On October 7, 2009, the Internal Revenue Service, U.S. Department of Labor and U.S. Department of Health and Human Services issued interim final regulations implementing the nondiscrimination rules under the Genetic Information Nondiscrimination Act of 2008 (GINA) and proposed regulations to update the HIPAA privacy rule. The regulations implement GINA's prohibition of the collection or use of genetic information for the purpose of determining enrollment eligibility or for underwriting purposes. The final regulations may change the operation of the open enrollment process of a group health plan, so immediate action may be necessary to comply with the regulations and avoid possible monetary penalties.

GINA affects group health plans and policies primarily in three ways. A group health plan or policy cannot:

• Increase or adjust the group premium (or the amount charged to an individual in the group) based on genetic information.
• Request or require an individual to undergo a genetic test.
• Request, require or purchase genetic information prior to enrollment, or at any time for underwriting purposes.

The regulations clarify several key terms under the statute, including "genetic information," "family member," "manifestation" and "underwriting purposes."

• Genetic information includes information about the genetic tests of an individual or his or her family, the manifestation of a disease or disorder in an individual's family member or a request for genetic services by individuals or family members, but not sex or age. It also includes similar tests on an unborn fetus or embryo legally held by an individual or family member.
• Family member includes any dependent and any first-, second-, third- or fourth-degree (i.e., great-great-grandparent, great-great-grandchildren and children of first cousins) relative of an employee or dependent. Individuals related by marriage or adoption and those sharing only one common parent (half-siblings, for example) are treated the same as relatives by consanguinity (those with a common ancestor) under the regulation.
• Manifestation generally means that a disease, disorder or pathological condition could be diagnosed by a health care professional and not based principally upon genetic information.
• Underwriting purposes means rules for the determination of eligibility for benefits or coverage (including changes in deductibles or other cost-sharing mechanisms in return for activities such as completing a health risk assessment or wellness program), computation of premium or contribution amounts under the plan or coverage, the application of any preexisting condition exclusion under the plan, and other activities related to the creation, renewal, or replacement of a contract for health insurance or benefits.

GINA generally prohibits a group health plan from requesting or requiring an individual or a family member to have genetic testing. However, in some cases, genetic tests may still be requested or required without violating the regulations. For example:

• The regulations permit a genetic test to be required for payment purposes in some cases. For example, the effectiveness of some medical therapies may be dependent on an individual's genetic makeup, and so the regulations permit a plan to require an individual to undergo genetic testing solely for the purpose of obtaining the minimum information necessary to determine whether a particular therapy is medically appropriate and therefore covered under the plan.
• The regulations do not limit a health care professional's ability to recommend a genetic test.
• A plan may request genetic information on a voluntary basis from participants who wish to participate in a research program that meets applicable federal and state or local laws and regulations.

The regulations also prohibit a group health plan from collecting genetic information for underwriting purposes and provide many other non-exclusive examples of practices that are permitted or not permitted under this rule. Examples provided in the regulations include the following:

• An insurer may increase the premium charged to a group based on the manifestation of a disease or condition of a covered individual, but not on genetic information. The insurer can't take into account in its underwriting the likelihood that other family members may be at increased risk to develop a disease or condition based on one family member's manifestation of such disease or condition.
• An insurer can also increase the group policy rates based on the plan's coverage of genetic tests or genetic services.
• A health plan that obtains genetic information prior to enrollment (and not for underwriting purposes) that is incidental to the collection of other information at enrollment, is not in violation of the regulations if it could not reasonably be anticipated that such information would be received by the plan or the forms indicate that genetic information should not be provided.
• A group health plan cannot condition rewards or benefits upon the completion of a health risk assessment (HRA) that requests genetic information (including family medical history). However, rewards/benefits can be offered for the completion of an HRA that does not request genetic information, and a separate HRA including genetic information can be requested by a group health plan but not tied to such rewards/benefits.
• Asking open-ended questions on HRAs or open enrollment documents that are tied to rewards/benefits or eligibility determinations, such as "Is there anything else we should know about your health?" or "Have you had any lab tests in the last 2 years?", are prohibited unless the forms clearly state that the individual should not provide any genetic information.
• Genetic information collected after enrollment will not be considered as used in connection with a later enrollment (e.g., the next open enrollment or a special enrollment event) if it is not in fact so utilized.

Finally, proposed regulations amending HIPAA clarify that genetic information is health information, and group health plans may not use or disclose it for underwriting purposes. While there are small plan exceptions under HIPAA, the privacy requirements in general group health plans of all sizes are subject to these interim final regulations. Non-federal government health plans are also subject to these rules. Finally, employers may wish to know that most of the prohibited practices described in the regulations also apply to health insurance policies issued in the individual market.

The interim final regulations regarding nondiscrimination are effective for individual policies sold on or after December 7, 2009, and group policies/plans for first plan year beginning after December 7, 2009, making these rules effective for 2010 calendar year health plans. The proposed changes to the HIPAA privacy rule are effective 180 days after the final regulations are published in the federal register. The excise taxes under the Internal Revenue Code that are already applicable to other HIPAA violations apply to group health plans that violate GINA. 

There are many nuances to the practices permitted and prohibited by the regulations, and several pitfalls to avoid. Group health plans will most likely need to revise their notice of privacy practices to indicate that genetic information will not be used or disclosed unless permitted under the regulations.

Contact Us
To determine whether your enrollment and other plan practices comply with these new regulations, contact the Leonard, Street and Deinard benefits attorney with whom you regularly work. You can learn more about our Compensation and Empolyee Benefits practice at www.leonard.com.