'Genetic nondiscrimination' regs will restrict financial incentives for wellness programs

The Internal Revenue Service on October 1 released interim final regulations under the Genetic Information Nondiscrimination Act of 2008 (GINA, P.L. 110-233) which, effective for plan years beginning on or after December 7, will limit the ability of employers to provide financial incentives in connection with their wellness programs. Discounts, rebates, or other premium differentials cannot be provided for an employee's completion of a health risk assessment (HRA) or disease management program screening that requests family medical history or other genetic information.


Genetic information cannot be used for 'underwriting purposes'

GINA amended the Internal Revenue Code, the Employee Retirement Income Security Act, and the Public Health Services Act to prohibit group health plans and group health insurance issuers from discriminating on the basis of genetic information and from collecting such information.

The recently released final regulations address the provisions of GINA that prohibit group health plans, and issuers in the group health plan market, from:

- Increasing the group premium or contribution amount based on genetic information;
- Requesting or requiring an individual or family member to undergo a genetic test; and
- Requesting, requiring, or purchasing genetic information prior to or in connection with enrollment, or at any time for underwriting purposes.

GINA defines "underwriting purposes" very broadly to include determinations of eligibility, the computation of premiums or contribution amounts, and the application of preexisting condition exclusions. Despite public comments that requested a carve-out under the regulations to allow financial incentives in connection with wellness programs, the government felt hamstrung by the legislative history of GINA, which at one point during the legislative process contained an exception for wellness programs that was eliminated prior to passage of the act.

As a result, the regulations make clear that the term "underwriting purposes" includes changing a group health plan's deductibles, or providing discounts, rebates, or other premium differential mechanisms in return for participating in an HRA or other wellness program. Therefore, a wellness program that requests "genetic information" and provides a financial incentive for the employee's participation will violate the regulations and GINA, because the genetic information is being used for underwriting purposes. "Genetic information" is defined broadly as:

- Genetic tests – "Genetic tests" of the individual and family members;
- Family medical history – Manifestation of a disease or disorder in family members of the individual; and
- Genetic services – "Genetic services" requested or received by the individual or a family member.

"Genetic test" means an analysis of human DNA, RNA, chromosomes, proteins, or metabolites, if the analysis detects genotypes, mutations, or chromosomal changes (but does not include an analysis of proteins or metabolites that is directly related to a manifested disease, disorder, or pathological condition). An HIV test, complete blood count, cholesterol test, liver function test, or test for the presence of alcohol is not a genetic test. "Genetic service" means a genetic test, genetic counseling, or genetic education.


Over 30,000 arrangements likely to be affected

In connection with the rulemaking, group health plans and group health plan insurers told the government that they do not typically collect or use genetic information for underwriting purposes because pre-GINA laws and regulations already  prohibit them from discriminating against any individual based on factors related to health status, which include genetic information. The preambles to the regulations note, therefore, that the immediate impact of GINA and the new regulations is expected to be minimal on group health plans and insurers.

However, many employers who sponsor group health plans request family medical information on HRAs that are completed by employees before enrollment or provide financial incentives. The government anticipates that an estimated 30,000 group health plans have such associated wellness or disease management programs that provide financial incentives, and this will be the group most affected by the regulation. Employers will need to examine their programs to ensure that "genetic information" is not requested prior to enrollment and that financial incentives are not otherwise provided in connection with the disclosure of "genetic information."


HIPAA sanctions will apply

At the same time, the government published a proposed amendment to the Health Insurance Portability and Accountability Act of 1996 (HIPAA, P.L. 104-191) Privacy Rule to: (1) clarify that genetic information is health information under the HIPAA Privacy Rule; (2) prohibit the use or disclosure of protected health information (PHI) that is genetic information for underwriting purposes; and (3) revise the Notice of Privacy Practices. Unless the deadline is extended (as is being considered), once the proposed rule becomes final, health plans that use or disclose PHI for underwriting purposes will have only 60 days to modify their Notice of Privacy Practices to include a statement that they are prohibited from disclosing PHI that is genetic information.

This modification of the HIPAA Privacy Rule will bring teeth to the enforcement of GINA, since the use or disclosure of genetic information in violation of the HIPAA Privacy Rule can result in substantial fines. The proposed regulations are not yet effective. However, the preambles make clear that a group health plan that uses family medical history provided by an individual on a health risk assessment form to grant the individual a premium reduction would be using genetic information for underwriting purposes in violation of the HIPAA Privacy Rule.