New Law Protects Against Genetic Information Discrimination

On Wednesday, May 21, President Bush signed into law the Genetic Information Nondiscrimination Act (GINA), which prohibits discrimination against individuals on the basis of their genetic information in both healthcare and employment. The new law is intended to ensure that people do not avoid genetic testing or counseling because they fear later health or employment discrimination.

GINA’s Impact on Group Health Plans
While current laws already prohibit employer group health plans from discriminating on the basis of health factors (including genetic information), GINA expands this protection by generally prohibiting group health plans and health insurers from:

• Requesting or requiring an individual to undergo a genetic test;
  
• Adjusting premium or contribution amounts on the basis of the genetic information of a plan participant or the participant’s family members;
  
• Requesting, requiring or purchasing genetic information before an individual’s enrollment in the plan; or
  
• Requesting, requiring or purchasing genetic information for underwriting purposes.
  
  

GINA will allow plan participants to receive injunctive relief under the Employee Retirement Income Security Act (ERISA) and have healthcare coverage reinstated back to the date of loss of coverage. GINA also authorizes the Department of Labor to assess civil penalties of up to $100 per day per individual for improper use of genetic information by a group health plan, from the time the failure occurs until it is corrected. If the Labor Department finds violations have not been corrected, GINA imposes a minimum penalty of $15,000 for material violations or $2,500 for de minimis violations. Penalties are limited to the lesser of 10% of the amount paid/incurred by the plan sponsor during the preceding taxable year for group health plans, or $500,000 for unintentional failures to meet the law's requirements not due to willful neglect.

GINA’s Impact on Employers
The employment discrimination provisions establish rules governing the confidentiality of genetic information collected by the employer. In particular, GINA expands Title VII of the Civil Rights Act of 1964 by imposing broad restrictions on the collection, use and disclosure of genetic information. Under the act, employers may not:

• Discharge, fail to hire, or otherwise discriminate against an individual in compensation or any terms, conditions or privileges of employment because of genetic information about the individual or a family member;
  
• Limit, segregate, or classify an employee in any way that would deprive him or her of any employment opportunities or otherwise adversely affect his or her status as an employee; or
  
• Request, require or purchase genetic information about an employee or a family member of the employee except in specific permitted circumstances.
  
  

An aggrieved person is entitled to seek compensatory damages under Title VII as well as punitive damages if he or she demonstrates that the employer acted maliciously or with reckless indifference to the individual’s rights. Damage awards are subject to Title VII’s limitations on compensatory and punitive damages.

The employment provisions of GINA become effective in November 2009 (18 months after the bill was signed into law), and the provisions pertaining to group health plans become effective in May 2009 (one year after the date of enactment).

For a copy of the full text of this new law, please click here. If you have any questions about GINA, please contact our office at 919-403-1986.

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May 30, 2008

Hill, Chesson & Woody Employee Benefit Services

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