Labor & Employment Legal Update

New Regulations Affect Employer Health Plans and Wellness Programs

 By Justin L. Furrow

On October 7th, the Departments of Health and Human Services, Labor, and Treasury published interim final rules (the “Rules”) implementing Title I of the Genetic Information Nondiscrimination Act of 2008 (“GINA” or the “Act”).  Among other things, Title I of GINA generally prohibits group health plans from collecting genetic information and using it in enrollment or underwriting decisions.  For example, genetic information could not be used to decide who may participate in a group health plan or whether certain health conditions will be covered.  As drafted, the Rules will also likely have a dramatic impact on the way in which employer-sponsored wellness programs offer incentives.

The Rules maintain the statutory definition of genetic information, which includes information about an individual’s genetic tests, information about an individual’s request for or receipt of genetic services, and similar information about the individual’s family members.   The definition also includes “family medical history,” which encompasses information about the manifestation of a disease or disorder in an individual’s family members.  Additionally, GINA applies to genetic information about a fetus or embryo but does not prohibit collection of information about the age or sex of an individual.

The Rules clarify that group health plans may not request, require, or purchase genetic information for underwriting purposes or prior to or in connection with enrollment.  This prohibition is important to employer wellness programs because the Rules define “underwriting purposes” as “rules for, or determination of, eligibility…for benefits under the plan or coverage…(including changes in deductibles or other cost-sharing mechanisms in return for activities such as completing a health risk assessment or participating in a wellness program).”  This definition also includes “[t]he computation of premium or contribution amounts under the plan or coverage (including discounts, rebates, payments in kind, or other premium differential mechanisms in return for activities such as completing a health risk assessment or participating in a wellness program).”  Consequently, employer wellness programs that provide rewards for completing health risk assessments that request genetic information violate GINA. 

Moreover, a health risk assessment or wellness program that collects genetic information violates GINA even if rewards are not based on the outcome of the assessment (as previously allowed by the HIPAA nondiscrimination rules on wellness programs).

Although the Departments refused to permit wellness programs to collect genetic information, the Rules do provide that the incidental collection of genetic information does not violate GINA if the information is not used for underwriting purposes.  When it is reasonable, however, to anticipate receiving such health information in response to general questions about health history, the incidental exemption only applies if the collection explicitly states that genetic information should not be provided.
Practical Implications

Obviously, the Rules dramatically alter the manner in which group health plans and wellness programs may design and request health risk assessments.  Essentially, the Rules allow two alternatives: (a) a group health plan may collect genetic information through a health risk assessment so long as no rewards are provided and the request is not made prior to or in connection with enrollment, or (b) a group health plan may provide rewards for completion of a health risk assessment that does not collect genetic information.  Interestingly, and possibly in recognition of the negative effect these Rules may have on the participation of employers and employees in health risk assessments and wellness programs, the Departments expressly invite comments “on ways in which participation in [health risk assessments] can be encouraged while complying with [GINA].” 

Although the Rules will become effective December 7, 2009, the Departments did request comments concerning certain aspects of the Rules.  Persons desiring to submit comments are urged to do so promptly so that the comments can be given adequate consideration.  Once effective, the Rules will apply to all group health plans with plan years beginning on or after December 7, 2009. 

If you have any questions or concerns about these Rules, please contact a member of our Labor and Employment Group.