Prohibitions on Genetic Discrimination in Insurance and Employment*

By Mark A. Rothstein & Ronald L. Scott

The increasing amount of genetic information about individuals that is becoming available has raised concerns about genetic privacy and possible discrimination in health insurance, employment, and other areas. The surge in genetic information is largely the result of the Human Genome Project, a $3 billion, 15-year effort begun in 1990 to analyze the structure of human DNA and map and sequence the estimated 50,000 to 100,000 human genes. The Human Genome Project will assist in the prevention, diagnosis, and treatment of numerous illnesses with a genetic component, but the ability to predict the onset of future health conditions can also result in discrimination in both employment and insurance. A survey released in 1996 found that 22% of persons with genetic disorders believe they have been denied health insurance because of the disorders, and 13% believe they have been rejected for a job or terminated from a job because of a genetic condition.

Both federal and state laws offer some protection against genetic discrimination in employment and insurance. The federal Health Insurance Portability and Accountability Act of 1996 (HIPAA) applies to both self-insured health benefit plans and commercially written health insurance. Previously, self-insured health plans were essentially unregulated and commercially issued health insurance was regulated exclusively by the states. Among other things, HIPAA provides that genetic information may not be considered a "pre-existing condition" to deny or restrict coverage. HIPAA also prohibits charging higher rates to or decreasing the benefits of individuals based on genetic factors.

The other relevant federal law, the Americans with Disabilities Act (ADA), prohibits discrimination in employment on the basis of disability. An unresolved issue is whether a currently healthy person with a genetic predisposition to illness has a "disability" under the ADA and is thereby protected against employment discrimination. The Equal Employment Opportunity Commission has taken the position that discrimination based on genetic predisposition violates the ADA, but the issue has not been ruled on by any court. Because most people with health insurance obtain coverage through employment, the issue of employment discrimination affects access to both jobs and health insurance for individuals at genetic risk of disease.

Recent Texas legislation also may help prevent genetic discrimination by insurers and employers. A group health benefit plan which provides benefits for medical or surgical expenses incurred as a result of a health condition, accident or sickness may request that an applicant seeking health insurance submit to a genetic test in connection with the enrollment application only if the plan: (1) notifies the applicant that a genetic test is required; (2) discloses the proposed use of the test results to the applicant; and (3) obtains the applicant's written, informed consent to the genetic test. However, the group health benefit plan may not use genetic information to reject, deny, limit, cancel, refuse to renew, increase the premiums for, or otherwise adversely affect eligibility for coverage. Also, the plan may not discriminate against an applicant because the applicant has refused to submit to a genetic test. The law also provides that genetic information is confidential and privileged regardless of the source of the information.

Texans covered by individual rather than group health insurance do not have the same protections against genetic discrimination. Although all individual hospital, medical, and surgical policies are now "guaranteed renewable" at the option of the policyholder (may only be discontinued for failure to pay premiums, fraud or intentional misrepresentation, insurer ceasing to offer coverage, insured no longer residing, living, or working in area where insurer is authorized to offer coverage, or in accordance with applicable federal law) it appears that under Texas law an insurance company offering individual coverage may still use genetic information in deciding whether to offer coverage to an applicant. Applicants denied coverage by two or more insurance companies may be able to obtain coverage under the Health Insurance Risk Pool at rates approximately 50 percent higher than those charged by commercial carriers.

Also, Texas law now prohibits the use of genetic information for discrimination in employment and the issuance of occupational licenses. An employer commits an unlawful employment practice if the employer fails or refuses to hire, discharges, or otherwise discriminates against an individual with respect to compensation: (1) on the basis of genetic information concerning the individual; or (2) because of the refusal of the individual to submit to a genetic test. The law, however, only applies to genetic information derived from genetic testing, excluding from coverage information obtained from family health histories. It also does not prohibit employer access to genetic information.

Preventing genetic discrimination in employment, insurance, and other areas is more than simply a matter of fairness. Recent surveys indicate that most people will decline genetic tests offered by their physicians if the results may be obtained and used by their employer or insurer. Genetic privacy is therefore an essential part of using genetic knowledge for health promotion.

*Originally published in Houston Business Journal, February 6-12, 1998

02/19/98