining eligibility and premiums or for underwriting purposes. Specifically under GINA, group health plans and health insurers may not: (1) request, require or purchase genetic information for underwriting purposes or in advance of an individual's enrollment; (2) adjust premiums or contribution amounts of the group based on genetic information; or (3) request or require an individual or family member to undergo a genetic test except in limited situations specifically allowed buy GINA.
GINA also will prohibit insurers providing individual health insurance from establishing rules for eligibility, adjust premiums or contribution amounts for an individual, imposing preexisting condition exclusions based on, requesting or requiring individuals or family members to undergo genetic testing.
Noncompliance with GINA’s group health plan and insurer rules risks significant liability. Under amendments to ERISA made by GINA, group health plan noncompliance can create significant liability for both the plan and its sponsor. Participants or beneficiaries will be able to sue noncompliant group health plans for damages and equitable relief. If the participant or beneficiary can show an alleged violation would result in irreparable harm to the individual’s health, the participant or beneficiary may not have to exhaust certain otherwise applicable Department of Labor administrative remedies before bringing suit.
In addition to private suits, GINA also authorizes the imposition of penalties against employers and other sponsors of group health plans that violate applicable requirements of GINA of up to $500,000. The minimum penalties generally are set at the greater of $100 per day or a minimum penalty amount ranging from $2,500 for de minimus violations corrected before the health plan received notice of noncompliance to $15,000 in cases in which the violations are more than de minimus. GINA also includes language allowing the Secretary of Labor to reduce otherwise applicable penalties for violations that could not have been identified through the exercise of due diligence or when the plan corrects the violation quickly.
GINA also amends HIPAA to make clear that information that falls within its definition of “genetic information” also is protected health information for purposes of HIPAA. This means that it will require that all genetic information be treated as protected health information subject to the Privacy and Security Standards applicable to group health plans, health insurers, health care providers, and health care clearinghouses covered by HIPAA. As for other violations of the HIPAA Privacy and Security Standards, failures to administer genetic information in accordance with HIPAA’s Privacy and Security Rules can trigger the imposition of civil penalties of $100 per violation, up to $250,000 by the Department of Health & Human Services Office of Civil Rights, criminal prosecution leading to imprisonment for up to 10 years, or both.
GINA is scheduled to take effect in November, 2009, 18 months from its signature into law by President Bush. In anticipation of this date, GINA requires the Equal Employment Opportunity Commission (employment issues), the Department of Labor (ERISA issues), the Secretary of Health and Human Services (HIPAA and certain group health insurance issues) and the Secretary of Treasury (IRS issues) to publish regulations implementing its provisions within the next 12 months.
If you have any questions about or need assistance responding to GINA, monitoring, evaluating, commenting or responding to impending regulations about GINA, or other legal or operational concerns impacting your employment, employee benefits, health, safety or insurance and risk management practices, would like a copy of GINA, or if we may be of assistance with regard to any other employee benefit or employment related matters, please do not hesitate to contact Cynthia Marcotte Stamer at 972.419.7188.
Cynthia Marcotte Stamer, is nationally and internationally recognized for her work assisting businesses, governments, and other entities to develop creative strategies for dealing with employee benefit and related human resources, insurance, health care and finance concerns. Ms. Stamer helps businesses design, administer and defend cost-effective employee benefit other human resources programs, policies and procedures to meet their budgetary and other business objectives.