Plan sponsors and administrators must prepare their group health plans to comply with new restrictions on their collection, use and disclosure of genetic information applicable to group health plans under Title I of the Genetic Information Nondiscrimination Act of 2008.
Although GINA requires federal regulators to publish implementing regulations by May 20, 2009, as of May 8, officials have not released the regulations.
Defining ‘genetic’
The new requirements will become effective for many group health plans within the next 30 days. Consequently, the absence of regulatory guidance is creating concern for many group health plan sponsors who are uncertain about GINA’s implications on certain existing practices.
The broad definition of the term “genetic information” in GINA will require group health plan sponsors and insurers to carefully review and update their group health plan documents, communications, policies and practices to avoid liability.
For individual health insurers, GINA’s restrictions take effect May 22, 2009. Meanwhile, employers, unions and others face their own new prohibitions, which take effect Nov. 21, 2009, against using genetic information for employment practices.
The information included within GINA’s definition of “genetic information” means its new restrictions have a sweeping reach when applied to most group health plans. GINA defines “genetic information” to include, with respect to any individual, information about:
• Such individual's genetic tests;
• The genetic tests of family members of such individual; and
• The manifestation of a disease or disorder in family members of such individual.
Nondiscrimination rules
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 group health plans’ health risk assessments and other wellness and disease management programs.
Under GINA’s nondiscrimination rules, group health plans and health insurers may not:
• Request, require or purchase genetic information for underwriting purposes or in advance of an individual's enrollment;
• Adjust premiums or contribution amounts of the group based on genetic information;
• Request or require an individual or family member to undergo a genetic test except in limited situations specifically allowed by GINA;
• Impose a preexisting condition exclusion based solely on genetic information, in the absence of a diagnosis of a condition;
• Discriminate against individuals in eligibility and continued eligibility for benefits based on genetic information; or
• Discriminate against individuals in premium or contribution rates under the plan or coverage based on genetic information, although such a plan or issuer may adjust premium rates for an employer based on the manifestation of a disease or disorder of an individual enrolled in the plan.
Defending wellness and disease management
Of particular concern to many plan sponsors and fiduciaries are the potential implications of the new rules on existing wellness and disease management features under group health plans.
Plans sponsors and fiduciaries are concerned that regulators will construe certain commonly used practices of requiring covered persons to provide family medical histories or other genetic information through HRAs to qualify for certain financial incentives as a prohibited underwriting practice under GINA.
Even when HRAs are not used, however, most group health plan sponsors should anticipate that GINA will require specific amendments to their plan documents, communications and processes.
Facing penalties
Taking timely action to comply with the nondiscrimination and collection provisions is important. 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 administrative remedies governed by the Department of Labor before bringing suit.
GINA also authorizes the imposition of penalties, up to $500,000, against employers and other sponsors of group health plans that violate the applicable requirements of GINA.
The legislation includes language allowing the DOL 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.
Waiting for regs
Although federal regulators continue to indicate they intend to publish guidance “soon,” some commentators have expressed concern that the agencies will miss the deadline to publish GINA guidance.
Even if the agencies issue guidance by May 20, plan sponsors and administrators of group health plans with new plan years beginning in the next 60 to 90 days are expressing concern that they will have inadequate time to complete compliance arrangements.
Some are hopeful that the GINA regulations will include transition rules or other relief to allow more time to comply with the rules when finally issued.
Cynthia Marcotte Stamer can be reached at Cstamer@CTTLegal.com.
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