Overview
For decades there has been a debate in the United States about whether insurance companies should be able to use genetic information in insurance decisions. In 2008, Congress passed the Genetic Information Nondiscrimination Act (GINA). GINA prohibits covered employers and health insurers from discriminating based on genetic information. However, the law does not cover life, long-term care, and disability insurance companies. How these insurances can use genetic information is regulated at the state level.
Over the years, many state legislators have introduced bills to regulate how life, long-term care, and disability insurers can use genetic information. Several features of these bills makes them more or less protective against genetic discrimination. Below are five protective features that legislators should consider when regulating in this space.
1. Limit insurer use of genetic information
States laws range in how they regulate life, long-term care, and disability insurer use of genetic information. A few completely bar the use of genetic information by insurers, while others allow the use of genetic information if actuarially justified. An action is actuarially justified if the insurer has a difference in coverage that aligns with the difference in cost the insurer incurs. For example, a life insurer is actuarially justified in charging smokers higher premiums than non-smokers because smokers are more likely to cost life insurers more due to their higher risk mortality rates. State statutes use a variety of terms to describe allowing use with actuarial justification, including stating that insurers cannot undertake ‘unfair discrimination’ or cannot take an action ‘solely based on’ a genetic trait. These terms can be confusing to the lay public because they may misunderstand these terms as providing more protection than they actually do. Some state laws also bar insurers from utilizing specific genetic traits in underwriting, such as sickle-cell anemia or hemoglobin C.
Compare...
Florida Insurance Code | Massachusetts Code |
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§627.4301 “Health insurers, life insurers, and long-term care insurers may not require or solicit genetic information, use genetic test results, or consider a person’s decisions or actions relating to genetic testing in any manner for any insurance purpose.” (emphasis added) | 175 §120E “No insurer… shall practice unfair discrimination against persons because of the results of a genetic test or the provision of genetic information…” (emphasis added)
“For purposes of this section unfair discrimination means… practicing discrimination against persons unless such action is… based on sound actuarial principles” |
In this case, Florida law completely bars life, long-term care, and disability insurers from using genetic testing ‘in any manner’, but Massachusetts always insurers to use genetic information as long as there is no ‘unfair discrimination.’ Unfair discrimination is defined in a way that requires insurers must make decisions based on sound actuarial principles. The Florida law is more protective against genetic discrimination because it completely prevents insurers from using genetic information, whereas the Massachusetts law would still allow an insurer to use genetic information.
Alabama Insurance Code | Tennessee Insurance Code |
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§§27-5-13 Any disability insurance company is “prohibited from denying coverage to applicants because the applicant has been diagnosed as having sickle-cell anemia.” | §56-7-207 “No insurance company… shall refuse to issue or deliver any policy of life insurance… solely by reason of the fact that the person to be insured possesses sickle cell trait or hemoglobin C trait.” (emphasis added) |
Here, Alabama prevents disability insurance companies from using a diagnosis of sickle-cell anemia to deny coverage. In contrast, because the Tennessee law says that the insurance company cannot make a decision ‘solely by reason’ of sickle cell trait or hemoglobin C trait, insurers may be able to use those traits with actuarial justification.
2. Consider the power imbalance between insurers and individuals as it relates to consent provisions.
In many states, a primary protection related to life, long-term care, or disability insurer use of genetic information is a requirement that an insurer receive customer written consent before the insurer can collect genetic information. While consent is an important and laudatory principle, in the context of insurance, consent does not offer the greatest protection. This is due to the power differential between the insurer and the customer. If the customer denies consent because they do not want the insurer to access their genetic information, the insurer can decide not to insure the individual based on this denial of consent because the insurer is not required to provide insurance without viewing the genetic information.
California Civil Code | Minnesota Consumer Protection Code |
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§56.181 “…a direct-to-consumer genetic testing company shall not disclose a consumer’s genetic data to any entity that is responsible for administering or making decisions regarding health insurance, life insurance, long-term care insurance, disability insurance, or employment…” | §325F.995 “…a direct-to-consumer genetic testing company is prohibited from disclosing a consumer's genetic data without the consumer's written consent to: (1) any entity offering health insurance, life insurance, disability insurance, or long-term care insurance; or (2) any employer of the consumer.” (emphasis added) |
Compare the California state law that prevents a direct-to-consumer (DTC) genetic testing company from disclosing a customer’s genetic data to an insurer, to the Minnesota statute. In Minnesota, the DTC company can provide the genetic data if there is written consumer consent. There is likely nothing that is preventing the Minnesota insurer from requiring customers to sign such a consent.
Florida Insurance Code | Arizona Insurance Code |
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§627.4301 “Health insurers, life insurers, and long-term care insurers may not require or solicit genetic information, use genetic test results, or consider a person’s decisions or actions relating to genetic testing in any manner for any insurance purpose.” (emphasis added) | §20-448.02 “…a person shall not order or require the performance of a genetic test without first receiving the specific written informed consent of the subject of the test.” (emphasis added) |
While there is not widespread evidence that insurance companies are conducting their own genetic testing, some state laws regulate this potential action. The Florida code above prevents life, long-term care, and disability insurers from requiring or soliciting genetic information, which would broadly prevent an insurer from gathering genetic information in many ways. In contrast, the Arizona Insurance Code allows a company to require genetic testing, as long as there is written informed consent.
3. Make sure the definition of genetic test/information is sufficiently comprehensive.
How terms in a statute are defined can greatly impact the scope of legal protections. A notable example in this area is the definition of genetic test and/or genetic information. At the federal level, GINA defines genetic information broadly to include the individual’s genetic test results, their family members’ genetic test results, family medical history, and any participation in genetic services. Many state definitions of genetic test and genetic information are not as comprehensive as GINA’s as they relate to life, disability, and long-term care insurance law. Before passing legislation on genetic testing, state legislatures should assess their current definition of genetic testing and genetic information to avoid unintended consequences.
Federal GINA | Massachusetts Insurance Code |
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“The term ‘genetic test’ means an analysis of human DNA, RNA, chromosomes, proteins, or metabolites, that detects genotypes, mutations, or chromosomal changes.” | §108I “’Genetic test’, a test of human DNA, RNA, mitochondrial DNA, chromosomes or proteins for the purpose of identifying genes, inherited or acquired genetic abnormalities, or the presence or absence of inherited or acquired characteristics in genetic material, which are associated with a predisposition to disease, illness, impairment or other disease processes.” (emphasis added) |
Some states define genetic tests as only those that are known to be associated with an increased risk of disease or disorder. In contrast to GINA, which defines genetic test quite broadly, this Massachusetts code narrows the definition to items associated with disease or illness. But by default, this narrow definition could allow insurers to use variants of a gene whose significance is unknown, variants of a gene known to be associated with a decreased risk in developing a disease or disorder, or variants of a gene known to be associated with a trait, rather than a disease or illness.
Maine Insurance Code | Arizona Insurance Code |
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§2159-C "’Genetic information’ means the information concerning genes, gene products or inherited characteristics that may be obtained from an individual or family member.” (emphasis added) | §20-448.02 “’Genetic test’ means an analysis of an individual's DNA, gene products or chromosomes…” (emphasis added) |
Maine’s law notes that information about genetics could come from either an individual or a family member. Unlike in Maine, some states have limited genetic testing to include only the individual’s participation in genetic testing and genetic test results. In Arizona, genetic testing is defined only with reference to an individual’s material. By default, the statute may allow insurance companies to use family medical history, family members’ participation in genetic services, or family members’ genetic test results to infer the individual’s genetic makeup for purposes of creating or renewing an insurance policy.
Defining genetic information and testing broadly increases the protections against genetic discrimination and minimizes potential proxies that an insurer can use to discriminate in lieu of and individuals’ genetic test result.
4. Examine whether legislation addresses all possible ways insurers could utilize genetic information.
There are many different decisions that an insurer makes about an individual. For example, they can decide whether to insure them (called underwriting), decide whether to renew an existing policy, or decide how much to charge an individual for their insurance (premiums). Insurers could theoretically use genetic information to help them make decisions at each of these time points. State laws can limit when and how an insurer can use genetic information, but different laws focus on different insurer actions.
Florida Insurance Code | Tennessee Insurance Code |
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§627.4301 “In the absence of a diagnosis of a condition related to genetic information, health insurers, life insurers, and long-term care insurers authorized to transact insurance in this state may not cancel, limit, or deny coverage, or establish differentials in premium rates, based on such information.” “Health insurers, life insurers, and long-term care insurers may not require or solicit genetic information, use genetic test results, or consider a person’s decisions or actions relating to genetic testing in any manner for any insurance purpose.” (emphasis added) |
§56-7-2702 “A life insurance provider shall not cancel insurance coverage for an individual or a family member of an individual based solely on the individual's or family member's genetic information.” (emphasis added) |
The first part of the Florida law focuses on decisions around insuring or renewing insurance policies (canceling, limiting, or denying coverage) and around how much an insurer can charge (differentials in premium rates). However, the second part of the new law is even broader saying that the insurers cannot use genetic test results for “any insurance purpose”. In Tennessee, the law only talks about canceling existing insurance coverage. So, it is likely that in Tennessee, insurers could still use genetic information when considering an initial application or deciding what premiums to charge.
The more insurer actions that are included in a statute, the more protective against genetic discrimination the law will be.
5. Ensure that the statute accounts for an adequate variety of insurance companies.
The Genetic Information Nondiscrimination Act (GINA) is a federal act that prohibits health insurers and employers from determining individuals’ insurability, renewability, premiums, benefits, and conditions on the basis of genetic information. However, because the act only applies to health insurers and employers, it does not prevent life, long-term care, disability, and other insurers from using genetic data to differentiate individuals’ insurance policies. Before passing legislation on genetic testing, state legislatures should consider what type of insurance companies could, and should, be impacted by the new law.
Florida Insurance Code | Colorado Insurance Code |
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§627.4301 “In the absence of a diagnosis of a condition related to genetic information, health insurers, life insurers, and long-term care insurers authorized to transact insurance in this state may not cancel, limit, or deny coverage, or establish differentials in premium rates, based on such information.” (emphasis added) *Note that because of how health insurance is defined elsewhere in the state code, this includes disability insurers. |
§ 10-3-1104.7 “Any entity that receives information derived from genetic testing may not seek, use, or keep the information for any nontherapeutic purpose or for any underwriting purpose connected with the provision of group disability insurance or long-term care insurance coverage.” (emphasis added) |
Here, under the Florida statute, due to other state law provisions, health insurers include disability insurers. As such, this statute casts a broad net, forbidding a multitude of insurer types from using genetic information to differentiate between insurance policies. Other state statues only reference certain insurer types, but do not mention others. For example, the Colorado statute is narrowed to group disability and long-term care insurance.
Historically, banks, mortgage companies, and other insurers outside the health care industry have not used individuals’ genetic information to determine their insurability, premium rates, benefits, and conditions. But these businesses may be interested in using genetic information in the future, especially with new genetic technologies. State statutes that take initiative and account for all potentially interested insurer and industry types can prevent any undesired differentiation on the basis of genetic information in the future.