Protective Features for Regulating Insurers

GINA prohibits health insurers and employers from determining individuals' insurability, renewability, premiums, benefits, and conditions on the basis of genetic information. Legislators seeking to expand GINA's protections to other areas should consider what type of insurance companies could, and should, be impacted by the new law.

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Florida law defines health insurance to include disability insurance. Therefore, the state casts a broad net, forbidding three insurer types, life, long-term care, and disability insurers, from using genetic information to discriminate. Other state statutes 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, or 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. For example, California passed CalGINA, which prevents genetic discrimination broadly, including in education, housing, and mortgage lending.

State laws vary in how they regulate life, long-term care, and disability insurer use of genetic information. A few completely bar insurer use, while some only bar insurers from utilizing specific genetic traits in underwriting, such as sickle-cell anemia or hemoglobin C. Other states allow insurer use if it actuarially justified. An action is actuarially justified if the insurer has a difference in coverage that aligns with the difference in cost that 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 and mortality rates. It is important to note that insurers already have an economic interest in making actuarially accurate decisions, so actuarial justification laws are unlikely to meaningfully change existing insurance practices.

State statutes use a variety of terms to describe allowing actuarially sound use, including stating that insurers cannot undertake "unfair discrimination" or cannot take an action "solely based on" a genetic trait. These terms may confuse the lay public who may misunderstand them as providing more protection than they actually do. For example, if someone thinks it would be unfair for a life insurer to deny them insurance based on genetic information, they may interpret a law protecting against "unfair discrimination" as barring use of genetic information. In reality, these "unfair discrimination" laws give deference to insurers to use genetic information in underwriting.

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In this case, Florida completely bars life, long-term care, and disability insurers from using genetic testing "in any manner," but Massachusetts allows insurers to use genetic information as long as there is no "unfair discrimination." The definition of unfair discrimination requires insurers to make decisions based on sound actuarial principles. Thus, Florida law is more protective against genetic discrimination because it completely prevents insurers from using genetic information, whereas Massachusetts law would still allow an insurer to use genetic information.

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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. This is because court cases have interpreted legislation including the term "solely by" as requiring actuarial justification.

Many states require that an insurer receive a customer's written consent before collecting genetic information for life, long-term care, or disability insurance. While consent is an important and laudatory principle, in the context of insurance, consent does not offer meaningful protection due to the power differential between the insurer and the customer. If the customer denies consent, the insurer can decide not to insure the individual because the insurer is not required to provide insurance.

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Compare the California 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 conditioning coverage on customers to sign such a consent.

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While there is not widespread evidence that insurance companies are conducting their own genetic testing, some state laws regulate this potential action. Florida law 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, Arizona law allows a company to require genetic testing, as long as there is written informed consent.

Statutory definitions can greatly impact the scope of legal protections. A notable example in this area is the definition of genetic test and/or genetic information. In the context of health insurance and employment, the federal law 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.

Before enacting legislation on genetic testing, state legislatures should assess their current definition of genetic testing and genetic information to avoid unintended consequences.

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Some states confine genetic tests to genetic screening for an increased risk of disease or disorder. In contrast to Alabama, which defines genetic test quite broadly, Massachusetts 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. For example, newer types of genetic tests, called polygenic indices, identify associations with traits, such as educational attainment or voter behavior.

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Maine law notes that information about genetics could come from either an individual or a family member. By contrast, some states limit genetic testing to the individual's genetic testing and genetic test results. Arizona defines genetic testing 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 both "genetic information" and "genetic 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.

Insurers make many different decisions about an individual. For example, they can decide whether to insure them (called underwriting), whether to renew an existing policy, or 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 stages. State laws can limit when and how an insurer uses genetic information, but different laws focus on different insurer actions.

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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 in Tennessee, insurers could probably 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 the law will be.