[Federal Register Volume 74, Number 193 (Wednesday, October 7, 2009)]
[Rules and Regulations]
[Pages 51664-51697]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-22504]



[[Page 51663]]

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Part II

Department of the Treasury



Internal Revenue Service



26 CFR Part 54



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Department of Labor



Employee Benefits Security Administration

29 CFR Part 2590



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Department of Health and Human Services



Centers for Medicare & Medicaid Services

45 CFR Parts 144, 146, and 148



Office of the Secretary

45 CFR Parts 160 and 164



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Prohibiting Discrimination Based on Genetic Information; Interim Final 
Rules; HIPAA Administrative Simplification; Genetic Information 
Nondiscrimination Act; Proposed Rules

  Federal Register / Vol. 74 , No. 193 / Wednesday, October 7, 2009 / 
Rules and Regulations  

[[Page 51664]]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 54

[TD 9464]
RIN 1545-BI03

DEPARTMENT OF LABOR

Employee Benefits Security Administration

29 CFR Part 2590

RIN 1210-AB27

DEPARTMENT OF HEALTH AND HUMAN SERVICES

Centers for Medicare & Medicaid Services

45 CFR Parts 144, 146, and 148

RIN 0938-AP37


Interim Final Rules Prohibiting Discrimination Based on Genetic 
Information in Health Insurance Coverage and Group Health Plans

AGENCY: Internal Revenue Service, Department of the Treasury; Employee 
Benefits Security Administration, Department of Labor; Centers for 
Medicare & Medicaid Services, Department of Health and Human Services.

ACTION: Interim final rules with request for comments.

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SUMMARY: This document contains interim final rules implementing 
sections 101 through 103 of the Genetic Information Nondiscrimination 
Act of 2008. These provisions prohibit discrimination based on genetic 
information in health insurance coverage and group health plans.

DATES: Effective Date: These interim final regulations are effective on 
December 7, 2009.
    Comment Date. Comments are due on or before January 5, 2010.
    Applicability Dates: Group market rules. These interim final 
regulations for the group market apply to group health plans and group 
health insurance issuers for plan years beginning on or after December 
7, 2009.
    Individual market rules. These interim final regulations for the 
individual market apply with respect to health insurance coverage 
offered, sold, issued, renewed, in effect, or operated in the 
individual market on or after December 7, 2009.

ADDRESSES: Written comments may be submitted to any of the addresses 
specified below. Any comment that is submitted to any Department will 
be shared with the other Departments. Please do not submit duplicates.
    Department of Labor. Comments to the Department of Labor, 
identified by RIN 1210-AB27, by one of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     E-mail: [email protected].
     Mail or Hand Delivery: Office of Health Plan Standards and 
Compliance Assistance, Employee Benefits Security Administration, Room 
N-5653, U.S. Department of Labor, 200 Constitution Avenue, NW., 
Washington, DC 20210, Attention: RIN 1210-AB27.
    Comments received by the Department of Labor will be posted without 
change to http://www.regulations.gov and http://www.dol.gov/ebsa, and 
available for public inspection at the Public Disclosure Room, N-1513, 
Employee Benefits Security Administration, 200 Constitution Avenue, 
NW., Washington, DC 20210, including any personal information provided.
    Department of Health and Human Services (HHS). Comments to HHS, 
identified by CMS-4137-IFC, by one of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Mail: Centers for Medicare & Medicaid Services, Department 
of Health and Human Services, Attention: CMS-4137-IFC, P.O. Box 8017, 
Baltimore, MD 21244-8010.
     Hand or courier delivery. Comments may be delivered to 
either 7500 Security Boulevard, Baltimore, MD 21244-1850 or Room 445-G, 
Hubert H. Humphrey Building, 200 Independence Avenue, SW., Washington, 
DC 20201. For delivery to Baltimore, please call telephone number (410) 
786-7195 in advance to schedule your arrival with one of our staff 
members. For delivery to Washington, because access to the interior of 
the HHH Building is not readily available to persons without Federal 
Government identification, commenters are encouraged to leave their 
comments in the CMS drop slots located in the main lobby of the 
building. A stamp-in clock is available for persons wishing to retain 
proof of filing by stamping in and retaining an extra copy of the 
comments being filed.
    All submissions submitted to HHS will be available for public 
inspection as they are received, generally beginning approximately 
three weeks after publication of a document, at the headquarters for 
the Centers for Medicare & Medicaid Services, 7500 Security Boulevard, 
Baltimore, MD 21244, Monday through Friday of each week from 8:30 a.m. 
to 4 p.m. To schedule an appointment to view public comments, phone 
(410) 786-7195.
    Internal Revenue Service. Comments to the IRS, identified by REG-
123829-08, by one of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Mail: CC:PA:LPD:PR (REG-123829-08), Room 5205, Internal 
Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, DC 
20044.
     Hand or courier delivery: Monday through Friday between 
the hours of 8 a.m. and 4 p.m. to: CC:PA:LPD:PR (REG-123829-08), 
Courier's Desk, Internal Revenue Service, 1111 Constitution Avenue, 
NW., Washington DC 20224.
    All submissions to the IRS will be open to public inspection and 
copying in room 1621, 1111 Constitution Avenue, NW., Washington, DC 
from 9 a.m. to 4 p.m.

FOR FURTHER INFORMATION CONTACT: Amy Turner, Employee Benefits Security 
Administration, Department of Labor, at (202) 693-8335. Russ 
Weinheimer, Internal Revenue Service, Department of the Treasury, at 
(202) 622-6080. Adam Shaw, Centers for Medicare & Medicaid Services, 
Department of Health and Human Services, at (877) 267-2323, extension 
61091.
    Customer Service Information: Individuals interested in obtaining 
information from the Department of Labor concerning employment-based 
health coverage laws, including the nondiscrimination protections, may 
call the EBSA Toll-Free Hotline at 1-866-444-EBSA (3272) or visit the 
Department of Labor's Web site (http://www.dol.gov/ebsa). In addition, 
individuals may request a copy of CMS's publication entitled 
``Protecting Your Health Insurance Coverage'' by calling 1-800-633-
4227.

SUPPLEMENTARY INFORMATION:

I. Background

    The Genetic Information Nondiscrimination Act of 2008 (GINA), 
Public Law 110-233, was enacted on May 21, 2008. Title I of GINA 
amended the Employee Retirement Income Security Act of 1974 (ERISA), 
the Public Health Service Act (PHS Act), the Internal Revenue Code of 
1986 (Code), and the Social Security Act (SSA) to prohibit 
discrimination in health coverage based on genetic information. GINA 
builds on existing protections

[[Page 51665]]

added by titles I and IV of the Health Insurance Portability and 
Accountability Act of 1996 (HIPAA).\1\ Specifically, the HIPAA 
portability provisions already prohibit a group health plan or group 
health insurance issuer from imposing a preexisting condition exclusion 
based solely on genetic information. See the 2004 final HIPAA 
portability regulations, published in the Federal Register on December 
30, 2004 (69 FR 78720). In addition, the HIPAA nondiscrimination 
provisions already prohibit a group health plan or group health 
insurance issuer from discriminating against an individual in 
eligibility, benefits, or premiums based on genetic information (and 
other health factors) of the individual or a dependent of the 
individual. See the 2006 final HIPAA nondiscrimination regulations, 
published in the Federal Register on December 13, 2006 (71 FR 75014).
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    \1\ These HIPAA provisions generally apply to group health plans 
and health insurance coverage in the group and individual markets.
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    Sections 101 through 104 of Title I of GINA prohibit group health 
plans, health insurance issuers in the group and individual markets,\2\ 
and issuers of Medicare supplemental (Medigap) policies from 
discriminating based on genetic information, and from collecting such 
information.\3\ Section 105 of Title I adds section 1180 of the SSA to 
require HHS to revise the HIPAA privacy regulations to clarify that 
genetic information is health information under the rule and to 
prohibit the use or disclosure of genetic information for underwriting 
purposes.\4\ Title II of GINA prohibits discrimination in employment 
based on genetic information, and limits the acquisition and disclosure 
by employers and other entities covered by GINA Title II of such 
information.\5\ These interim final regulations only interpret Sections 
101 through 103 of Title I of GINA, which added provisions to Subtitle 
K of the Code, Part 7 of Subtitle B of Title I of ERISA, and Title 
XXVII of the PHS Act.\6\ References to GINA in the remainder of this 
preamble refer to the group market provisions of sections 101 through 
103 of GINA, unless the context clearly indicates otherwise.
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    \2\ Rules on GINA's application in the individual market are 
solely within the jurisdiction of the Centers for Medicare & 
Medicaid Services at the Department of Health and Human Services and 
are discussed later in this preamble.
    \3\ This regulation does not address the application of GINA to 
Medigap issuers, which are subject to provisions in section 1882 of 
the SSA that are implemented by the Centers for Medicare & Medicaid 
Services (CMS), and incorporate by reference certain provisions in a 
model regulation of the National Association of Insurance 
Commissioners (NAIC). The model regulation adopted by the NAIC on 
September 24, 2008 was published by CMS in the Federal Register on 
April 24, 2009 at 74 FR 18808. This regulation also does not address 
the additional enforcement authority given to the Secretaries of 
Labor and HHS, relating to the use of genetic information, which 
will be addressed in future regulatory guidance.
    \4\ The HIPAA privacy provisions are administered by the Office 
for Civil Rights within HHS, and will be the subject of a separate 
rulemaking.
    \5\ Title II of GINA is under the jurisdiction of the Equal 
Employment Opportunity Commission, which issued a notice of proposed 
rulemaking on March 2, 2009, 74 FR 9056.
    \6\ Compliance with GINA sections 101 through 103 is not 
determinative of compliance with any other provision of GINA or any 
other State or Federal law, including the Americans with 
Disabilities Act.
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    On October 10, 2008, the Departments published in the Federal 
Register (73 FR 60208) a request for information (RFI) soliciting 
comments on the requirements of sections 101 through 104 of GINA. In 
addition, the Departments consulted with and obtained technical 
guidance from the scientific community, including the National Human 
Genome Research Institute within the National Institutes of Health and 
the Office for Human Research Protections, both within HHS. The 
Departments also coordinated with the Equal Employment Opportunity 
Commission (EEOC), which has responsibility for Title II of GINA, and 
the Office for Civil Rights within HHS, which has responsibility for 
section 105 of GINA.
    After consideration of the comments received in response to the RFI 
and based on the consultations with other government agencies, the 
Departments are publishing these interim final regulations. For the 
group market, these regulations become applicable to plans and issuers 
on the first day of the plan year beginning on or after December 7, 
2009. For the individual market, these regulations become applicable 
with respect to health insurance coverage offered, sold, issued, 
renewed, in effect, or operated in the individual market on or after 
December 7, 2009.

II. Overview of the Regulations

A. Group Market

    While GINA does not mandate any specific benefits for health care 
services related to genetic tests, diseases, conditions, or genetic 
services, GINA establishes rules that generally prohibit a group health 
plan and a health insurance issuer in the group market from:
     Increasing the group premium or contribution amounts based 
on genetic information;
     Requesting or requiring an individual or family member to 
undergo a genetic test; and
     Requesting, requiring or purchasing genetic information 
prior to or in connection with enrollment, or at any time for 
underwriting purposes.

    These three general prohibitions are subject to rules of 
construction or exceptions included in the statute which are discussed 
in further detail later in this preamble.
1. Conforming Changes to Existing Regulations
    Sections 9801 and 9802 of the Code, 701 and 702 of ERISA, and 2701 
and 2702 of the PHS Act, as originally added by HIPAA, included 
requirements pertaining to genetic information but did not define the 
term. The 2004 final HIPAA portability regulations included a 
definition of genetic information.
    GINA contains a statutory definition of genetic information that 
differs from the definition in the 2004 final HIPAA portability 
regulations. These interim final regulations revise the existing 
regulations' definition of genetic information at 26 CFR 54.9801-2, 29 
CFR 2590.701-2, and 45 CFR 144.103, to conform to the new statutory 
definition.
    Sections 9802 of the Code, 702 of ERISA, and 2702 of the PHS Act, 
and the 2006 final HIPAA nondiscrimination regulations prohibit 
discrimination based on a health factor. GINA retained the prohibition 
against increasing an individual's premium or contribution amounts 
based on genetic information, and added a new provision to prevent 
plans and issuers from adjusting premium or contribution rates at the 
group level based on genetic information of one or more individuals in 
the group. Therefore, these interim final regulations amend the 2006 
regulations to add clarifying cross-references. See 26 CFR 54.9802-
1(c)(2)(i) and (iii), 29 CFR 2590.702(c)(2)(i) and (iii), and 45 CFR 
146.121(c)(2)(i) and (iii).
2. Definitions
    Paragraph (a) of these interim final regulations \7\ provides most 
of the definitions used in GINA.\8\ Some of these definitions repeat 
the statutory language, while others include regulatory clarifications.
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    \7\ Because substantively similar regulation text is published 
separately by the three Departments, and the section numbers will 
all be different, the preamble refers only to the paragraph 
designations within those sections.
    \8\ The same definitions apply to the individual market 
regulations under GINA, which are discussed later in this preamble, 
to the extent that they are not inconsistent with respect to health 
insurance coverage offered, sold, issued, renewed, in effect, or 
operated in the individual market.

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a. Collect
    The interim final regulations add the defined term ``collect.'' 
While ``collect'' was not defined in the statute, this term was added 
to paraphrase the longer phrase ``request, require or purchase.'' Thus, 
under the interim final regulations, ``collect'' means, with respect to 
information, to request, require, or purchase such information.
b. Family Member
    GINA adds a definition of family member to sections 9832 of the 
Code, 733 of ERISA, and 2791 of the PHS Act. The definition of family 
member determines the application of GINA in two ways. First, the 
definition of genetic information for an individual includes 
information about the manifestation of a disease or disorder in family 
members of the individual. Also, a plan or issuer generally may not 
request or require an individual or family member of the individual to 
undergo a genetic test.
    The statute defines a family member with respect to any individual 
as a dependent of such individual (as such term is used for purposes of 
sections 9801(f)(2) of the Code, 701(f)(2) of ERISA, and 2701(f)(2) of 
the PHS Act (the dependent special enrollment rules)),\9\ and any other 
individual that is a first-, second-, third-, or fourth-degree relative 
of the individual or of the dependent of the individual. The 
legislative history suggests that the term ``family member'' be broadly 
construed: ``In general, it is intended that the term `family member' 
be interpreted broadly so as to provide the maximum protection against 
discrimination.'' House Report 110-28, Part 2 at 27.
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    \9\ This definition of the term ``dependent'' is solely for 
purposes of interpreting sections 101 through 103 of GINA, and is 
not relevant to interpreting the term under Title II of GINA, which 
is under the jurisdiction of the EEOC.
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    Sections 9801(f)(2) of the Code, 701(f)(2) of ERISA, and 2701(f)(2) 
of the PHS Act provide special enrollment rights to certain dependents 
that are eligible for coverage under a group health plan due to such 
family events as birth, adoption, or marriage. The statutory provisions 
of neither HIPAA nor GINA define dependent, but the term is defined in 
the 2004 final HIPAA portability regulations as any individual who is 
or may become eligible for coverage under the terms of a group health 
plan because of a relationship to a participant. This makes clear that 
it is necessary to consult the plan document and other applicable law 
to determine dependent status for purposes of GINA.
    In determining who is a first-, second-, third-, or fourth-degree 
relation of an individual, the interim final regulations treat 
relatives by affinity (such as by marriage or adoption) the same as 
relatives by consanguinity (relatives who share a common biological 
ancestor, or blood relatives). The definition also treats relatives who 
are not full blood relatives (such as half siblings) the same as full 
blood relatives. In addition, the interim final regulations provide 
non-exhaustive lists of individuals who are first-, second-, third-, or 
fourth-degree relatives. The Departments invite public comments on this 
definition.
c. Genetic Information
    The interim final regulations contain a definition of genetic 
information that restates and reorganizes the statutory provisions. 
Genetic information is defined, with respect to an individual, as 
information about the individual's genetic tests or the genetic tests 
of family members, the manifestation of a disease or disorder in family 
members of such individual (that is, family medical history), or any 
request of or receipt by the individual or family members of genetic 
services. The definition further clarifies that genetic information 
does not include information about the sex or age of any individual. It 
also clarifies how GINA applies to genetic information about a fetus or 
embryo. As previously noted, this definition is a change from the 
definition of genetic information that applied under the 2004 final 
HIPAA portability regulations.
d. Genetic Services
    An individual's genetic information includes any request for or 
receipt of genetic services by such individual, or a family member. 
These interim final regulations follow the statutory definition. 
``Genetic services'' means a genetic test, genetic counseling, or 
genetic education.
e. Genetic Test
    GINA adds a definition of genetic test to sections 9832 of the 
Code, 733 of ERISA, and 2791 of the PHS Act.\10\ These interim final 
regulations repeat the statutory language, which provides that a 
genetic test means an analysis of human DNA, RNA, chromosomes, 
proteins, or metabolites, if it detects genotypes, mutations, or 
chromosomal changes.
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    \10\ This definition of the term ``genetic test'' is solely for 
purposes of interpreting Title I of GINA, and is not relevant to 
interpreting the term under Title II of GINA, which has a different 
statutory definition.
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    The interim final regulations also follow the statutory language 
providing that a genetic test does not include an analysis of proteins 
or metabolites that does not detect genotypes, mutations, or 
chromosomal changes, or an analysis of proteins or metabolites that is 
directly related to a manifested disease, disorder, or pathological 
condition that could be reasonably detected by a health care 
professional with appropriate training and expertise in the field of 
medicine involved.
    The interim final regulations include examples of certain tests 
that currently are regarded as genetic or non-genetic tests, as the 
case may be, based on research including consultations with 
representatives from the scientific community. However, due to rapidly 
evolving scientific knowledge, it is not an exhaustive list.
f. Manifestation or Manifested
    The concept of manifestation of a disease arises in three contexts. 
First, a plan or issuer may increase the premium or contribution amount 
for a group health plan based on the manifestation of a disease or 
disorder of an individual who is enrolled in the plan. Second, the 
definition of genetic information for an individual includes 
information about the manifestation of a disease or disorder in family 
members of such individual. Finally, the definition of genetic test 
excludes an analysis of proteins or metabolites that is directly 
related to a manifested disease, disorder, or pathological condition 
that could be reasonably detected by a health care professional with 
appropriate training and expertise in the field of medicine involved.
    The interim final regulations add a definition of manifestation or 
manifested. A disease, disorder, or pathological condition is 
manifested when an individual has been or could reasonably be diagnosed 
by a health care professional with appropriate training and expertise 
in the field of medicine involved. However, the definition further 
provides that a disease, disorder, or pathological condition is not 
manifested if a diagnosis is based principally on genetic information.
g. Underwriting Purposes
    GINA includes a definition of underwriting purposes. This term is 
discussed later in this preamble, in connection with the discussion of 
the prohibition on collecting genetic information.
3. Prohibition on Adjusting Group Rates
    GINA and these interim final regulations expand the HIPAA 
prohibitions against discrimination

[[Page 51667]]

based on health factors, by prohibiting group health plans and health 
insurance issuers offering health coverage in connection with a group 
health plan from adjusting premium or contribution amounts for a group 
health plan or group of similarly situated individuals on the basis of 
genetic information. This is a change from prior law, which allowed 
plans and issuers to adjust premium or contribution amounts for the 
group health plan or a group of similarly situated individuals (but not 
for individuals within the group) based on genetic information, as well 
as other health factors. This prohibition against discrimination is 
distinct from the prohibition on requesting or requiring an individual 
to undergo a genetic test and the prohibition on collecting genetic 
information. Therefore, even when a plan or issuer has lawfully 
obtained genetic test results or other genetic information (for 
example, an acquisition that took place prior to GINA's effective 
date), the plan or issuer is still prohibited--under GINA and paragraph 
(b) of these interim final regulations--from using that information to 
discriminate.
    GINA and these interim final regulations also provide that the 
prohibition on adjusting premiums or contributions based on genetic 
information does not limit the ability of a plan or issuer to increase 
the premium or contribution amount for a group health plan based on the 
manifestation of a disease or disorder of an individual enrolled in the 
plan. However, a plan or issuer may not use the manifested disease or 
disorder of one individual as genetic information about other group 
members to further increase the premium or contribution amount. 
Moreover, the prohibitions on adjusting premium or contribution amounts 
based on genetic information do not prohibit a plan or issuer from 
including costs associated with providing benefits for covered genetic 
tests or genetic services within the costs of providing other benefits 
in determining premiums or contribution amounts. In particular, a plan 
or issuer is not required to reduce the aggregate costs of providing 
health benefits for the year by those costs relating to benefits for 
genetic tests and services when adjusting group rates. These interim 
final regulations also make conforming changes to the existing HIPAA 
nondiscrimination regulations regarding the ability to adjust premium 
or contribution amounts based on a health factor.
4. Limitation on Requesting or Requiring Genetic Testing
    GINA generally prohibits plans and issuers from requesting or 
requiring individuals or their family members to undergo a genetic 
test. There are three exceptions to this prohibition, for certain 
health care professionals, for determinations regarding payment, and 
for research.
    The first exception allows a health care professional who is 
providing health care services to an individual to request that the 
individual undergo a genetic test. The health care professional must 
actually be providing health care services to the individual for the 
exception to apply. Thus, for example, the performance of claims review 
by a health care professional would never be considered providing 
health care services to an individual. The term ``health care 
professional'' is not limited to physicians.
    The second exception allows a plan or issuer to obtain and use the 
results of a genetic test to make a determination regarding payment. 
For this purpose, payment is defined by reference to 45 CFR 164.501 of 
the HIPAA privacy regulations. However, plans and issuers are only 
permitted to request the minimum amount of information necessary to 
make this determination. These interim final regulations incorporate 
the standard set forth at 45 CFR 164.502(b) of the HIPAA privacy 
regulations to determine the minimum amount of information necessary.
    In some cases, the appropriateness of certain courses of treatment 
for a patient depends on the patient's genetic makeup. A plan or issuer 
is permitted to condition payment for an item or service based on 
medical appropriateness that depends on an individual's genetic makeup. 
Under these narrow circumstances, a plan or issuer may condition 
payment on the outcome of a genetic test, and may refuse payment for 
the item or service if the individual does not undergo the genetic 
test. Any information received by the plan to make a determination 
regarding payment, including the results of a genetic test, must be 
used in accordance with these interim final regulations and the 2006 
final HIPAA nondiscrimination regulations.
    Under the third exception relating to the limitation on requesting 
or requiring genetic testing, a group health plan or group health 
insurance issuer is permitted to request, but not require, that a 
participant or beneficiary undergo a genetic test \11\ if all of the 
following conditions of the research exception are satisfied:
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    \11\ Comments indicated that at least one issuer is engaging in 
a long-term research study involving genetic testing. Others may be 
planning similar research. 
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     The request must be made pursuant to research that 
complies with 45 CFR Part 46 (or equivalent Federal regulations) and 
any applicable State or local law or regulations for the protection of 
human subjects in research. Moreover, to comply with the informed 
consent requirements of 45 CFR 46.116(a)(8), an investigator seeking 
the informed consent of a human subject must provide the subject with a 
statement that participation in the research is voluntary, refusal to 
participate will involve no penalty or loss of benefits to which the 
subject is otherwise entitled, and the subject may discontinue 
participation at any time without penalty or loss of benefits to which 
the subject is entitled, except in limited circumstances in which an 
institutional review board has approved a waiver or alteration of this 
requirement under the requirements of 45 CFR 46.116(c) or (d). For 
research in which the investigator provides subjects with the statement 
required under 45 CFR 46.116(a)(8) when seeking their informed consent, 
no additional disclosures are required for purposes of the GINA 
research exception.
     The plan or issuer must make the request in writing and 
must clearly indicate to each participant or beneficiary (or in the 
case of a minor child, to the legal guardian of such beneficiary) to 
whom the request is made that compliance with the request is voluntary 
and noncompliance will have no effect on eligibility for benefits or 
premium or contribution amounts.
     None of the genetic information collected or acquired as a 
result of the research may be used for underwriting purposes.
     The plan or issuer must complete a copy of the ``Notice of 
Research Exception under the Genetic Information Nondiscrimination 
Act'' (the Notice) and provide it to the address specified in its 
instructions. The Notice and instructions are available on the 
Department of Labor's Web site (http://www.dol.gov/ebsa).
5. Prohibition on Collection of Genetic Information
    Paragraph (d) of these interim final regulations describes the 
statutory prohibitions against plans or issuers collecting genetic 
information, either for underwriting purposes or prior to or in 
connection with enrollment; sets forth the statutory definition of 
underwriting purposes; and clarifies that, if an

[[Page 51668]]

individual seeks a benefit under a plan or coverage, the plan or 
coverage may limit or exclude the benefit based on whether the benefit 
is medically appropriate (and a determination of whether the benefit is 
medically appropriate is not within the meaning of underwriting 
purposes).
    Underwriting purposes is defined under GINA and in these interim 
final regulations as including, with respect to group health plan 
coverage, rules for and determinations of eligibility (including 
enrollment and continued eligibility), computation of premium or 
contribution amounts, and application of preexisting condition 
exclusions. Under GINA, the definition of underwriting is broader than 
merely activities relating to rating and pricing a group policy. These 
interim final regulations clarify that underwriting purposes includes 
changing deductibles or other cost-sharing mechanisms, or providing 
discounts, rebates, payments in kind, or other premium differential 
mechanisms in return for activities such as completing a health risk 
assessment (HRA) or participating in a wellness program.
    GINA and paragraph (d) of the interim final regulations provide 
that plans and issuers are only prohibited from collecting genetic 
information for underwriting purposes or prior to or in connection with 
enrollment. Where an individual seeks a benefit under the plan, 
requesting family medical history or other genetic information to make 
a determination whether the benefit is medically appropriate for 
purposes of payment is neither for underwriting purposes nor prior to 
or in connection with enrollment. Therefore, although the statutory 
payment exception only applies to requests for individuals to undergo 
genetic tests, these interim final regulations provide it is 
permissible for a plan or issuer to request the minimum amount of 
genetic information necessary to make determinations regarding payment. 
Specifically, these interim final regulations provide that, if an 
individual seeks a benefit under a plan or coverage, the plan or 
coverage may limit or exclude the benefit based on whether the benefit 
is medically appropriate, and the determination of whether the benefit 
is medically appropriate is not within the meaning of underwriting 
purposes. However, a plan or issuer is permitted to request only the 
minimum amount of information necessary to determine medical 
appropriateness.
    These interim final regulations provide clarifications of the 
statutory prohibition against a plan or issuer collecting genetic 
information prior to or in connection with enrollment. Under the 
interim final regulations, a collection of genetic information with 
respect to an individual is considered prior to enrollment if it is 
before the individual's effective date of coverage under the plan or 
health insurance coverage. The determination of whether a plan or 
issuer is collecting information before the individual's effective date 
of coverage is made at the time of collection. Providing that the 
determination is made at the time of collection means that if a plan or 
issuer collects genetic information with respect to an individual in 
circumstances that otherwise would not render the collection 
impermissible and at that time it is not being collected in connection 
with a future enrollment, the fact that a future enrollment may occur 
does not mean, for purposes of this rule, that the genetic information 
was collected before the enrollment. Thus, for example, if a plan 
collected genetic information with respect to an individual after 
initial enrollment (and not for underwriting purposes), and the 
individual later dropped coverage but then still later reenrolled in 
the plan, the collection of genetic information after the initial 
enrollment would not be considered prior to the reenrollment.
    Similarly, if a plan affirmatively requires individuals to reenroll 
on an annual basis or allows individuals to change their enrollment, a 
collection of genetic information made after a current enrollment will 
not be considered made prior to a subsequent enrollment unless the 
collection of information is or will be used to affect that subsequent 
enrollment. Moreover, if genetic information is collected permissibly 
under one plan, the information is transferred to a second plan in 
connection with a merger or acquisition after this collection, and 
individuals covered under the first plan are enrolling for the first 
time in the second plan, the transfer of information to the second plan 
will not be considered a collection prior to the effective date of 
coverage under the second plan if the collection of information does 
not affect the enrollment status of individuals enrolling in the second 
plan.
    These interim final regulations include the statutory exception (to 
the prohibition against collections of genetic information prior to or 
in connection with enrollment) for genetic information that is 
collected incidental to the collection of other information and is not 
used for underwriting purposes. Some commenters suggested that some 
questions that are typically included in some HRAs and similar 
documents could easily result in an individual providing genetic 
information, even if the question does not mention genetic tests or 
family medical history explicitly. An example given was, ``Have you had 
any laboratory tests in the past 2 years?'' These commenters suggested 
plans and issuers should be required to inform individuals that they 
should not reveal genetic information.
    The interim final regulations clarify that if it is reasonable to 
anticipate that health information will be received as part of the 
collection of information, the incidental collection exception does not 
apply unless the collection explicitly states that genetic information 
should not be provided. If, in connection with a collection of 
information, it is reasonable to anticipate that health information 
will be received and the collection explicitly states that genetic 
information should not be provided, any genetic information provided 
will be considered within the incidental exception, as long as it is 
not used for underwriting purposes.
    In response to the RFI, a number of comments were received 
concerning the application of the prohibition on requesting genetic 
information for underwriting purposes to plans and issuers that reward 
individuals for completing HRAs. Of particular concern are wellness 
programs including HRAs that request information about an individual's 
family medical history. Another concern is the application of the 
prohibition on requesting genetic information for underwriting purposes 
to screening processes for disease management programs that use genetic 
tests or family medical histories to identify individuals that can 
benefit from the program.
    GINA prohibits collecting genetic information for underwriting 
purposes. As described earlier, underwriting purposes is defined 
broadly to include rules for eligibility for benefits and the 
computation of premium or contributions amounts, and not merely 
activities relating to rating and pricing a group policy. Moreover, 
GINA defines genetic information as including family medical history. 
Consequently, wellness programs that provide rewards for completing 
HRAs that request genetic information, including family medical 
history, violate the prohibition against requesting genetic information 
for underwriting purposes. This is the result even if rewards are not 
based on the outcome of the assessment, which otherwise would not 
violate the 2006 final HIPAA nondiscrimination rules regarding wellness 
programs.
    Some comments received in response to the RFI urged strongly that a

[[Page 51669]]

regulatory exception should allow wellness programs to provide rewards 
for completing HRAs that request such information, notwithstanding the 
statutory prohibition on collecting genetic information.\12\ Other 
comments suggested equally strongly that the regulations clarify that 
wellness programs may not collect such information as a condition for 
rewards. These interim final regulations do not provide an exception 
from underwriting for rewards provided by wellness programs, regardless 
of the amount of the reward. Examples generally illustrate that any 
reward given for the completion of an HRA that solicits information 
about the individual's family medical history violates the requirements 
of paragraph (d).
---------------------------------------------------------------------------

    \12\ Earlier bills (for example, S.358, 110th Cong. (as reported 
by S. Comm. on Health, Education, Labor, and Pensions) March 29, 
2007; H.R. 493, 110th Cong. (as reported by H. Comm. on Energy and 
Commerce) March 29, 2007) included exceptions for wellness programs 
in both the Title I health coverage provisions and the Title II 
employment provisions. As enacted, GINA only includes an exception 
for wellness programs in the Title II employment provisions.
---------------------------------------------------------------------------

    However, plans and issuers can collect genetic information through 
HRAs under GINA in certain circumstances. A plan or issuer can collect 
genetic information through an HRA as long as no rewards are provided 
(and if the request is not made prior to or in connection with 
enrollment). A plan or issuer can also provide rewards for completing 
an HRA as long as the HRA does not collect genetic information. Several 
examples are provided in these interim final regulations to illustrate 
these points. In one example, a plan administers two distinct HRAs, one 
that does not request genetic information and one that does. A reward 
is provided for completing the HRA that does not solicit genetic 
information; the instructions for the other HRA make clear that 
completion of the HRA is wholly voluntary and will not affect the 
reward given for completion of the first HRA. The example concludes 
that neither HRA violates the rules against collecting information for 
underwriting purposes or prior to or in connection with enrollment. 
Finally, another example illustrates the application of the exception 
for information obtained incidentally in the context of the acquisition 
of one issuer by another. The Departments invite comment on ways in 
which participation in HRAs can be encouraged while complying with the 
statutory prohibition on using genetic information for underwriting 
purposes.
6. Medical Appropriateness
    Paragraph (e) of these interim final regulations provides examples 
illustrating how medical appropriateness is determined, in connection 
with both the payment exception under paragraph (c) and the prohibition 
against collecting genetic information for underwriting purposes under 
paragraph (d). Examples illustrate the minimum amount of genetic 
information necessary to determine payment, the restriction of benefits 
to medically appropriate treatment, and the application of the medical 
appropriateness rules to the use of genetic information to determine 
eligibility for a disease management program.
7. Special Rules Related to Very Small Group Health Plans
    Generally, the provisions of HIPAA titles I and IV, as amended, do 
not apply to a group health plan for a plan year if the plan is a very 
small group health plan; that is, on the first day of the plan year, 
the group health plan has fewer than 2 participants who are current 
employees. GINA and these interim final regulations provide that this 
exception for very small group health plans is not available for the 
genetic information provisions in Subtitle K of the Code, Part 7 of 
Subtitle B of Title I of ERISA, and Title XXVII of the PHS Act.
8. Treatment of Non-Federal Governmental Plans
    Section 2721(b)(2) of the PHS Act permits the sponsor of a self-
funded non-Federal governmental plan as defined in 45 CFR 144.103 to 
elect to exempt the plan from most of the requirements of Title XXVII 
of the PHS Act. This is referred to herein as the ``opt-out election.'' 
However, section 2721(b)(2)(C)(ii) states that no opt-out election is 
available with respect to the requirements for certification and 
disclosure of creditable coverage. The PHS Act regulations at 45 CFR 
146.180 implement the foregoing opt-out rules under section 2721.
    Section 102(c) of GINA added a second limitation on the opt-out 
rights of a self-funded non-Federal governmental plan sponsor. Section 
2721(b)(2)(D) of the PHS Act precludes any exemption election by a 
self-funded non-Federal governmental plan sponsor from GINA's 
requirements. The Centers for Medicare & Medicaid Services (CMS) 
amended 45 CFR 146.180(h) accordingly.
    CMS made certain additional conforming changes to other provisions 
of 45 CFR 146.180. In particular, CMS deleted the reference in 45 CFR 
146.180(h) to CMS enforcement under 45 CFR 146.180(k) because paragraph 
(k) makes clear that CMS enforces all requirements of part 146 that 
apply to non-Federal governmental plans. CMS also revised the last 
sentence of 45 CFR 146.180(k), which refers to the imposition of a 
civil money penalty, by replacing ``under Sec.  150.305'' with ``under 
subpart C of part 150'' because subpart C includes multiple sections 
that govern imposition of a civil money penalty, while 45 CFR 150.305 
only applies to a determination of which entity is liable for a civil 
money penalty.

B. Individual Market

    The regulations at 45 CFR Part 148 implement the individual market 
requirements of Title XXVII of the PHS Act. Section 102(b) of GINA 
added a new section 2753 (42 U.S.C. 300gg-53) to Title XXVII to 
prohibit discrimination on the basis of genetic information in the 
individual health insurance market. Section 2753 of the PHS Act 
generally parallels the group market genetic nondiscrimination 
provisions GINA added to the Code, ERISA and the PHS Act. Section 2753 
and the interim final regulations prohibit issuers in the individual 
market from collecting genetic information prior to or in connection 
with such enrollment, and at any time for underwriting purposes. 
Section 2753 and the interim final regulations also prohibit issuers 
from requesting or requiring genetic tests. The exceptions and rules of 
construction that apply to the foregoing requirements in the group 
market (for example, the rule for incidental collections of genetic 
information and the research exception to the rule against requiring 
genetic tests) also apply in the individual market.
    Since individual market issuers were not subject to the Federal 
HIPAA nondiscrimination requirements applicable to issuers in the group 
market, it was necessary for GINA to amend the PHS Act in order to have 
similar protections against genetic discrimination applicable in both 
markets. Thus, new section 2753 of the PHS Act prohibits issuers of 
individual health insurance policies from using genetic information as 
a basis for making eligibility or premium determinations, or for 
imposing preexisting condition exclusions. Issuers in the individual 
market may continue to establish rules for eligibility, increase 
premiums, and impose preexisting condition exclusions based on the 
manifestation of a disease or disorder in an individual, or in a family

[[Page 51670]]

member covered under the policy that covers the individual. However, 
they cannot use a manifestation of a disease or disorder in one 
individual as genetic information about family members covered under 
the same policy or another policy in order to further increase 
premiums.
    These interim final regulations add a new Sec.  148.180 to subpart 
C of part 148 to implement section 2753 of the PHS Act. To the extent 
that the provisions of section 2753 parallel the GINA amendments to 
section 2702 of the PHS Act which govern the group market, Sec.  
148.180 restates the corresponding group market provisions (with 
conforming changes and technical corrections appropriate to the 
individual market) rather than incorporating the group market 
provisions by reference.
    As discussed above, GINA amended the Social Security Act to include 
genetic nondiscrimination provisions that apply to issuers of Medigap 
policies. The PHS Act regulations at 45 CFR 148.220 state that Medigap 
policies are excepted benefits. Nevertheless, because Medigap policies 
are subject to GINA under the Social Security Act and NAIC model 
regulation, CMS made clarifying changes to Sec.  148.220 to emphasize 
the foregoing.

III. Interim Final Regulations and Request for Comments

    Section 9833 of the Code, section 734 of ERISA, and section 2792 of 
the PHS Act authorize the Secretaries of the Treasury, Labor, and HHS 
to promulgate any interim final rules that they determine are 
appropriate to carry out the provisions of Chapter 100 of Subtitle K of 
the Code, Part 7 of Subtitle B of Title I of ERISA, and Part A of Title 
XXVII of the PHS Act, which include the provisions of GINA.
    Under Section 553(b) of the Administrative Procedure Act (5 U.S.C. 
551 et seq.) a general notice of proposed rulemaking is not required 
when an agency, for good cause, finds that notice and public comment 
thereon are impracticable, unnecessary, or contrary to the public 
interest.
    These rules are being adopted on an interim final basis because the 
Secretaries have determined that without prompt guidance some members 
of the regulated community may not know what steps to take to comply 
with the requirements of GINA, which may result in an adverse impact on 
participants and beneficiaries with regard to their health benefits 
under group health plans and the protections provided under GINA. 
Moreover, GINA's requirements will affect the regulated community in 
the immediate future.
    The requirements of sections 101 through 103 of GINA are effective 
for all group health plans and for health insurance issuers offering 
coverage in connection with such plans for plan years beginning after 
May 21, 2009. Plan administrators and sponsors, issuers, and 
participants and beneficiaries will need guidance on how to comply with 
the new statutory provisions. As noted earlier, these interim rules 
take into account comments received by the Departments in response to 
the request for information on GINA published in the Federal Register 
on October 10, 2008 (73 FR 60208). For the foregoing reasons, the 
Departments find that the publication of a proposed regulation, for the 
purpose of notice and public comment thereon, would be impracticable, 
unnecessary, and contrary to the public interest.

IV. Economic Impact and Paperwork Burden

A. Summary--Department of Labor and Department of Health and Human 
Services

    As discussed above, Title I of GINA generally prohibits group 
health plans and health insurance issuers in both the group and 
individual markets from discriminating based on genetic information, 
requesting or requiring an individual to undergo a genetic test, and 
collecting genetic information prior to or in connection with 
enrollment or for underwriting purposes. The Departments have crafted 
these interim final regulations to secure the protections from 
discrimination intended by Congress in as economically efficient a 
manner as possible. Although the Departments are unable to quantify the 
regulations' economic benefits, they have quantified their costs and 
have provided a qualitative discussion of some of the benefits that may 
stem from this rule.
    One potential benefit associated with GINA and these interim final 
regulations is that genetic testing and research may expand when 
discrimination based on genetic information and the collection of such 
information is prohibited, if these protections allay individuals' 
fears of adverse health coverage-related consequences from undergoing 
genetic testing and participating in research studies examining genetic 
information. An increase in genetic testing and research, in turn, 
could provide greater knowledge regarding the genetic basis of disease, 
which could facilitate the early diagnosis and treatment of individuals 
with a genetic predisposition toward developing certain diseases and 
disorders and may allow scientists to develop new medicines, 
treatments, and therapies that could enhance the health and welfare of 
Americans.

B. Statement of Need for Regulatory Action

    Congress directed the Departments to issue regulations implementing 
the GINA provisions not later than 12 months after the date of 
enactment. In response to this Congressional directive, these interim 
final regulations clarify and interpret the GINA nondiscrimination 
provisions under section 702 of ERISA, sections 2702 and 2753 of the 
PHS Act, and section 9802 of the Code. These regulations are needed to 
secure and implement GINA's nondiscrimination provisions and ensure 
that the rights provided to participants, beneficiaries, and other 
individuals under GINA are fully realized. The Departments' assessment 
of the expected economic effects of these interim final regulations is 
discussed in detail below.

C. Executive Order 12866--Department of Labor and Department of Health 
and Human Services

    Under Executive Order 12866 (58 FR 51735, Oct. 4, 1993), the 
Departments must determine whether a regulatory action is 
``significant'' and therefore subject to the requirements of the 
Executive Order and review by the Office of Management and Budget 
(OMB). Under section 3(f), the order defines a ``significant regulatory 
action'' as an action that is likely to result in a rule: (1) Having an 
annual effect on the economy of $100 million or more, or adversely and 
materially affecting a sector of the economy, productivity, 
competition, jobs, the environment, public health or safety, or State, 
local or Tribal governments or communities (also referred to as 
``economically significant''); (2) creating serious inconsistency or 
otherwise interfering with an action taken or planned by another 
agency; (3) materially altering the budgetary impacts of entitlement 
grants, user fees, or loan programs or the rights and obligations of 
recipients thereof; or (4) raising novel legal or policy issues arising 
out of legal mandates, the President's priorities, or the principles 
set forth in the Executive Order.
    Pursuant to the terms of the Executive Order, the Departments have 
determined that this action raises novel policy issues arising out of 
legal mandates. Therefore, the interim final regulations are 
``significant'' and subject

[[Page 51671]]

to OMB review under Section 3(f)(4) of the Executive Order. 
Accordingly, the Departments have undertaken, as described below, an 
assessment of the costs and benefits of the regulation. Over the 10-
year period of 2010 to 2019, the present value of the costs, using a 
discount rate of 7 percent, is estimated to be $294.8 million in 2009 
Dollars, as is shown in Table 1.
    All other numbers included in the text are not discounted.

                                     Table 1--Total Discounted Costs of Rule
                                          [In millions of 2009 dollars]
----------------------------------------------------------------------------------------------------------------
                                                                                                   Total costs--
              Year                 Wellness plan    Individual    Medical record     Research      discounted at
                                      review       market review      review        disclosure          7%
----------------------------------------------------------------------------------------------------------------
                                             (B)             (C)             (D)             (E)   B + C + D + E
----------------------------------------------------------------------------------------------------------------
2010............................            $2.0            $5.3           $38.3              $0           $45.5
2011............................  ..............  ..............            35.8  ..............            35.8
2012............................  ..............  ..............            33.4  ..............            33.4
2013............................  ..............  ..............            31.2  ..............            31.2
2014............................  ..............  ..............            29.2  ..............            29.2
2015............................  ..............  ..............            27.3  ..............            27.3
2016............................  ..............  ..............            25.5  ..............            25.5
2017............................  ..............  ..............            23.8  ..............            23.8
2018............................  ..............  ..............            22.3  ..............            22.3
2019............................  ..............  ..............            20.8  ..............            20.8
                                 -------------------------------------------------------------------------------
    Total with 7% Discounting...  ..............  ..............  ..............  ..............           294.8
    Total with 3% Discounting...  ..............  ..............  ..............  ..............           356.8
----------------------------------------------------------------------------------------------------------------
Note: The displayed numbers are rounded and therefore may not add up to the totals. They are discounted using a
  7 percent discount rate unless otherwise noted.

    The Departments performed a comprehensive, unified analysis to 
estimate the costs and, to the extent feasible, provide a qualitative 
assessment of benefits attributable to the statute and regulations for 
purposes of compliance with Executive Order 12866, the Regulatory 
Flexibility Act, and the Paperwork Reduction Act. The Departments' 
assessment and underlying analysis is set forth below.
1. Affected Entities and Other Assumptions
    The Departments estimate that 137.1 million participants and 
beneficiaries \13\ are covered by nearly 2.5 million private sector 
group health plans and 31.7 million individuals are covered by 
individual health insurance policies.\14\ The Departments also estimate 
that approximately 630 insurers will be are affected by GINA, 
consisting of approximately 460 insurers offering coverage in 
connection with insured group health plans and approximately 490 health 
insurance issuers offering policies in the individual health insurance 
market.\15\
---------------------------------------------------------------------------

    \13\ Departments' estimates based on the March 2007 Current 
Population Survey.
    \14\ Departments' estimates based on the March 2008 Current 
Population Survey.
    \15\ Estimates are from 2007 NAIC financial statements data and 
the California Department of Managed Healthcare (http://wpso.dmhc.ca.gov/hpsearch/viewall.aspx).
---------------------------------------------------------------------------

2. Benefits
    One potential benefit associated with GINA and these interim final 
regulations is that genetic testing and research may increase if the 
protections provided under GINA allay the public's concerns that health 
plans and insurers will use genetic information to discriminate based 
on the collection and disclosure of such information. Comments received 
in response to the RFI indicate that genetic testing and research 
currently are being underutilized. A major reason cited for the lack of 
genetic testing is the public's fear of adverse employment-related or 
health coverage-related consequences associated with having genetic 
testing or participating in research studies that examine genetic 
information. Removing barriers that impede the growth of genetic 
testing and research has the potential to improve health and save lives 
by providing patients and physicians with critical knowledge to 
facilitate early intervention often before disease symptoms are 
manifested. It also could expand the development of scientific 
research, which could result in the development of new medicines, 
therapies, and treatments for diseases and disorders.
    Additional economic benefits may derive directly from the improved 
clarity provided by the interim final regulations, which will reduce 
uncertainty and help group health plan sponsors and health insurers 
comply with GINA's requirements in a cost effective manner. Moreover, 
the prohibitions enacted in GINA and these interim final regulations 
should provide a benefit to individuals with genetic predispositions 
for diseases by decreasing the number of individuals that are denied 
coverage under a group health plan or priced out of the individual 
health insurance market.\16\
---------------------------------------------------------------------------

    \16\ When scoring the GINA bill the Congressional Budget Office 
estimated that the bill would increase health insurance coverage by 
about 600 people a year with most being in the individual market. 
Congressional Budget Office Cost Estimate, H.R. 493 Genetic 
Information Nondiscrimination Act of 2007, April 12, 2007.
---------------------------------------------------------------------------

    Currently, the Departments are unable to quantify these benefits, 
because relatively few genetic tests and research studies are performed 
in the private sector \17\ and a limited number of genetic tests are 
available. As stated above, the Departments expect the number of 
genetic tests and research studies to increase in the near future. The 
Departments, however, lack sufficient information to project the 
trajectory of this increase.
---------------------------------------------------------------------------

    \17\ Pollitz, Karen, et. al. ``Genetic Discrimination in Health 
Insurance: Current Legal Protections and Industry Practices.'' 
Inquiry 44:350-368 (Fall 2007).
---------------------------------------------------------------------------

3. Costs
a. Health Risk Assessments
    As discussed above, GINA and these interim final regulations 
prohibit group health plans and health insurance issuers offering 
coverage in the group and individual health insurance markets from 
collecting genetic information in

[[Page 51672]]

connection with or prior to enrollment and for underwriting purposes. 
Comments received in response to the RFI indicate that the immediate 
impact of GINA and these interim final regulations on group health 
plans and health insurance issuers providing group health coverage 
should be minimal. Plans and issuers commented that they do not collect 
or use genetic information for underwriting purposes because pre-GINA 
laws and regulations prohibit them from discriminating against 
individuals based on any health status-related factors, including 
genetic information.\18\
---------------------------------------------------------------------------

    \18\ See e.g., Comments from BlueCross BlueShield Association, 
pg. 3 (http://www.dol.gov/ebsa/pdf/cmt-12190808.pdf) and Society for 
Human Resource Management, pg. 2 (http://www.dol.gov/ebsa/pdf/cmt-12190813.pdf).
---------------------------------------------------------------------------

    Currently, many group health plans request family medical history 
information to be provided in response to questions on HRAs that are 
completed by new employees before enrollment in the plan and as part of 
open enrollment for current employees. HRAs are used in connection with 
wellness and disease management programs to identify individuals at 
risk for certain conditions and provide an opportunity for preventive 
treatment service referrals, disease management, and other behavioral 
change initiatives that are focused on creating higher quality medical 
outcomes. Some group health plans provide rewards and incentives to 
employees who complete HRAs, such as premium reductions, lower 
deductibles, and cash bonus payments.
    The Departments expect that most of the cost of complying with GINA 
and these interim final regulations will be concentrated among the 
approximately 30,000 group health plans \19\ that are associated with 
wellness and disease management programs that provide rewards and 
incentives to employees that complete HRAs. These plans will have to 
conduct a compliance review to ensure that their HRAs and any 
associated policies and procedures comply with GINA's prohibition on 
using genetic information prior to or in connection with enrollment or 
for underwriting purposes and to make any necessary changes to their 
HRAs and policies and procedures.
---------------------------------------------------------------------------

    \19\ This estimate is based on the Kaiser Family Foundation 
Survey, Employer Health Benefits 2008 Annual Survey: Wellness 
Programs and Employer Opinions, section 12, which estimates that 10% 
of plans have health risk assessment and 12% of those offer a 
financial incentive to employees that complete HRAs (2.5 million 
group health plans x 10% of plans have health risk assessments x 12% 
of those plans that offer financial rewards and incentives = 30,000 
plans).
---------------------------------------------------------------------------

    The Departments assume that insured plans will rely on the health 
insurance issuer providing coverage to ensure compliance and that self-
insured plans will rely on wellness vendors and other service providers 
to ensure compliance. These interim final regulations provide several 
examples illustrating the application of the regulations to HRAs, which 
are intended to reduce the compliance burden. Moreover, the per plan 
compliance cost is expected to be low, because vendors and insurers 
will be able to spread these costs across multiple client plans.\20\
---------------------------------------------------------------------------

    \20\ There are about 30,000 plans with health risk assessments 
and about 460 insurers in the group market; this is an average of 65 
plans per insurer.
---------------------------------------------------------------------------

    The Departments assume that the average burden per plan will be 
one-half hour of a legal professional's time at an hourly labor rate of 
$116,\21\ and one-half hour of a clerical staff's time at an hourly 
labor rate of $26 to conduct the compliance review and make the needed 
changes to the HRAs. This results in a total cost of $2.1 million ($1.7 
for legal services, and $0.4 million for clerical services) in the 
first year. The Departments invite public comments on this estimate.
---------------------------------------------------------------------------

    \21\ EBSA estimates based on the National Occupational 
Employment Survey (May 2007, Bureau of Labor Statistics) and the 
Employment Cost Index June 2008, Bureau of Labor Statistics).
---------------------------------------------------------------------------

    To the extent that GINA and these interim final regulations 
prohibit group health plans and issuers from incentivizing employees to 
complete HRAs requesting genetic information, including family medical 
history, and response rates for HRAs drop as a consequence, a cost may 
be incurred that is associated with the forgone benefits of identifying 
disease risks early and preventing their onset. The Departments do not 
have adequate data to determine whether these forgone benefits would 
materialize, and, if so, what their extent may be. However, the 
Departments invite public comments on this issue, including evidence-
based estimates of what the extent of these forgone benefits may be, if 
any, and ways in which these public health benefits may be realized 
while complying with the statutory prohibition on using genetic 
information for underwriting purposes.
b. GINA's Impact on the Individual Health Insurance Market
    The Department of Health and Human Services expects that the 
individual health insurance market will incur higher costs of complying 
with these interim final regulations than group health plans. The 
Departments assume that health insurance issuers in the individual 
market will have to review their applications and underwriting policies 
and procedures to ensure that genetic information is not collected or 
used for underwriting purposes. Issuers also will need to train 
underwriters to avoid using genetic information in underwriting. The 
Departments estimate that the approximately 490 issuers in the 
individual health insurance market will spend approximately 100 hours 
in-house each conducting a compliance review, modifying their 
applications and policies and procedures, and drafting training 
materials and providing training sessions for underwriters to ensure 
compliance with GINA and these interim final regulations at a labor 
rate of $116. This results in a total cost of about $5.6 million. The 
Departments invite public comments on this estimate.
    One comment received in response to the RFI indicated that 
underwriters in the individual health insurance market request medical 
records from medical service providers for approximately 20 percent of 
applicants.\22\ It is likely that most of these medical records contain 
information relating to family medical history. In a survey, 16 of 23 
senior medical underwriters reported that while investigating an 
applicant's medical history, they had encountered genetic information 
about an applicant at least once in the applicant's history.\23\ As 
explained earlier, these interim final regulations would require health 
insurance issuers in the individual market to explicitly state that 
genetic information--including family medical history--should not be 
provided when an issuer requests medical records from medical services 
providers for underwriting purposes. In turn, issuers may request that 
medical services providers redact any family medical history 
information regarding an applicant that is contained in medical records 
requested by an issuer to ensure that the provisions of GINA and these 
interim final regulations are not violated. However, as explained 
earlier under the discussion of the incidental collection exception, if 
medical services providers do not comply with the issuers' requests to 
redact such information, the collection of genetic information would 
count as an ``incidental collection'' of genetic information on the 
part of issuers, and these interim final regulations would

[[Page 51673]]

not be violated so long as the issuers do not use the genetic 
information for underwriting purposes.
---------------------------------------------------------------------------

    \22\ This comment may be accessed at the following URL: http://www.dol.gov/ebsa/regs/cmt-geneticinfoND.html.
    \23\ Pollitz, Karen, et al., ``Genetic Discrimination in Health 
Insurance: Current Legal Protections and Industry Practices.'' 
Inquiry, 44: 350-368 (Fall 2007).
---------------------------------------------------------------------------

    The Departments assume that medical service providers will be 
responsible for redacting genetic information from medical records 
before submitting the records to insurers, and that trained medical 
staff will be used for this purpose. The Departments estimate that, on 
average, health insurance issuers will request 3 million medical 
records per year, and that medical records staff will spend one-half 
hour per request redacting genetic information from requested medical 
records, at a labor rate of $26 per hour. This results in a total 
annual cost of nearly $41 million. The Departments invite public 
comments on this estimate.
c. Research Exception
    As discussed above, GINA and these interim final regulations 
provide an exception to the limitations on requesting or requiring 
genetic testing, which allows a group health plan or group health 
insurance issuer to request, but not require, a participant or 
beneficiary to undergo a genetic test \24\ if all of the following 
conditions of the research exception are satisfied:
---------------------------------------------------------------------------

    \24\ Comments indicated that at least one issuer is engaging in 
a long-term research study involving genetic testing. Others may be 
planning similar research.
---------------------------------------------------------------------------

     The request must be made pursuant to research that 
complies with 45 CFR Part 46 (or equivalent Federal regulations) and 
any applicable State or local law or regulations for the protection of 
human subjects in research. To comply with the informed consent 
requirements of 45 CFR 46.116(a)(8), participants in the research must 
receive a disclosure that participation in the research is voluntary, 
refusal to participate cannot involve any penalty or loss of benefits 
to which the subject is otherwise entitled, and participation may be 
discontinued at any time without penalty or loss of benefits to which 
the subject is entitled when the participant's informed consent is 
sought (the participant disclosure).\25\ These interim final 
regulations provide that when participants receive the participant 
disclosure required under 45 CFR 46.116(a)(8) when their informed 
consent is sought, no additional disclosures are required for purposes 
of the GINA research exception.
---------------------------------------------------------------------------

    \25\ The regulations at 45 CFR 46.116(c) and (d) provide for the 
waiver or alteration of the requirements for obtaining informed 
consent in certain cases. However, given the second condition 
established for this research exception under GINA, it is unlikely 
that a waiver of informed consent could be granted under 45 CFR 
46.116(c) or (d). According to 45 CFR 46.116(c) and (d), one of the 
conditions that must be met in order for a waiver to be granted is 
that the research could not practicably be carried out without the 
waiver. The second condition of this research exception under GINA 
states that a plan or issuer may request, but not require, that a 
participant or beneficiary undergo genetic testing for research 
purposes only if the plan or issuer makes the request in writing and 
clearly indicates that compliance with the request is voluntary. 
Since it is difficult to envision a circumstance where it would be 
the case that research could not be practicably carried out without 
a waiver of informed consent under 45 CFR 46.116(c) or (d), and yet 
be able to satisfy the second condition of this research exception 
under GINA, we expect that for research studies conducted under the 
research exception under GINA, it is unlikely that informed consent 
could be waived under 45 CFR 46.116(c) or (d).
---------------------------------------------------------------------------

     The plan or issuer must make the request in writing and 
must clearly indicate to each participant or beneficiary (or in the 
case of a minor child, to the legal guardian of such beneficiary) to 
whom the request is made that compliance with the request is voluntary 
and noncompliance will have no effect on eligibility for benefits or 
premium or contribution amounts.
     None of the genetic information collected or acquired as a 
result of the research may be used for underwriting purposes.
     The plan or issuer must complete a copy of the ``Notice of 
Research Exception under the Genetic Information Nondiscrimination 
Act'' (the Notice) and provide it to the address specified in its 
instructions. The Notice and instructions are available on the 
Department of Labor's Web site (http://www.dol.gov/ebsa).
    The Departments estimate that up to five entities (consisting of 
group health plans and health insurance issuers in the group and 
individual markets) will use the genetic research exception and assume 
that the requirements of 45 CFR Part 46 will be satisfied. Based on the 
foregoing, the Departments assume that all group health plans and group 
health insurance issuers using the exemption will not have to send a 
disclosure to participants in the genetic research, because they will 
comply with the requirements of 45 CFR Part 46.116(a)(8). Therefore, 
the only incremental cost imposed by these interim final regulations 
will be for the group health plans and group health issuers to send the 
Notice to the appropriate Department.\26\ Because this cost is de 
minimis, it has not been included in this Regulatory Impact Analysis.
---------------------------------------------------------------------------

    \26\ The instructions to the Notice will specify the appropriate 
Department to which the Notice should be submitted.
---------------------------------------------------------------------------

4. Uncertainty
a. Adverse Selection
    GINA's prohibition on the use and collection of genetic information 
could increase the potential for adverse selection in the individual 
health insurance market. Adverse selection arises when individuals 
seeking coverage have information about their health risks that issuers 
do not know.\27\
---------------------------------------------------------------------------

    \27\ For example, individuals who obtain results from genetic 
tests indicating the risk of contracting a serious medical condition 
could benefit financially by ``choosing the timing of purchases, and 
the type and level of benefits purchased. This biased selection 
would have a direct impact on premium rates, ultimately raising the 
cost of insurance to everyone.'' American Academy of Actuaries, 
``Genetic Information and Medical Expense Insurance,'' June 2000.
---------------------------------------------------------------------------

    Such information asymmetry can prevent the insurer from assessing 
the individual's risk accurately enough to determine the appropriate 
premium to charge. On average, if issuers do not accurately assess the 
risks they assume, they will pay more in claims than they receive in 
premiums. To eliminate this shortfall, issuers may be forced to raise 
premiums for all insureds. If issuers raise premiums for all insureds, 
those with a perceived low risk of needing medical care might drop 
their coverage. This outcome in serious cases may lead to a continued 
cycle of across-the-board premium increases.
    The Departments are not able to measure the extent to which GINA 
might lead to adverse selection and thereby raise premiums in the 
individual health insurance market, or whether GINA protections of 
genetic information will increase the total number of persons insured 
under individual health insurance policies relative to the number that 
might leave the market due to increased premiums. Currently, with few 
tests being performed, the Departments expect the impact to be minimal; 
however, as the number of tests increases, the effects of adverse 
selection on the individual health insurance market also could increase 
and the impact of adverse selection could grow.
b. Impact of GINA on Health Care Expenditures
    Another uncertainty associated with GINA and these interim final 
regulations is whether total health care expenditures will increase or 
decrease. Whether expenditures will increase or decrease is dependent 
on a number of factors such as the following: The cost and predictive 
power of tests, how widely the tests are performed among the 
population, whether detected gene abnormalities are based on a single 
gene

[[Page 51674]]

or also involve environmental and other confounding factors which lower 
the predictive value of the test and treatment, and whether treatments 
for detected gene abnormalities are less costly than treatments for the 
manifested disease.
    Genetic testing typically is not covered under individual health 
insurance policies; group health plans are far more likely to cover 
both the tests and associated treatments.\28\ As the number of genetic 
tests performed increases, the Departments expect group health care 
premiums will rise to offset the increased costs to insurers, and any 
increase or decrease in overall expenditures is expected to result in 
increased or decreased premiums for the group market.
---------------------------------------------------------------------------

    \28\ American Academy of Actuaries, Genetic Information and 
Medical Expense Insurance. June 2000.
---------------------------------------------------------------------------

D. Regulatory Flexibility Act--Department of Labor and Department of 
Health and Human Services

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) (RFA) imposes 
certain requirements with respect to Federal rules that are subject to 
the notice and comment requirements of section 553(b) of the 
Administrative Procedure Act (5 U.S.C. 551 et seq.) and that are likely 
to have a significant economic impact on a substantial number of small 
entities. Because these rules are being issued as interim final 
regulations, the RFA does not apply and the Departments are not 
required to either certify that the rule would not have a significant 
economic impact on a substantial number of small entities or conduct a 
regulatory flexibility analysis.
    Nevertheless, the Departments carefully considered the likely 
impact of the rule on small entities in connection with their 
assessment under Executive Order 12866. The Departments expect the 
rules to reduce the compliance burden imposed on plans and insurers by 
clarifying definitions and terms contained in the statute and providing 
examples of acceptable methods to comply with specific provisions. 
Based on the foregoing, and as further discussed below, the Departments 
hereby certify that the rule will not have a significant economic 
impact on a substantial number of small entities.\29\
---------------------------------------------------------------------------

    \29\ For purposes of this certification, the Departments 
continue to consider a small entity to be an employee benefit plan 
with fewer than 100 participants. The basis of this definition is 
found in section 104(a)(2) of ERISA, which permits the Secretary of 
Labor to prescribe simplified annual reports for pension plans which 
cover fewer than 100 participants. The Departments consulted with 
the Small Business Administration in making this determination as 
required by 5 U.S.C. 601(3) and 13 CFR 121.903(c).
---------------------------------------------------------------------------

    The Departments expect most of the cost of complying with GINA and 
the rules to be concentrated among group health plans associated with 
wellness and disease management programs providing rewards and 
incentives to employees who complete Health Risk Assessments (HRAs). 
The Departments estimate that approximately 15,000 (out of 2.4 million) 
small plans (or 0.00625 of all group health plans) will need to review 
their HRAs to ensure that genetic information is not used prior to or 
in connection with enrollment or for underwriting purposes and to make 
any necessary changes to forms and policies and procedures. This 
process is estimated to require one-half hour of a legal professional's 
time at an hourly labor rate of $116 and one-half hour of a clerical 
staff member's time at an hourly labor rate of $26 resulting in an 
average cost to the plans of $71 ($58 + $13).
    Health insurers in both the group and individual health insurance 
markets will have to ensure compliance with the GINA and the rules. For 
this purpose, using the Small Business Administration's definition of a 
small business as a business with less than $7 million in revenues, 
premiums earned as a measure of revenue, and data obtained from the 
National Association of Insurance Commissioners, the Departments 
estimate that approximately 75 out of 630 insurers had revenues of less 
that $7 million, and, of these, about 25 had revenues of less than $1 
million.
    The Departments estimate that each insurer on average would spend 
100 hours of professional time at an hourly labor rate of $116 to 
revise policies and procedures and train underwriters about GINA. This 
would result in an estimated one time average cost of $11,600 per 
insurer. For the approximately 25 insurers with revenues of less than 
$1 million, this burden could be more than one percent of premiums. 
However, the estimated costs are an average cost for plans of all 
sizes, and the Departments expect small insurers to have lower 
implementation costs, because they have fewer underwriters and other 
staff members to train.
    The Departments invite public comments on this certification.

E. Special Analyses--Department of the Treasury

    Notwithstanding the determinations of the Department of Labor and 
Department of Health and Human Services, for purposes of the Department 
of the Treasury, it has been determined that this Treasury decision is 
not a significant regulatory action for purposes of Executive Order 
12866. Therefore, a regulatory assessment is not required. It has also 
been determined that section 553(b) of the Administrative Procedure Act 
(5 U.S.C. chapter 5) does not apply to these regulations. For the 
applicability of the RFA, refer to the Special Analyses section in the 
preamble to the cross-referencing notice of proposed rulemaking 
published elsewhere in this issue of the Federal Register. Pursuant to 
section 7805(f) of the Code, these interim final regulations will be 
submitted to the Chief Counsel for Advocacy of the Small Business 
Administration for comment on their impact on small businesses.

F. Paperwork Reduction Act

1. Department of Labor and Department of the Treasury
    As part of their continuing efforts to reduce paperwork and 
respondent burden, the Departments conduct a preclearance consultation 
program to provide the general public and Federal agencies with an 
opportunity to comment on proposed and continuing collections of 
information in accordance with the Paperwork Reduction Act of 1995 
(PRA) (44 U.S.C. 3506(c)(2)(A)). This helps to ensure that requested 
data can be provided in the desired format, reporting burden (time and 
financial resources) is minimized, collection instruments are clearly 
understood, and the impact of collection requirements on respondents 
can be properly assessed.
    As discussed above, GINA and these interim final regulations 
provide an exception to the limitations on requesting or requiring 
genetic testing that allow a group health plan or group health 
insurance issuer to request, but not require, a participant or 
beneficiary to undergo a genetic test \30\ if all of the following 
conditions of the research exception set forth in 29 CFR 2590.702-
1(c)(5) are satisfied:
---------------------------------------------------------------------------

    \30\ Comments indicated that at least one issuer is engaging in 
a long-term research study involving genetic testing. Others may be 
planning similar research.
---------------------------------------------------------------------------

     The request must be made pursuant to research that 
complies with 45 CFR Part 46 (or equivalent Federal regulations) and 
any applicable State or local law or regulations for the protection of 
human subjects in research. To comply with the informed consent 
requirements of 45 CFR 46.116(a)(8), a participant must receive a 
disclosure that participation in the research is voluntary, refusal to 
participate cannot involve any penalty

[[Page 51675]]

or loss of benefits to which the subject is otherwise entitled, and the 
subject may discontinue participation at any time without penalty or 
loss of benefits to which the subject is entitled (the participant 
disclosure).\31\ These interim final regulations provide that when the 
participant disclosure is received by participants when their informed 
consent is sought, no additional disclosures are required for purposes 
of the GINA research exception.
---------------------------------------------------------------------------

    \31\ While 45 CFR 46.116(c) and (d) permit a waiver of the 
disclosure otherwise required under 45 CFR 46.116(a)(8), it is 
unlikely that such a waiver could be granted for research studies 
conducted under the research exception under GINA. See footnote 25.
---------------------------------------------------------------------------

     The plan or issuer must make the request in writing and 
must clearly indicate to each participant or beneficiary (or in the 
case of a minor child, to the legal guardian of such beneficiary) to 
whom the request is made that compliance with the request is voluntary 
and noncompliance will have no effect on eligibility for benefits or 
premium or contribution amounts.
     None of the genetic information collected or acquired as a 
result of the research may be used for underwriting purposes.
     The plan or issuer must complete a copy of the ``Notice of 
Research Exception under the Genetic Information Nondiscrimination 
Act'' (the Notice) and provide it to the address specified in its 
instructions. The Notice and instructions are available on the 
Department of Labor's Web site (http://www.dol.gov/ebsa).
    Two information collection requests (ICRs) are associated with the 
genetic research exception--the participant disclosure and the Notice. 
The Departments estimate that up to three entities will take advantage 
of the research exception, and that all of the entities will comply 
with the requirements of 45 CFR Part 46, including providing the 
participant disclosure.
    The Departments are not soliciting comments concerning an ICR 
pertaining to the participant disclosure, because these interim final 
regulations provide that group health plans and group health insurance 
issuers meeting the requirements of 45 CFR Part 46 are not required to 
provide additional disclosures, and the Departments have assumed that 
all entities using the research exemption will meet these requirements. 
The costs and burdens associated with complying with the participant 
disclosure requirement already are accounted for in the information 
collection request for the informed consent requirements contained in 
45 CFR Part 46 approved under the Department of Health and Human 
Services' OMB Control Number (0990-0260).
    Currently, the Departments are soliciting comments concerning the 
Notice. The Departments have submitted a copy of these interim final 
regulations to OMB in accordance with 44 U.S.C. 3507(d) for review of 
its information collections. The Departments and OMB are particularly 
interested in comments that:
     Evaluate whether the collection of information is 
necessary for the proper performance of the functions of the agency, 
including whether the information will have practical utility;
     Evaluate the accuracy of the agency's estimate of the 
burden of the collection of information, including the validity of the 
methodology and assumptions used;
     Enhance the quality, utility, and clarity of the 
information to be collected; and
     Minimize the burden of the collection of information on 
those who are to respond, including through the use of appropriate 
automated, electronic, mechanical, or other technological collection 
techniques or other forms of information technology, for example, by 
permitting electronic submission of responses.
    Comments should be sent to the Office of Information and Regulatory 
Affairs, Attention: Desk Officer for the Employee Benefits Security 
Administration either by fax to (202) 395-7285 or by e-mail to [email protected]. Although comments may be submitted through 
December 7, 2009, OMB requests that comments be received within 30 days 
of publication of these interim final regulations to ensure their 
consideration. A copy of the ICR may be obtained by contacting the PRA 
addressee: G. Christopher Cosby, Office of Policy and Research, U.S. 
Department of Labor, Employee Benefits Security Administration, 200 
Constitution Avenue, NW., Room N-5718, Washington, DC 20210. Telephone: 
(202) 693-8410; Fax: (202) 219-4745. These are not toll-free numbers. 
E-mail: [email protected]. ICRs submitted to OMB also are available at 
reginfo.gov (http://www.reginfo.gov/public/do/PRAMain).
    The Departments estimate that completing and mailing the Notice 
will require 15 minutes of clerical time at an hourly rate of $26 per 
hour. Therefore, the total hour burden associated with completing the 
Notice is estimated to be 0.75 hours of clerical time. The cost burden 
consists of material and mailing cost to mail the two-page Notice and 
is estimated to total $20. Although the Departments share the burden 
for this ICR, the Departments have agreed to allocate the hour and cost 
burden associated with the rule entirely to the Department of Labor, 
because it is so minimal. The Departments note that persons are not 
required to respond to, and generally are not subject to any penalty 
for failing to comply with, an ICR unless the ICR has a valid OMB 
control number.\32\
---------------------------------------------------------------------------

    \32\ 5 CFR 1320.1 through 1320.18.
---------------------------------------------------------------------------

    These paperwork burden estimates are summarized as follows:
    Type of Review: New collection.
    Agencies: Employee Benefits Security Administration, Department of 
Labor; Internal Revenue Service, Department of the Treasury.
    Title: Notice of Research Exception under the Genetic Information 
Nondiscrimination Act.
    OMB Number: 1210-NEW.
    Affected Public: Business or other for-profit; not-for-profit 
institutions.
    Respondents: 3.
    Responses: 3.
    Frequency of Response: Occasionally.
    Estimated Total Annual Burden Hours: 0.75 hours.
    Estimated Total Annual Burden Cost: $20.
2. Department of Health and Human Services
    Under the Paperwork Reduction Act of 1995, we are required to 
provide 60-day notice in the Federal Register and solicit public 
comment before a collection of information requirement is submitted to 
the Office of Management and Budget (OMB) for review and approval. In 
order to fairly evaluate whether an information collection should be 
approved by OMB, section 3506(c)(2)(A) of the Paperwork Reduction Act 
of 1995 requires that we solicit comment on the following issues:
     The need for the information collection and its usefulness 
in carrying out the proper functions of our agency.
     The accuracy of our estimate of the information collection 
burden.
     The quality, utility, and clarity of the information to be 
collected.
     Recommendations to minimize the information collection 
burden on the affected public, including automated collection 
techniques.
    We are soliciting public comment on each of these issues for the 
following sections of this document that contain information collection 
requirements (ICRs):

[[Page 51676]]

a. ICRs Regarding Additional Requirements Prohibiting Discrimination 
Based on Genetic Information (Sec.  146.122)
    As stated in the interim final regulations at 45 CFR 146.122(c), 
there are limitations on requesting or requiring genetic testing. The 
interim final regulations at 45 CFR 146.122(c)(1) state that a group 
health plan, and a health insurance issuer offering health insurance 
coverage in connection with a group health plan, must not request or 
require an individual or a family member of the individual to undergo a 
genetic test. Section 146.122(c)(5) explains the research exception 
with respect to the limitations on requesting or requiring genetic 
testing as defined in 45 CFR 146.122(c)(1). Specifically, 45 CFR 
146.122(c)(5) states that a plan or issuer may request, but not 
require, that a participant or beneficiary undergo a genetic test if 
all of the following conditions are met:
     The request must be made pursuant to research that 
complies with 45 CFR Part 46 (or equivalent Federal regulations) and 
any applicable State or local law or regulations for the protection of 
human subjects in research. To comply with the informed consent 
requirements of 45 CFR 46.116(a)(8), a participant must receive a 
disclosure that participation in the research is voluntary, refusal to 
participate cannot involve any penalty or loss of benefits to which the 
subject is otherwise entitled, and the subject may discontinue 
participation at any time without penalty or loss of benefits to which 
the subject is entitled (the participant disclosure).\33\ These interim 
final regulations provide that when the participant disclosure is 
received by participants when their informed consent is sought, no 
additional disclosures are required for purposes of the GINA research 
exception.
---------------------------------------------------------------------------

    \33\ While 45 CFR 46.116(c) and (d) permit a waiver of the 
disclosure otherwise required under 45 CFR 46.116(a)(8), it is 
unlikely that such a waiver could be granted for research studies 
conducted under the research exception under GINA. See footnote 25.
---------------------------------------------------------------------------

     The plan or issuer must make the request in writing and 
must clearly indicate to each participant or beneficiary (or in the 
case of a minor child, to the legal guardian of such beneficiary) to 
whom the request is made that compliance with the request is voluntary 
and noncompliance will have no effect on eligibility for benefits or 
premium or contribution amounts.
     None of the genetic information collected or acquired as a 
result of the research may be used for underwriting purposes.
     The plan or issuer must complete a copy of the ``Notice of 
Research Exception under the Genetic Information Nondiscrimination 
Act'' (the Notice) and provide it to the address specified in its 
instructions. The Notice and instructions are available on the 
Department of Labor's Web site (http://www.dol.gov/ebsa).
    There are two information collection requirements associated with 
obtaining a GINA research exception. The first is the informed consent 
requirement as described above. To comply with the informed consent 
requirements of 45 CFR 46.116(a)(8), a participant must receive a 
disclosure that participation in the research is voluntary, refusal to 
participate cannot involve any penalty or loss of benefits to which the 
subject is otherwise entitled, and the subject may discontinue 
participation at any time without penalty or loss of benefits to which 
the subject is entitled (the participant disclosure).\34\ These interim 
final regulations provide that when the participant disclosure is 
received by participants when their informed consent is sought, no 
additional disclosures are required for purposes of the GINA research 
exception.
---------------------------------------------------------------------------

    \34\ While 45 CFR 46.116(c) and (d) permit a waiver of the 
disclosure otherwise required under 45 CFR 46.116(a)(8), it is 
unlikely that such a waiver could be granted for research studies 
conducted under the research exception under GINA. See footnote 25.
---------------------------------------------------------------------------

    The burden associated with this requirement is the time and effort 
necessary to develop, draft, and disseminate the information consent 
notice to patients. While this requirement is subject to the PRA, the 
associated burden is already approved under OMB control number 0990-
0260. We are not soliciting comments on this requirement at this time.
    The second information collection requirement associated with 
obtaining a GINA research exception is the Notice of Research Exception 
under the Genetic Information Nondiscrimination Act (the Notice). The 
burden associated with this requirement is the time and effort 
necessary for a plan or issuer to complete a copy of the Notice and 
submit it to CMS. CMS also estimates that completing and mailing the 
Notice will require 15 minutes of clerical time at an hourly rate of 
$26 per hour. Therefore, the total hour burden associated with 
completing the Notice is estimated to be 0.5 hours of clerical time. 
The cost burden consists of material and mailing cost to mail the two-
page Notice and is estimated to total $13.
b. ICRs Regarding Prohibition of Discrimination Based on Genetic 
Information (Sec.  148.180)
    The information collection requirements affecting the individual 
health insurance market as stated in 45 CFR 148.180 mirror the 
information collection requirements affecting the group health 
insurance market as stated in 45 CFR 146.122. The burden is discussed 
in detail in section IV.F.2.A. of this preamble. As stated in section 
IV.F.2.A., we expect no more than a combined total of 2 entities 
between the group health insurance market and the individual health 
insurance market to be subject to the information collection 
requirements contained in this interim final rule.

                                                   Estimated Annual Reporting and Recordkeeping Burden
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                           Burden per
                 OMB control No.                         Regulation section(s)          Respondents       Responses         response       Total annual
                                                                                                                            (hours)       burden (hours)
--------------------------------------------------------------------------------------------------------------------------------------------------------
0938-New........................................  45 CFR 146.122....................               2                2              .25              .50
                                                  45 CFR 148.180....................  ...............  ...............  ...............  ...............
--------------------------------------------------------------------------------------------------------------------------------------------------------

    We have submitted a copy of this interim final rule to OMB for its 
review and approval of the aforementioned information collection 
requirements. These requirements are not effective until approved by 
OMB. Although comments may be submitted through December 7, 2009, OMB 
requests that comments be received within 30 days of publication of 
these interim final regulations to ensure their consideration.
    If you comment on these information collection and recordkeeping 
requirements, please do either of the following:
    1. Submit your comments electronically as specified in the

[[Page 51677]]

ADDRESSES section of this proposed rule; or
    2. Submit your comments to the Office of Information and Regulatory 
Affairs, Office of Management and Budget,
    Attention: CMS Desk Officer, CMS-4137-IFC;
    Fax: (202) 395-7285; or
    E-mail: [email protected].
    Please reference ``ICRs Regarding Prohibition of Discrimination 
Based on Genetic Information (Sec.  148.180)'' when submitting your 
comments.

G. Congressional Review Act

    These interim final regulations are subject to the Congressional 
Review Act provisions of the Small Business Regulatory Enforcement 
Fairness Act of 1996 (5 U.S.C. 801 et seq.) and have been transmitted 
to Congress and the Comptroller General for review.

H. Unfunded Mandates Reform Act

    For purposes of the Unfunded Mandates Reform Act of 1995 (Pub. L. 
104-4), as well as Executive Order 12875, these interim final 
regulations do not include any Federal mandate that may result in 
expenditures by State, local, or Tribal governments, nor do they 
include mandates which may impose an annual burden of $100 million or 
more (as adjusted for inflation) on the private sector.

I. Federalism Statement--Department of Labor and Department of Health 
and Human Services

    Executive Order 13132 outlines fundamental principles of 
federalism, and requires the adherence to specific criteria by Federal 
agencies in the process of their formulation and implementation of 
policies that have ``substantial direct effects'' on the States, the 
relationship between the national government and States, or on the 
distribution of power and responsibilities among the various levels of 
government. Federal agencies promulgating regulations that have these 
federalism implications must consult with State and local officials, 
and describe the extent of their consultation and the nature of the 
concerns of State and local officials in the preamble to the 
regulation.
    In the Departments' view, these interim final regulations have 
federalism implications, because they have direct effects on the 
States, the relationship between the national government and States, or 
on the distribution of power and responsibilities among various levels 
of government. However, in the Departments' view, the federalism 
implications of these regulations are substantially mitigated because, 
with respect to health insurance issuers, the Departments expect that 
the majority of States will enact laws or take other appropriate action 
resulting in their meeting or exceeding the Federal GINA standards 
prohibiting discrimination based on genetic information.
    In general, through section 514, ERISA supersedes State laws to the 
extent that they relate to any covered employee benefit plan, and 
preserves State laws that regulate insurance, banking, or securities. 
While ERISA prohibits States from regulating a plan as an insurance or 
investment company or bank, HIPAA added a new preemption provision to 
ERISA (as well as to the PHS Act) narrowly preempting State 
requirements for group health insurance coverage. This amendment 
applies to the GINA nondiscrimination provisions. With respect to these 
provisions, States may continue to apply State law requirements except 
to the extent that such requirements prevent the application of the 
portability, access, and renewability requirements of HIPAA, which 
include GINA's nondiscrimination requirements that are the subject of 
this rulemaking. State insurance laws that are more stringent than the 
Federal requirements are unlikely to ``prevent the application of'' 
GINA, and be preempted. Accordingly, States have significant latitude 
to impose requirements on health insurance issuers that are more 
restrictive than the Federal law.
    GINA provides the Secretary of Labor with the express authority to 
impose a penalty against any health insurance issuer offering health 
insurance to a group health plan covered by ERISA for any failure by 
the issuer to meet the GINA requirements. The States may enforce the 
provisions of GINA as they pertain to issuers, but the Secretary of HHS 
is required to enforce any provisions that a State fails to 
substantially enforce. This relates to HHS' responsibility to enforce 
the HIPAA nondiscrimination provisions. In exercising its 
responsibility, HHS works cooperatively with the State for the purpose 
of addressing the State's concerns and avoiding conflicts with the 
exercise of State authority. HHS has developed procedures to implement 
its enforcement responsibilities, and to afford the States the maximum 
opportunity to enforce HIPAA's requirements in the first instance. HHS' 
procedures address the handling of reports that States may not be 
enforcing HIPAA's requirements, and the mechanism for allocating 
enforcement responsibility between the States and HHS. In compliance 
with the requirement of Executive Order 13132 that agencies examine 
closely any policies that may have federalism implications or limit the 
policy making discretion of the States, the Department of Labor and HHS 
have engaged in numerous efforts to consult with and work cooperatively 
with affected State and local officials. It is expected that the 
Departments will act in a similar fashion in enforcing the GINA 
requirements.
    In addition, the Departments specifically consulted with the 
National Association of Insurance Commissioners (NAIC) in developing 
these interim final regulations. Through the NAIC, the Departments 
sought and received the input of State insurance departments regarding 
certain insurance rating practices. The Departments have also 
cooperated with the States in several ongoing outreach initiatives, 
through which information on GINA is shared among Federal regulators, 
State regulators, and the regulated community.
    Throughout the process of developing these interim final 
regulations, to the extent feasible within the specific preemption 
provisions of HIPAA as it applies to GINA, the Departments have 
attempted to balance the States' interests in regulating health 
insurance issuers, and Congress's intent to provide uniform minimum 
protections to consumers in every State. By doing so, it is the 
Departments' view that they have complied with the requirements of 
Executive Order 13132.
    Pursuant to the requirements set forth in section 8(a) of Executive 
Order 13132, and by the signatures affixed to these regulations, the 
Departments certify that the Employee Benefits Security Administration 
and the Centers for Medicare & Medicaid Services have complied with the 
requirements of Executive Order 13132 for the attached interim final 
regulations in a meaningful and timely manner.

V. Statutory Authority

    The Department of the Treasury temporary and final regulations are 
adopted pursuant to the authority contained in sections 7805 and 9833 
of the Code.
    The Department of Labor interim final regulations are adopted 
pursuant to the authority contained in 29 U.S.C. 1027, 1059, 1135, 
1161-1168, 1169, 1181-1183, 1181 note, 1185, 1185a, 1185b, 1191, 1191a, 
1191b, and 1191c; sec.101(g), Public Law 104-191, 110 Stat. 1936; sec. 
401(b), Public Law 105-200, 112 Stat. 645 (42 U.S.C. 651 note);

[[Page 51678]]

sec. 101(f), Public Law 110-233, 122 Stat. 881; Secretary of Labor's 
Order 1-2003, 68 FR 5374 (Feb. 3, 2003).
    The Department of Health and Human Services interim final 
regulations are adopted pursuant to the authority contained in sections 
2701 through 2763, 2791, and 2792 of the PHS Act (42 U.S.C. 300gg 
through 300gg-63, 300gg-91, and 300gg-92), as added by Public Law 104-
191, and amended by Public Law 104-204, Public Law 105-277, and Public 
Law 110-233.

List of Subjects

26 CFR Part 54

    Excise taxes, Health care, Health insurance, Pensions, Reporting 
and recordkeeping requirements.

29 CFR Part 2590

    Continuation coverage, Disclosure, Employee benefit plans, Group 
health plans, Health care, Health insurance, Medical child support, 
Reporting and recordkeeping requirements.

45 CFR Parts 144, 146, and 148

    Health care, Health insurance, Reporting and recordkeeping 
requirements, and State regulation of health insurance.

Amendments to the Regulations

Internal Revenue Service

26 CFR Chapter 1

0
Accordingly, 26 CFR Part 54 is amended as follows:

PART 54--PENSION EXCISE TAXES

0
Paragraph 1. The authority citation for part 54 is amended by adding an 
entry for Sec.  54.9802-3T in numerical order to read in part as 
follows:

    Authority: 26 U.S.C. 7805. * * *
    Section 54.9802-3T also issued under 26 U.S.C. 9833. * * *


0
Par. 2. Section 54.9801-1 is amended by revising paragraph (a) and 
adding paragraph (b)(6) to read as follows:


Sec.  54.9801-1  Basis and scope.

    (a) Statutory basis. This section and sections 54.9801-2 through 
54.9801-6, 54.9802-1, 54.9802-2, 54.9802-3T, 54.9811-1, 54.9812-1T, 
54.9831-1, and 54.9833-1 (portability sections) implement Chapter 100 
of Subtitle K of the Internal Revenue Code of 1986.
    (b) * * *
    (6) Additional requirements prohibiting discrimination based on 
genetic information.
* * * * *

0
Par 3. Section 54.9801-2 is amended by revising the introductory text 
and revising the definition of Genetic information to read as follows:


Sec.  54.9801-2  Definitions.

    Unless otherwise provided, the definitions in this section govern 
in applying the provisions of Sec.  54.9801-1, this section, Sec. Sec.  
54.9801-3 through 54.9801-6, 54.9802-1, 54.9802-2, 54.9802-3T, 54.9811-
1, 54.9812-1T, 54.9831-1, and 54.9833-1.
* * * * *
    Genetic information has the meaning given the term in Sec.  
54.9802-3T(a)(3).
* * * * *

0
Par 4. Section 54.9802-1 is amended by revising paragraphs (a)(1)(vi), 
(c)(2)(i), the introductory text of paragraph (c)(2)(iii), and 
paragraph (c)(2)(iii) Example 1 to read as follows:


Sec.  54.9802-1  Prohibiting discrimination against participants and 
beneficiaries based on a health factor.

    (a) * * * (1) * * *
    (vi) Genetic information, as defined in Sec.  54.9802-3T.
* * * * *
    (c) * * *
    (2) Rules relating to premium rates--(i) Group rating based on 
health factors not restricted under this section. Nothing in this 
section restricts the aggregate amount that an employer may be charged 
for coverage under a group health plan. But see Sec.  54.9802-3T(b), 
which prohibits adjustments in group premium or contribution rates 
based on genetic information.
* * * * *
    (iii) Examples. The rules of this paragraph (c)(2) are illustrated 
by the following examples:

    Example 1. (i) Facts. An employer sponsors a group health plan 
and purchases coverage from a health insurance issuer. In order to 
determine the premium rate for the upcoming plan year, the issuer 
reviews the claims experience of individuals covered under the plan. 
The issuer finds that Individual F had significantly higher claims 
experience than similarly situated individuals in the plan. The 
issuer quotes the plan a higher per-participant rate because of F's 
claims experience.
    (ii) Conclusion. See Example 1 in 29 CFR 2590.702(c)(2) and 45 
CFR 146.121(c)(2) for a conclusion that the issuer does not violate 
the provisions of 29 CFR 2590.702(c)(2) and 45 CFR 146.121(c)(2) 
similar to the provisions of this paragraph (c)(2) because the 
issuer blends the rate so that the employer is not quoted a higher 
rate for F than for a similarly situated individual based on F's 
claims experience. (However, those examples conclude that if the 
issuer used genetic information in computing the group rate, it 
would violate 29 CFR 2590.702-1(b) or 45 CFR 146.122(b).)
* * * * *

0
Par. 5. Section 54.9831-1 is amended by revising paragraph (b) to read 
as follows:


Sec.  54.9831-1  Special rules relating to group health plans.

* * * * *
    (b) General exception for certain small group health plans. (1) 
Subject to paragraph (b)(2) of this section, the requirements of 
Sec. Sec.  54.9801-1 through 54.9801-6, 54.9802-1, 54.9802-2, 54.9811-
1, 54.9812-1T, and 54.9833-1 do not apply to any group health plan for 
any plan year if, on the first day of the plan year, the plan has fewer 
than two participants who are current employees.
    (2) The exception of paragraph (b)(1) of this section does not 
apply with respect to the following requirements:
    (i) Section 54.9801-3(b)(6).
    (ii) Section 54.9802-1(b), as such paragraph applies with respect 
to genetic information as a health factor.
    (iii) Section 54.9802-1(c), as such paragraph applies with respect 
to genetic information as a health factor.
    (iv) Section 54.9802-1(e), as such paragraph applies with respect 
to genetic information as a health factor.
    (v) Section 54.9802-3T(b).
    (vi) Section 54.9802-3T(c).
    (vii) Section 54.9802-3T(d).
    (viii) Section 54.9802-3T(e).
* * * * *

0
Par. 6. Section 54.9802-3T is added to read as follows:


Sec.  54.9802-3T  Additional requirements prohibiting discrimination 
based on genetic information (temporary).

    (a) Definitions. Unless otherwise provided, the definitions in this 
paragraph (a) govern in applying the provisions of this section.
    (1) Collect means, with respect to information, to request, 
require, or purchase such information.
    (2) Family member means, with respect to an individual --
    (i) A dependent (as defined for purposes of Sec.  54.9801-2) of the 
individual; or
    (ii) Any other person who is a first-degree, second-degree, third-
degree, or fourth-degree relative of the individual or of a dependent 
of the individual. Relatives by affinity (such as by marriage or 
adoption) are treated the same as relatives by consanguinity (that is, 
relatives who share a common biological ancestor). In determining the 
degree of the relationship, relatives by less than full consanguinity 
(such as half-siblings, who share only one parent) are treated the same 
as relatives by full consanguinity (such as siblings who share both 
parents).

[[Page 51679]]

    (A) First-degree relatives include parents, spouses, siblings, and 
children.
    (B) Second-degree relatives include grandparents, grandchildren, 
aunts, uncles, nephews, and nieces.
    (C) Third-degree relatives include great-grandparents, great-
grandchildren, great aunts, great uncles, and first cousins.
    (D) Fourth-degree relatives include great-great grandparents, 
great-great grandchildren, and children of first cousins.
    (3) Genetic information means--
    (i) Subject to paragraphs (a)(3)(ii) and (a)(3)(iii) of this 
section, with respect to an individual, information about--
    (A) The individual's genetic tests (as defined in paragraph (a)(5) 
of this section);
    (B) The genetic tests of family members of the individual;
    (C) The manifestation (as defined in paragraph (a)(6) of this 
section) of a disease or disorder in family members of the individual; 
or
    (D) Any request for, or receipt of, genetic services (as defined in 
paragraph (a)(4) of this section), or participation in clinical 
research which includes genetic services, by the individual or any 
family member of the individual.
    (ii) The term genetic information does not include information 
about the sex or age of any individual.
    (iii) The term genetic information includes--
    (A) With respect to a pregnant woman (or a family member of the 
pregnant woman), genetic information of any fetus carried by the 
pregnant woman; and
    (B) With respect to an individual (or a family member of the 
individual) who is utilizing an assisted reproductive technology, 
genetic information of any embryo legally held by the individual or 
family member.
    (4) Genetic services means--
    (i) A genetic test, as defined in paragraph (a)(5) of this section;
    (ii) Genetic counseling (including obtaining, interpreting, or 
assessing genetic information); or
    (iii) Genetic education.
    (5)(i) Genetic test means an analysis of human DNA, RNA, 
chromosomes, proteins, or metabolites, if the analysis detects 
genotypes, mutations, or chromosomal changes. However, a genetic test 
does not include an analysis of proteins or metabolites that is 
directly related to a manifested disease, disorder, or pathological 
condition. Accordingly, a test to determine whether an individual has a 
BRCA1 or BRCA2 variant is a genetic test. Similarly, a test to 
determine whether an individual has a genetic variant associated with 
hereditary nonpolyposis colorectal cancer is a genetic test. However, 
an HIV test, complete blood count, cholesterol test, liver function 
test, or test for the presence of alcohol or drugs is not a genetic 
test.
    (ii) The rules of this paragraph (a)(5) are illustrated by the 
following example:

    Example. (i) Facts. Individual A is a newborn covered under a 
group health plan. A undergoes a phenylketonuria (PKU) screening, 
which measures the concentration of a metabolite, phenylalanine, in 
A's blood. In PKU, a mutation occurs in the phenylalanine 
hydroxylase (PAH) gene which contains instructions for making the 
enzyme needed to break down the amino acid phenylalanine. 
Individuals with the mutation, who have a deficiency in the enzyme 
to break down phenylalanine, have high concentrations of 
phenylalanine.

    (ii) Conclusion. In this Example, the PKU screening is a genetic 
test with respect to A because the screening is an analysis of 
metabolites that detects a genetic mutation.
    (6)(i) Manifestation or manifested means, with respect to a 
disease, disorder, or pathological condition, that an individual has 
been or could reasonably be diagnosed with the disease, disorder, or 
pathological condition by a health care professional with appropriate 
training and expertise in the field of medicine involved. For purposes 
of this section, a disease, disorder, or pathological condition is not 
manifested if a diagnosis is based principally on genetic information.
    (ii) The rules of this paragraph (a)(6) are illustrated by the 
following examples:

    Example 1. (i) Facts. Individual A has a family medical history 
of diabetes. A begins to experience excessive sweating, thirst, and 
fatigue. A's physician examines A and orders blood glucose testing 
(which is not a genetic test). Based on the physician's examination, 
A's symptoms, and test results that show elevated levels of blood 
glucose, A's physician diagnoses A as having adult onset diabetes 
mellitus (Type 2 diabetes).
    (ii) Conclusion. In this Example 1, A has been diagnosed by a 
health care professional with appropriate training and expertise in 
the field of medicine involved. The diagnosis is not based 
principally on genetic information. Thus, Type 2 diabetes is 
manifested with respect to A.
    Example 2. (i) Facts. Individual B has several family members 
with colon cancer. One of them underwent genetic testing which 
detected a mutation in the MSH2 gene associated with hereditary 
nonpolyposis colorectal cancer (HNPCC). B's physician, a health care 
professional with appropriate training and expertise in the field of 
medicine involved, recommends that B undergo a targeted genetic test 
to look for the specific mutation found in B's relative to determine 
if B has an elevated risk for cancer. The genetic test with respect 
to B showed that B also carries the mutation and is at increased 
risk to develop colorectal and other cancers associated with HNPCC. 
B has a colonoscopy which indicates no signs of disease, and B has 
no symptoms.
    (ii) Conclusion. In this Example 2, because B has no signs or 
symptoms of colorectal cancer, B has not been and could not 
reasonably be diagnosed with HNPCC. Thus, HNPCC is not manifested 
with respect to B.
    Example 3. (i) Facts. Same facts as Example 2, except that B's 
colonoscopy and subsequent tests indicate the presence of HNPCC. 
Based on the colonoscopy and subsequent test results, B's physician 
makes a diagnosis of HNPCC.
    (ii) Conclusion. In this Example 3, HNPCC is manifested with 
respect to B because a health care professional with appropriate 
training and expertise in the field of medicine involved has made a 
diagnosis that is not based principally on genetic information.
    Example 4. (i) Facts. Individual C has a family member that has 
been diagnosed with Huntington's Disease. A genetic test indicates 
that C has the Huntington's Disease gene variant. At age 42, C 
begins suffering from occasional moodiness and disorientation, 
symptoms which are associated with Huntington's Disease. C is 
examined by a neurologist (a physician with appropriate training and 
expertise for diagnosing Huntington's Disease). The examination 
includes a clinical neurological exam. The results of the 
examination do not support a diagnosis of Huntington's Disease.
    (ii) Conclusion. In this Example 4, C is not and could not 
reasonably be diagnosed with Huntington's Disease by a health care 
professional with appropriate training and expertise. Therefore, 
Huntington's Disease is not manifested with respect to C.
    Example 5. (i) Facts. Same facts as Example 4, except that C 
exhibits additional neurological and behavioral symptoms, and the 
results of the examination support a diagnosis of Huntington's 
Disease with respect to C.
    (ii) Conclusion. In this Example 5, C could reasonably be 
diagnosed with Huntington's Disease by a health care professional 
with appropriate training and expertise. Therefore, Huntington's 
Disease is manifested with respect to C.

    (7) Underwriting purposes has the meaning given in paragraph (d)(1) 
of this section.
    (b) No group-based discrimination based on genetic information--(1) 
In general. For purposes of this section, a group health plan must not 
adjust premium or contribution amounts for any employer, or any group 
of similarly situated individuals under the plan, on the basis of 
genetic information. For this purpose, ``similarly situated 
individuals'' are those described in Sec.  54.9802-1(d).
    (2) Rule of construction. Nothing in paragraph (b)(1) of this 
section (or in paragraph (d)(1) or (d)(2) of this section) limits the 
ability of a group health plan to increase the premium for an

[[Page 51680]]

employer or for a group of similarly situated individuals under the 
plan based on the manifestation of a disease or disorder of an 
individual who is enrolled in the plan. In such a case, however, the 
manifestation of a disease or disorder in one individual cannot also be 
used as genetic information about other group members to further 
increase the premium for an employer or a group of similarly situated 
individuals under the plan.
    (3) Examples. The rules of this paragraph (b) are illustrated by 
the following examples:

    Example 1. (i) Facts. An employer sponsors a group health plan 
that provides coverage through a health insurance issuer. In order 
to determine the premium rate for the upcoming plan year, the issuer 
reviews the claims experience of individuals covered under the plan 
and other health status information of the individuals, including 
genetic information. The issuer finds that three individuals covered 
under the plan had unusually high claims experience. In addition, 
the issuer finds that the genetic information of two other 
individuals indicates the individuals have a higher probability of 
developing certain illnesses although the illnesses are not 
manifested at this time. The issuer quotes the plan a higher per-
participant rate because of both the genetic information and the 
higher claims experience.
    (ii) Conclusion. See Example 1 in 29 CFR 2590.702-1(b)(3) or 45 
CFR 146.122(b)(3) for a conclusion that the issuer violates the 
provisions of 29 CFR 2590.702-1(b) or 45 CFR 146.122(b) similar to 
the requirements of this paragraph (b) because the issuer adjusts 
the premium based on genetic information. However, if the adjustment 
related solely to claims experience, the adjustment would not 
violate the requirements of 29 CFR 2590.702-1 or 45 CFR 146.122 
similar to the requirements of this section (nor would it violate 
the requirements of paragraph (c) of 29 CFR 2590.702 or 45 CFR 
146.121 similar to the requirements of paragraph (c) of Sec.  
54.9802-1, which prohibits discrimination in individual premiums or 
contributions based on a health factor but permits increases in the 
group rate based on a health factor).
    Example 2. (i) Facts. An employer sponsors a group health plan 
that provides coverage through a health insurance issuer. In order 
to determine the premium rate for the upcoming plan year, the issuer 
reviews the claims experience of individuals covered under the plan 
and other health status information of the individuals, including 
genetic information. The issuer finds that Employee A has made 
claims for treatment of polycystic kidney disease. A also has two 
dependent children covered under the plan. The issuer quotes the 
plan a higher per-participant rate because of both A's claims 
experience and the family medical history of A's children (that is, 
the fact that A has the disease).
    (ii) Conclusion. See Example 2 in 29 CFR 2590.702-1(b)(3) or 45 
CFR 146.122(b)(3) for a conclusion that the issuer violates the 
provisions of 29 CFR 2590.702-1(b) or 45 CFR 146.122(b) similar to 
the requirements of this paragraph (b) because, by taking the 
likelihood that A's children may develop polycystic kidney disease 
into account in computing the rate for the plan, the issuer adjusts 
the premium based on genetic information relating to a condition 
that has not been manifested in A's children. However, the issuer 
does not violate the requirements of 29 CFR 2590.702-1(b) or 45 CFR 
146.122(b) similar to the requirements of this paragraph (b) by 
increasing the premium based on A's claims experience.

    (c) Limitation on requesting or requiring genetic testing--(1) 
General rule. Except as otherwise provided in this paragraph (c), a 
group health plan must not request or require an individual or a family 
member of the individual to undergo a genetic test.
    (2) Health care professional may recommend a genetic test. Nothing 
in paragraph (c)(1) of this section limits the authority of a health 
care professional who is providing health care services to an 
individual to request that the individual undergo a genetic test.
    (3) Examples. The rules of paragraphs (c)(1) and (c)(2) of this 
section are illustrated by the following examples:

    Example 1. (i) Facts. Individual A goes to a physician for a 
routine physical examination. The physician reviews A's family 
medical history and A informs the physician that A's mother has been 
diagnosed with Huntington's Disease. The physician advises A that 
Huntington's Disease is hereditary and recommends that A undergo a 
genetic test.
    (ii) Conclusion. In this Example 1, the physician is a health 
care professional who is providing health care services to A. 
Therefore, the physician's recommendation that A undergo the genetic 
test does not violate this paragraph (c).
    Example 2. (i) Facts. Individual B is covered by a health 
maintenance organization (HMO). B is a child being treated for 
leukemia. B's physician, who is employed by the HMO, is considering 
a treatment plan that includes six-mercaptopurine, a drug for 
treating leukemia in most children. However, the drug could be fatal 
if taken by a small percentage of children with a particular gene 
variant. B's physician recommends that B undergo a genetic test to 
detect this variant before proceeding with this course of treatment.
    (ii) Conclusion. In this Example 2, even though the physician is 
employed by the HMO, the physician is nonetheless a health care 
professional who is providing health care services to B. Therefore, 
the physician's recommendation that B undergo the genetic test does 
not violate this paragraph (c).

    (4) Determination regarding payment--(i) In general. As provided in 
this paragraph (c)(4), nothing in paragraph (c)(1) of this section 
precludes a plan from obtaining and using the results of a genetic test 
in making a determination regarding payment. For this purpose, 
``payment'' has the meaning given such term in 45 CFR 164.501 of the 
privacy regulations issued under the Health Insurance Portability and 
Accountability Act. Thus, if a plan conditions payment for an item or 
service based on its medical appropriateness and the medical 
appropriateness of the item or service depends on the genetic makeup of 
a patient, then the plan is permitted to condition payment for the item 
or service on the outcome of a genetic test. The plan may also refuse 
payment if the patient does not undergo the genetic test.
    (ii) Limitation. A plan is permitted to request only the minimum 
amount of information necessary to make a determination regarding 
payment. The minimum amount of information necessary is determined in 
accordance with the minimum necessary standard in 45 CFR 164.502(b) of 
the privacy regulations issued under the Health Insurance Portability 
and Accountability Act.
    (iii) Examples. See paragraph (e) of this section for examples 
illustrating the rules of this paragraph (c)(4), as well as other 
provisions of this section.
    (5) Research exception. Notwithstanding paragraph (c)(1) of this 
section, a plan may request, but not require, that a participant or 
beneficiary undergo a genetic test if all of the conditions of this 
paragraph (c)(5) are met:
    (i) Research in accordance with Federal regulations and applicable 
State or local law or regulations. The plan makes the request pursuant 
to research, as defined in 45 CFR 46.102(d), that complies with 45 CFR 
Part 46 or equivalent Federal regulations, and any applicable State or 
local law or regulations for the protection of human subjects in 
research.
    (ii) Written request for participation in research. The plan makes 
the request in writing, and the request clearly indicates to each 
participant or beneficiary (or, in the case of a minor child, to the 
legal guardian of the beneficiary) that--
    (A) Compliance with the request is voluntary; and
    (B) Noncompliance will have no effect on eligibility for benefits 
(as described in Sec.  54.9802-1(b)(1)) or premium or contribution 
amounts.
    (iii) Prohibition on underwriting. No genetic information collected 
or acquired under this paragraph (c)(5) can be used for underwriting 
purposes (as described in paragraph (d)(1) of this section).

[[Page 51681]]

    (iv) Notice to Federal agencies. The plan completes a copy of the 
``Notice of Research Exception under the Genetic Information 
Nondiscrimination Act'' authorized by the Secretary and provides the 
notice to the address specified in the instructions thereto.
    (d) Prohibitions on collection of genetic information--(1) For 
underwriting purposes--(i) General rule. A group health plan must not 
collect (as defined in paragraph (a)(1) of this section) genetic 
information for underwriting purposes. See paragraph (e) of this 
section for examples illustrating the rules of this paragraph (d)(1), 
as well as other provisions of this section.
    (ii) Underwriting purposes defined. Subject to paragraph 
(d)(1)(iii) of this section, underwriting purposes means, with respect 
to any group health plan, or health insurance coverage offered in 
connection with a group health plan--
    (A) Rules for, or determination of, eligibility (including 
enrollment and continued eligibility) for benefits under the plan or 
coverage as described in Sec.  54.9802-1(b)(1)(ii) (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);
    (B) The 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);
    (C) The application of any preexisting condition exclusion under 
the plan or coverage; and
    (D) Other activities related to the creation, renewal, or 
replacement of a contract of health insurance or health benefits.
    (iii) Medical appropriateness. If an individual seeks a benefit 
under a group health plan, the plan may limit or exclude the benefit 
based on whether the benefit is medically appropriate, and the 
determination of whether the benefit is medically appropriate is not 
within the meaning of underwriting purposes. Accordingly, if an 
individual seeks a benefit under the plan and the plan conditions the 
benefit based on its medical appropriateness and the medical 
appropriateness of the benefit depends on genetic information of the 
individual, then the plan is permitted to condition the benefit on the 
genetic information. A plan is permitted to request only the minimum 
amount of genetic information necessary to determine medical 
appropriateness. The plan may deny the benefit if the patient does not 
provide the genetic information required to determine medical 
appropriateness. If an individual is not seeking a benefit, the medical 
appropriateness exception of this paragraph (d)(1)(iii) to the 
definition of underwriting purposes does not apply. See paragraph (e) 
of this section for examples illustrating the medical appropriateness 
provisions of this paragraph (d)(1)(iii), as well as other provisions 
of this section.
    (2) Prior to or in connection with enrollment--(i) In general. A 
group health plan must not collect genetic information with respect to 
any individual prior to that individual's effective date of coverage 
under that plan, nor in connection with the rules for eligibility (as 
defined in Sec.  54.9802-1(b)(1)(ii)) that apply to that individual. 
Whether or not an individual's information is collected prior to that 
individual's effective date of coverage is determined at the time of 
collection.
    (ii) Incidental collection exception--(A) In general. If a group 
health plan obtains genetic information incidental to the collection of 
other information concerning any individual, the collection is not a 
violation of this paragraph (d)(2), as long as the collection is not 
for underwriting purposes in violation of paragraph (d)(1) of this 
section.

    (B) Limitation. The incidental collection exception of this 
paragraph (d)(2)(ii) does not apply in connection with any collection 
where it is reasonable to anticipate that health information will be 
received, unless the collection explicitly states that genetic 
information should not be provided.
    (3) Examples. The rules of this paragraph (d) are illustrated by 
the following examples:

    Example 1. (i) Facts. A group health plan provides a premium 
reduction to enrollees who complete a health risk assessment. The 
health risk assessment is requested to be completed after 
enrollment. Whether or not it is completed or what responses are 
given on it has no effect on an individual's enrollment status, or 
on the enrollment status of members of the individual's family. The 
health risk assessment includes questions about the individual's 
family medical history.
    (ii) Conclusion. In this Example 1, the health risk assessment 
includes a request for genetic information (that is, the 
individual's family medical history). Because completing the health 
risk assessment results in a premium reduction, the request for 
genetic information is for underwriting purposes. Consequently, the 
request violates the prohibition on the collection of genetic 
information in paragraph (d)(1) of this section.
    Example 2. (i) Facts. The same facts as Example 1, except there 
is no premium reduction or any other reward for completing the 
health risk assessment.
    (ii) Conclusion. In this Example 2, the request is not for 
underwriting purposes, nor is it prior to or in connection with 
enrollment. Therefore, it does not violate the prohibition on the 
collection of genetic information in this paragraph (d).
    Example 3. (i) Facts. A group health plan requests that 
enrollees complete a health risk assessment prior to enrollment, and 
includes questions about the individual's family medical history. 
There is no reward or penalty for completing the health risk 
assessment.
    (ii) Conclusion. In this Example 3, because the health risk 
assessment includes a request for genetic information (that is, the 
individual's family medical history), and requests the information 
prior to enrollment, the request violates the prohibition on the 
collection of genetic information in paragraph (d)(2) of this 
section. Moreover, because it is a request for genetic information, 
it is not an incidental collection under paragraph (d)(2)(ii) of 
this section.
    Example 4. (i) Facts. The facts are the same as in Example 1, 
except there is no premium reduction or any other reward given for 
completion of the health risk assessment. However, certain people 
completing the health risk assessment may become eligible for 
additional benefits under the plan by being enrolled in a disease 
management program based on their answers to questions about family 
medical history. Other people may become eligible for the disease 
management program based solely on their answers to questions about 
their individual medical history.
    (ii) Conclusion. In this Example 4, the request for information 
about an individual's family medical history could result in the 
individual being eligible for benefits for which the individual 
would not otherwise be eligible. Therefore, the questions about 
family medical history on the health risk assessment are a request 
for genetic information for underwriting purposes and are prohibited 
under this paragraph (d). Although the plan conditions eligibility 
for the disease management program based on determinations of 
medical appropriateness, the exception for determinations of medical 
appropriateness does not apply because the individual is not seeking 
benefits.
    Example 5. (i) Facts. A group health plan requests enrollees to 
complete two distinct health risk assessments (HRAs) after and 
unrelated to enrollment. The first HRA instructs the individual to 
answer only for the individual and not for the individual's family. 
The first HRA does not ask about any genetic tests the individual 
has undergone or any genetic services the individual has received. 
The plan offers a reward for completing the first HRA. The second 
HRA asks about family medical history and the results of genetic 
tests the individual has undergone. The plan offers no reward for 
completing the second HRA and the instructions make clear that 
completion of the second HRA is wholly voluntary and will not affect 
the reward given for completion of the first HRA.
    (ii) Conclusion. In this Example 5, no genetic information is 
collected in

[[Page 51682]]

connection with the first HRA, which offers a reward, and no 
benefits or other rewards are conditioned on the request for genetic 
information in the second HRA. Consequently, the request for genetic 
information in the second HRA is not for underwriting purposes, and 
the two HRAs do not violate the prohibition on the collection of 
genetic information in this paragraph (d).
    Example 6. (i) Facts. A group health plan waives its annual 
deductible for enrollees who complete an HRA. The HRA is requested 
to be completed after enrollment. Whether or not the HRA is 
completed or what responses are given on it has no effect on an 
individual's enrollment status, or on the enrollment status of 
members of the individual's family. The HRA does not include any 
direct questions about the individual's genetic information 
(including family medical history). However, the last question 
reads, ``Is there anything else relevant to your health that you 
would like us to know or discuss with you?''
    (ii) Conclusion. In this Example 6, the plan's request for 
medical information does not explicitly state that genetic 
information should not be provided. Therefore, any genetic 
information collected in response to the question is not within the 
incidental collection exception and is prohibited under this 
paragraph (d).
    Example 7. (i) Facts. Same facts as Example 6, except that the 
last question goes on to state, ``In answering this question, you 
should not include any genetic information. That is, please do not 
include any family medical history or any information related to 
genetic testing, genetic services, genetic counseling, or genetic 
diseases for which you believe you may be at risk.''
    (ii) Conclusion. In this Example 7, the plan's request for 
medical information explicitly states that genetic information 
should not be provided. Therefore, any genetic information collected 
in response to the question is within the incidental collection 
exception. However, the plan may not use any genetic information it 
obtains incidentally for underwriting purposes.
    Example 8. (i) Facts. Issuer M acquires Issuer N. M requests N's 
records, stating that N should not provide genetic information and 
should review the records to excise any genetic information. N 
assembles the data requested by M and, although N reviews it to 
delete genetic information, the data from a specific region included 
some individuals' family medical history. Consequently, M receives 
genetic information about some of N's covered individuals.
    (ii) Conclusion. In this Example 8, M's request for health 
information explicitly stated that genetic information should not be 
provided. See Example 8 in 29 CFR 2590.702-1(d)(3) or 45 CFR 
146.122(d)(3) for a conclusion that the collection of genetic 
information was within the incidental collection exception of 29 CFR 
2590.702-1(d)(2)(ii) or 45 CFR 146.122(d)(ii) similar to the 
incidental exception of paragraph (d)(2)(ii) of this section. See 
Example 8 in 29 CFR 2590.702-1(d)(3) or 45 CFR 146.122(d)(3) also 
for a caveat that M may not use the genetic information it obtained 
incidentally for underwriting purposes.

    (e) Examples regarding determinations of medical appropriateness. 
The application of the rules of paragraphs (c) and (d) of this section 
to plan determinations of medical appropriateness is illustrated by the 
following examples:

    Example 1. (i) Facts. Individual A's group health plan covers 
genetic testing for celiac disease for individuals who have family 
members with this condition. After A's son is diagnosed with celiac 
disease, A undergoes a genetic test and promptly submits a claim for 
the test to A's issuer for reimbursement. The issuer asks A to 
provide the results of the genetic test before the claim is paid.
    (ii) Conclusion. See Example 1 in 29 CFR 2590.702-1(e) or 45 CFR 
146.122(e) for a conclusion under the rules of paragraph (c)(4) of 
29 CFR 2590.702-1 or 45 CFR 146.122 similar to the rules of 
paragraph (c)(4) of this section that the issuer is permitted to 
request only the minimum amount of information necessary to make a 
decision regarding payment. Because the results of the test are not 
necessary for the issuer to make a decision regarding the payment of 
A's claim, the conclusion in Example 1 in 29 CFR 2590.702-1(e) or 45 
CFR 146.122(e) concludes that the issuer's request for the results 
of the genetic test violates paragraph (c) of 29 CFR 2590.702-1 or 
45 CFR 146.122 similar to paragraph (c) of this section.
    Example 2. (i) Facts. Individual B's group health plan covers a 
yearly mammogram for participants and beneficiaries starting at age 
40, or at age 30 for those with increased risk for breast cancer, 
including individuals with BRCA1 or BRCA2 gene mutations. B is 33 
years old and has the BRCA2 mutation. B undergoes a mammogram and 
promptly submits a claim to B's plan for reimbursement. Following an 
established policy, the plan asks B for evidence of increased risk 
of breast cancer, such as the results of a genetic test or a family 
history of breast cancer, before the claim for the mammogram is 
paid. This policy is applied uniformly to all similarly situated 
individuals and is not directed at individuals based on any genetic 
information.
    (ii) Conclusion. In this Example 2, the plan does not violate 
paragraphs (c) or (d) of this section. Under paragraph (c), the plan 
is permitted to request and use the results of a genetic test to 
make a determination regarding payment, provided the plan requests 
only the minimum amount of information necessary. Because the 
medical appropriateness of the mammogram depends on the genetic 
makeup of the patient, the minimum amount of information necessary 
includes the results of the genetic test. Similarly, the plan does 
not violate paragraph (d) of this section because the plan is 
permitted to request genetic information in making a determination 
regarding the medical appropriateness of a claim if the genetic 
information is necessary to make the determination (and if the 
genetic information is not used for underwriting purposes).
    Example 3. (i) Facts. Individual C was previously diagnosed with 
and treated for breast cancer, which is currently in remission. In 
accordance with the recommendation of C's physician, C has been 
taking a regular dose of tamoxifen to help prevent a recurrence. C's 
group health plan adopts a new policy requiring patients taking 
tamoxifen to undergo a genetic test to ensure that tamoxifen is 
medically appropriate for their genetic makeup. In accordance with, 
at the time, the latest scientific research, tamoxifen is not 
helpful in up to 7 percent of breast cancer patients, those with 
certain variations of the gene for making the CYP2D6 
enzyme. If a patient has a gene variant making tamoxifen not 
medically appropriate, the plan does not pay for the tamoxifen 
prescription.
    (ii) Conclusion. In this Example 3, the plan does not violate 
paragraph (c) of this section if it conditions future payments for 
the tamoxifen prescription on C's undergoing a genetic test to 
determine what genetic markers C has for making the 
CYP2D6 enzyme. Nor does the plan violate paragraph (c) of 
this section if the plan refuses future payment if the results of 
the genetic test indicate that tamoxifen is not medically 
appropriate for C.
    Example 4. (i) Facts. A group health plan offers a diabetes 
disease management program to all similarly situated individuals for 
whom it is medically appropriate based on whether the individuals 
have or are at risk for diabetes. The program provides enhanced 
benefits related only to diabetes for individuals who qualify for 
the program. The plan sends out a notice to all participants that 
describes the diabetes disease management program and explains the 
terms for eligibility. Individuals interested in enrolling in the 
program are advised to contact the plan to demonstrate that they 
have diabetes or that they are at risk for diabetes. For individuals 
who do not currently have diabetes, genetic information may be used 
to demonstrate that an individual is at risk.
    (ii) Conclusion. In this Example 4, the plan may condition 
benefits under the disease management program upon a showing by an 
individual that the individual is at risk for diabetes, even if such 
showing may involve genetic information, provided that the plan 
requests genetic information only when necessary to make a 
determination regarding whether the disease management program is 
medically appropriate for the individual and only requests the 
minimum amount of information necessary to make that determination.
    Example 5. (i) Facts. Same facts as Example 4, except that the 
plan includes a questionnaire that asks about the occurrence of 
diabetes in members of the individual's family as part of the notice 
describing the disease management program.
    (ii) Conclusion. In this Example 5, the plan violates the 
requirements of paragraph (d)(1) of this section because the 
requests for genetic information are not limited to those situations 
in which it is necessary to make a determination regarding whether 
the disease management program is medically appropriate for the 
individuals.
    Example 6. (i) Facts. Same facts as Example 4, except the 
disease management program provides an enhanced benefit in the

[[Page 51683]]

form of a lower annual deductible to individuals under the program; 
the lower deductible applies with respect to all medical expenses 
incurred by the individual. Thus, whether or not a claim relates to 
diabetes, the individual is provided with a lower deductible based 
on the individual providing the plan with genetic information.
    (ii) Conclusion. In this Example 6, because the enhanced 
benefits include benefits not related to the determination of 
medical appropriateness, making available the enhanced benefits is 
within the meaning of underwriting purposes. Accordingly, the plan 
may not request or require genetic information (including family 
history information) in determining eligibility for enhanced 
benefits under the program because such a request would be for 
underwriting purposes and would violate paragraph (d)(1) of this 
section.

    (f) Effective/applicability date. This section applies for plan 
years beginning on or after December 7, 2009.
    (g) Expiration date. This section expires on or before October 1, 
2012.

Linda E. Stiff,
Deputy Commissioner for Services and Enforcement, Internal Revenue 
Service.
    Approved: September 11, 2009.
Michael Mundaca,
Acting Assistant Secretary of the Treasury (Tax Policy).

Employee Benefits Security Administration

29 CFR Chapter XXV

0
For the reasons stated in the preamble, 29 CFR Part 2590 is amended as 
follows:

PART 2590--RULES AND REGULATIONS FOR GROUP HEALTH PLANS

0
1. The authority citation for Part 2590 is amended to read as follows:

    Authority: 29 U.S.C. 1027, 1059, 1135, 1161-1168, 1169, 1181-
1183, 1181 note, 1185, 1185a, 1185b, 1191, 1191a, 1191b, and 1191c; 
sec. 101(g), Public Law 104-191, 110 Stat. 1936; sec. 401(b), Public 
Law 105-200, 112 Stat. 645 (42 U.S.C. 651 note); sec. 101(f), Public 
Law 110-233, 122 Stat. 881; Secretary of Labor's Order 1-2003, 68 FR 
5374 (Feb. 3, 2003).


0
2. Section 2590.701-1 is amended by revising paragraph (b)(6) and 
adding paragraph (b)(7) to read as follows:


Sec.  2590.701-1  Basis and scope.

* * * * *
    (b) * * *
    (6) Additional requirements prohibiting discrimination based on 
genetic information.
    (7) Use of an affiliation period by an HMO as an alternative to a 
preexisting condition exclusion.
* * * * *

0
3. Section 2590.701-2 is amended by revising the definition of genetic 
information to read as follows:


Sec.  2590.701-2  Definitions.

* * * * *
    Genetic information has the meaning given the term in Sec.  
2590.702-1(a)(3) of this Part.
* * * * *

0
4. Section 2590.702 is amended by revising paragraphs (a)(1)(vi), 
(c)(2)(i), and (c)(2)(iii) to read as follows:


Sec.  2590.702  Prohibiting discrimination against participants and 
beneficiaries based on a health factor.

    (a) * * *
    (1) * * *
    (vi) Genetic information, as defined in Sec.  2590.702-1(a)(3) of 
this Part.
* * * * *
    (c) * * *
    (2) * * * (i) Group rating based on health factors not restricted 
under this section. Nothing in this section restricts the aggregate 
amount that an employer may be charged for coverage under a group 
health plan. But see Sec.  2590.702-1(b) of this Part, which prohibits 
adjustments in group premium or contribution rates based on genetic 
information.
* * * * *
    (iii) Examples. The rules of this paragraph (c)(2) are illustrated 
by the following examples:

    Example 1. (i) Facts. An employer sponsors a group health plan 
and purchases coverage from a health insurance issuer. In order to 
determine the premium rate for the upcoming plan year, the issuer 
reviews the claims experience of individuals covered under the plan. 
The issuer finds that Individual F had significantly higher claims 
experience than similarly situated individuals in the plan. The 
issuer quotes the plan a higher per-participant rate because of F's 
claims experience.
    (ii) Conclusion. In this Example 1, the issuer does not violate 
the provisions of this paragraph (c)(2) because the issuer blends 
the rate so that the employer is not quoted a higher rate for F than 
for a similarly situated individual based on F's claims experience. 
(However, if the issuer used genetic information in computing the 
group rate, it would violate Sec.  2590.702-1(b) of this Part.)

* * * * *

0
5. Add Sec.  2590.702-1 to read as follows:


Sec.  2590.702-1  Additional requirements prohibiting discrimination 
based on genetic information.

    (a) Definitions. Unless otherwise provided, the definitions in this 
paragraph (a) govern in applying the provisions of this section.
    (1) Collect means, with respect to information, to request, 
require, or purchase such information.
    (2) Family member means, with respect to an individual--
    (i) A dependent (as defined for purposes of Sec.  2590.701-2 of 
this Part) of the individual; or
    (ii) Any other person who is a first-degree, second-degree, third-
degree, or fourth-degree relative of the individual or of a dependent 
of the individual. Relatives by affinity (such as by marriage or 
adoption) are treated the same as relatives by consanguinity (that is, 
relatives who share a common biological ancestor). In determining the 
degree of the relationship, relatives by less than full consanguinity 
(such as half-siblings, who share only one parent) are treated the same 
as relatives by full consanguinity (such as siblings who share both 
parents).
    (A) First-degree relatives include parents, spouses, siblings, and 
children.
    (B) Second-degree relatives include grandparents, grandchildren, 
aunts, uncles, nephews, and nieces.
    (C) Third-degree relatives include great-grandparents, great-
grandchildren, great aunts, great uncles, and first cousins.
    (D) Fourth-degree relatives include great-great grandparents, 
great-great grandchildren, and children of first cousins.
    (3) Genetic information means--(i) Subject to paragraphs (a)(3)(ii) 
and (a)(3)(iii) of this section, with respect to an individual, 
information about--
    (A) The individual's genetic tests (as defined in paragraph (a)(5) 
of this section);
    (B) The genetic tests of family members of the individual;
    (C) The manifestation (as defined in paragraph (a)(6) of this 
section) of a disease or disorder in family members of the individual; 
or
    (D) Any request for, or receipt of, genetic services (as defined in 
paragraph (a)(4) of this section), or participation in clinical 
research which includes genetic services, by the individual or any 
family member of the individual.
    (ii) The term genetic information does not include information 
about the sex or age of any individual.
    (iii) The term genetic information includes--
    (A) With respect to a pregnant woman (or a family member of the 
pregnant woman), genetic information of any fetus carried by the 
pregnant woman; and
    (B) With respect to an individual (or a family member of the 
individual) who is utilizing an assisted reproductive technology, 
genetic information of any

[[Page 51684]]

embryo legally held by the individual or family member.
    (4) Genetic services means--
    (i) A genetic test, as defined in paragraph (a)(5) of this section;
    (ii) Genetic counseling (including obtaining, interpreting, or 
assessing genetic information); or
    (iii) Genetic education.
    (5)(i) Genetic test means an analysis of human DNA, RNA, 
chromosomes, proteins, or metabolites, if the analysis detects 
genotypes, mutations, or chromosomal changes. However, a genetic test 
does not include an analysis of proteins or metabolites that is 
directly related to a manifested disease, disorder, or pathological 
condition. Accordingly, a test to determine whether an individual has a 
BRCA1 or BRCA2 variant is a genetic test. Similarly, a test to 
determine whether an individual has a genetic variant associated with 
hereditary nonpolyposis colorectal cancer is a genetic test. However, 
an HIV test, complete blood count, cholesterol test, liver function 
test, or test for the presence of alcohol or drugs is not a genetic 
test.
    (ii) The rules of this paragraph (a)(5) are illustrated by the 
following example:

    Example. (i) Facts. Individual A is a newborn covered under a 
group health plan. A undergoes a phenylketonuria (PKU) screening, 
which measures the concentration of a metabolite, phenylalanine, in 
A's blood. In PKU, a mutation occurs in the phenylalanine 
hydroxylase (PAH) gene which contains instructions for making the 
enzyme needed to break down the amino acid phenylalanine. 
Individuals with the mutation, who have a deficiency in the enzyme 
to break down phenylalanine, have high concentrations of 
phenylalanine.
    (ii) Conclusion. In this Example, the PKU screening is a genetic 
test with respect to A because the screening is an analysis of 
metabolites that detects a genetic mutation.

    (6)(i) Manifestation or manifested means, with respect to a 
disease, disorder, or pathological condition, that an individual has 
been or could reasonably be diagnosed with the disease, disorder, or 
pathological condition by a health care professional with appropriate 
training and expertise in the field of medicine involved. For purposes 
of this section, a disease, disorder, or pathological condition is not 
manifested if a diagnosis is based principally on genetic information.
    (ii) The rules of this paragraph (a)(6) are illustrated by the 
following examples:

    Example 1. (i) Facts. Individual A has a family medical history 
of diabetes. A begins to experience excessive sweating, thirst, and 
fatigue. A's physician examines A and orders blood glucose testing 
(which is not a genetic test). Based on the physician's examination, 
A's symptoms, and test results that show elevated levels of blood 
glucose, A's physician diagnoses A as having adult onset diabetes 
mellitus (Type 2 diabetes).
    (ii) Conclusion. In this Example 1, A has been diagnosed by a 
health care professional with appropriate training and expertise in 
the field of medicine involved. The diagnosis is not based 
principally on genetic information. Thus, Type 2 diabetes is 
manifested with respect to A.
    Example 2. (i) Facts. Individual B has several family members 
with colon cancer. One of them underwent genetic testing which 
detected a mutation in the MSH2 gene associated with hereditary 
nonpolyposis colorectal cancer (HNPCC). B's physician, a health care 
professional with appropriate training and expertise in the field of 
medicine involved, recommends that B undergo a targeted genetic test 
to look for the specific mutation found in B's relative to determine 
if B has an elevated risk for cancer. The genetic test with respect 
to B showed that B also carries the mutation and is at increased 
risk to develop colorectal and other cancers associated with HNPCC. 
B has a colonoscopy which indicates no signs of disease, and B has 
no symptoms.
    (ii) Conclusion. In this Example 2, because B has no signs or 
symptoms of colorectal cancer, B has not been and could not 
reasonably be diagnosed with HNPCC. Thus, HNPCC is not manifested 
with respect to B.
    Example 3. (i) Facts. Same facts as Example 2, except that B's 
colonoscopy and subsequent tests indicate the presence of HNPCC. 
Based on the colonoscopy and subsequent test results, B's physician 
makes a diagnosis of HNPCC.
    (ii) Conclusion. In this Example 3, HNPCC is manifested with 
respect to B because a health care professional with appropriate 
training and expertise in the field of medicine involved has made a 
diagnosis that is not based principally on genetic information.
    Example 4. (i) Facts. Individual C has a family member that has 
been diagnosed with Huntington's Disease. A genetic test indicates 
that C has the Huntington's Disease gene variant. At age 42, C 
begins suffering from occasional moodiness and disorientation, 
symptoms which are associated with Huntington's Disease. C is 
examined by a neurologist (a physician with appropriate training and 
expertise for diagnosing Huntington's Disease). The examination 
includes a clinical neurological exam. The results of the 
examination do not support a diagnosis of Huntington's Disease.
    (ii) Conclusion. In this Example 4, C is not and could not 
reasonably be diagnosed with Huntington's Disease by a health care 
professional with appropriate training and expertise. Therefore, 
Huntington's Disease is not manifested with respect to C.
    Example 5. (i) Facts. Same facts as Example 4, except that C 
exhibits additional neurological and behavioral symptoms, and the 
results of the examination support a diagnosis of Huntington's 
Disease with respect to C.
    (ii) Conclusion. In this Example 5, C could reasonably be 
diagnosed with Huntington's Disease by a health care professional 
with appropriate training and expertise. Therefore, Huntington's 
Disease is manifested with respect to C.

    (7) Underwriting purposes has the meaning given in paragraph (d)(1) 
of this section.
    (b) No group-based discrimination based on genetic information--(1) 
In general. For purposes of this section, a group health plan, and a 
health insurance issuer offering health insurance coverage in 
connection with a group health plan, must not adjust premium or 
contribution amounts for the plan, or any group of similarly situated 
individuals under the plan, on the basis of genetic information. For 
this purpose, ``similarly situated individuals'' are those described in 
Sec.  2590.702(d) of this Part.
    (2) Rule of construction. Nothing in paragraph (b)(1) of this 
section (or in paragraph (d)(1) or (d)(2) of this section) limits the 
ability of a health insurance issuer offering health insurance coverage 
in connection with a group health plan to increase the premium for a 
group health plan or a group of similarly situated individuals under 
the plan based on the manifestation of a disease or disorder of an 
individual who is enrolled in the plan. In such a case, however, the 
manifestation of a disease or disorder in one individual cannot also be 
used as genetic information about other group members to further 
increase the premium for a group health plan or a group of similarly 
situated individuals under the plan.
    (3) Examples. The rules of this paragraph (b) are illustrated by 
the following examples:

    Example 1. (i) Facts. An employer sponsors a group health plan 
that provides coverage through a health insurance issuer. In order 
to determine the premium rate for the upcoming plan year, the issuer 
reviews the claims experience of individuals covered under the plan 
and other health status information of the individuals, including 
genetic information. The issuer finds that three individuals covered 
under the plan had unusually high claims experience. In addition, 
the issuer finds that the genetic information of two other 
individuals indicates the individuals have a higher probability of 
developing certain illnesses although the illnesses are not 
manifested at this time. The issuer quotes the plan a higher per-
participant rate because of both the genetic information and the 
higher claims experience.
    (ii) Conclusion. In this Example 1, the issuer violates the 
provisions of this paragraph (b) because the issuer adjusts the 
premium based on genetic information. However, if the adjustment 
related solely to claims experience, the adjustment would not 
violate the requirements of this section (nor would it violate the 
requirements of paragraph (c) of Sec.  2590.702 of this Part,

[[Page 51685]]

which prohibits discrimination in individual premiums or 
contributions based on a health factor but permits increases in the 
group rate based on a health factor).
    Example 2. (i) Facts. An employer sponsors a group health plan 
that provides coverage through a health insurance issuer. In order 
to determine the premium rate for the upcoming plan year, the issuer 
reviews the claims experience of individuals covered under the plan 
and other health status information of the individuals, including 
genetic information. The issuer finds that Employee A has made 
claims for treatment of polycystic kidney disease. A also has two 
dependent children covered under the plan. The issuer quotes the 
plan a higher per-participant rate because of both A's claims 
experience and the family medical history of A's children (that is, 
the fact that A has the disease).
    (ii) Conclusion. In this Example 2, the issuer violates the 
provisions of this paragraph (b) because, by taking the likelihood 
that A's children may develop polycystic kidney disease into account 
in computing the rate for the plan, the issuer adjusts the premium 
based on genetic information relating to a condition that has not 
been manifested in A's children. However, it is permissible for the 
issuer to increase the premium based on A's claims experience.

    (c) Limitation on requesting or requiring genetic testing--(1) 
General rule. Except as otherwise provided in this paragraph (c), a 
group health plan, and a health insurance issuer offering health 
insurance coverage in connection with a group health plan, must not 
request or require an individual or a family member of the individual 
to undergo a genetic test.
    (2) Health care professional may recommend a genetic test. Nothing 
in paragraph (c)(1) of this section limits the authority of a health 
care professional who is providing health care services to an 
individual to request that the individual undergo a genetic test.
    (3) Examples. The rules of paragraphs (c)(1) and (2) of this 
section are illustrated by the following examples:

    Example 1. (i) Facts. Individual A goes to a physician for a 
routine physical examination. The physician reviews A's family 
medical history and A informs the physician that A's mother has been 
diagnosed with Huntington's Disease. The physician advises A that 
Huntington's Disease is hereditary and recommends that A undergo a 
genetic test.
    (ii) Conclusion. In this Example 1, the physician is a health 
care professional who is providing health care services to A. 
Therefore, the physician's recommendation that A undergo the genetic 
test does not violate this paragraph (c).
    Example 2. (i) Facts. Individual B is covered by a health 
maintenance organization (HMO). B is a child being treated for 
leukemia. B's physician, who is employed by the HMO, is considering 
a treatment plan that includes six-mercaptopurine, a drug for 
treating leukemia in most children. However, the drug could be fatal 
if taken by a small percentage of children with a particular gene 
variant. B's physician recommends that B undergo a genetic test to 
detect this variant before proceeding with this course of treatment.
    (ii) Conclusion. In this Example 2, even though the physician is 
employed by the HMO, the physician is nonetheless a health care 
professional who is providing health care services to B. Therefore, 
the physician's recommendation that B undergo the genetic test does 
not violate this paragraph (c).

    (4) Determination regarding payment. (i) In general. As provided in 
this paragraph (c)(4), nothing in paragraph (c)(1) of this section 
precludes a plan or issuer from obtaining and using the results of a 
genetic test in making a determination regarding payment. For this 
purpose, ``payment'' has the meaning given such term in 45 CFR 164.501 
of the privacy regulations issued under the Health Insurance 
Portability and Accountability Act. Thus, if a plan or issuer 
conditions payment for an item or service based on its medical 
appropriateness and the medical appropriateness of the item or service 
depends on the genetic makeup of a patient, then the plan or issuer is 
permitted to condition payment for the item or service on the outcome 
of a genetic test. The plan or issuer may also refuse payment if the 
patient does not undergo the genetic test.
    (ii) Limitation. A plan or issuer is permitted to request only the 
minimum amount of information necessary to make a determination 
regarding payment. The minimum amount of information necessary is 
determined in accordance with the minimum necessary standard in 45 CFR 
164.502(b) of the privacy regulations issued under the Health Insurance 
Portability and Accountability Act.
    (iii) Examples. See paragraph (e) of this section for examples 
illustrating the rules of this paragraph (c)(4), as well as other 
provisions of this section.
    (5) Research exception. Notwithstanding paragraph (c)(1) of this 
section, a plan or issuer may request, but not require, that a 
participant or beneficiary undergo a genetic test if all of the 
conditions of this paragraph (c)(5) are met:
    (i) Research in accordance with Federal regulations and applicable 
State or local law or regulations. The plan or issuer makes the request 
pursuant to research, as defined in 45 CFR 46.102(d), that complies 
with 45 CFR Part 46 or equivalent Federal regulations, and any 
applicable State or local law or regulations for the protection of 
human subjects in research.
    (ii) Written request for participation in research. The plan or 
issuer makes the request in writing, and the request clearly indicates 
to each participant or beneficiary (or, in the case of a minor child, 
to the legal guardian of the beneficiary) that--
    (A) Compliance with the request is voluntary; and
    (B) Noncompliance will have no effect on eligibility for benefits 
(as described in Sec.  2590.702(b)(1) of this Part) or premium or 
contribution amounts.
    (iii) Prohibition on underwriting. No genetic information collected 
or acquired under this paragraph (c)(5) can be used for underwriting 
purposes (as described in paragraph (d)(1) of this section).
    (iv) Notice to Federal agencies. The plan or issuer completes a 
copy of the ``Notice of Research Exception under the Genetic 
Information Nondiscrimination Act'' authorized by the Secretary and 
provides the notice to the address specified in the instructions 
thereto.
    (d) Prohibitions on collection of genetic information--(1) For 
underwriting purposes--(i) General rule. A group health plan, and a 
health insurance issuer offering health insurance coverage in 
connection with a group health plan, must not collect (as defined in 
paragraph (a)(1) of this section) genetic information for underwriting 
purposes. See paragraph (e) of this section for examples illustrating 
the rules of this paragraph (d)(1), as well as other provisions of this 
section.
    (ii) Underwriting purposes defined. Subject to paragraph 
(d)(1)(iii) of this section, underwriting purposes means, with respect 
to any group health plan, or health insurance coverage offered in 
connection with a group health plan--
    (A) Rules for, or determination of, eligibility (including 
enrollment and continued eligibility) for benefits under the plan or 
coverage as described in Sec.  2590.702(b)(1)(ii) of this Part 
(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);
    (B) The 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);

[[Page 51686]]

    (C) The application of any preexisting condition exclusion under 
the plan or coverage; and
    (D) Other activities related to the creation, renewal, or 
replacement of a contract of health insurance or health benefits.
    (iii) Medical appropriateness. If an individual seeks a benefit 
under a group health plan or health insurance coverage, the plan or 
coverage may limit or exclude the benefit based on whether the benefit 
is medically appropriate, and the determination of whether the benefit 
is medically appropriate is not within the meaning of underwriting 
purposes. Accordingly, if an individual seeks a benefit under the plan 
and the plan or issuer conditions the benefit based on its medical 
appropriateness and the medical appropriateness of the benefit depends 
on genetic information of the individual, then the plan or issuer is 
permitted to condition the benefit on the genetic information. A plan 
or issuer is permitted to request only the minimum amount of genetic 
information necessary to determine medical appropriateness. The plan or 
issuer may deny the benefit if the patient does not provide the genetic 
information required to determine medical appropriateness. If an 
individual is not seeking a benefit, the medical appropriateness 
exception of this paragraph (d)(1)(iii) to the definition of 
underwriting purposes does not apply. See paragraph (e) of this section 
for examples illustrating the medical appropriateness provisions of 
this paragraph (d)(1)(iii), as well as other provisions of this 
section.
    (2) Prior to or in connection with enrollment. (i) In general. A 
group health plan, and a health insurance issuer offering health 
insurance coverage in connection with a group health plan, must not 
collect genetic information with respect to any individual prior to 
that individual's effective date of coverage under that plan or 
coverage, nor in connection with the rules for eligibility (as defined 
in Sec.  2590.702(b)(1)(ii) of this Part) that apply to that 
individual. Whether or not an individual's information is collected 
prior to that individual's effective date of coverage is determined at 
the time of collection.
    (ii) Incidental collection exception.--(A) In general. If a group 
health plan, or a health insurance issuer offering health insurance 
coverage in connection with a group health plan, obtains genetic 
information incidental to the collection of other information 
concerning any individual, the collection is not a violation of this 
paragraph (d)(2), as long as the collection is not for underwriting 
purposes in violation of paragraph (d)(1) of this section.
    (B) Limitation. The incidental collection exception of this 
paragraph (d)(2)(ii) does not apply in connection with any collection 
where it is reasonable to anticipate that health information will be 
received, unless the collection explicitly states that genetic 
information should not be provided.
    (3) Examples. The rules of this paragraph (d) are illustrated by 
the following examples:

    Example 1. (i) Facts. A group health plan provides a premium 
reduction to enrollees who complete a health risk assessment. The 
health risk assessment is requested to be completed after 
enrollment. Whether or not it is completed or what responses are 
given on it has no effect on an individual's enrollment status, or 
on the enrollment status of members of the individual's family. The 
health risk assessment includes questions about the individual's 
family medical history.
    (ii) Conclusion. In this Example 1, the health risk assessment 
includes a request for genetic information (that is, the 
individual's family medical history). Because completing the health 
risk assessment results in a premium reduction, the request for 
genetic information is for underwriting purposes. Consequently, the 
request violates the prohibition on the collection of genetic 
information in paragraph (d)(1) of this section.
    Example 2. (i) Facts. The same facts as Example 1, except there 
is no premium reduction or any other reward for completing the 
health risk assessment.
    (ii) Conclusion. In this Example 2, the request is not for 
underwriting purposes, nor is it prior to or in connection with 
enrollment. Therefore, it does not violate the prohibition on the 
collection of genetic information in this paragraph (d).
    Example 3. (i) Facts. A group health plan requests that 
enrollees complete a health risk assessment prior to enrollment, and 
includes questions about the individual's family medical history. 
There is no reward or penalty for completing the health risk 
assessment.
    (ii) Conclusion. In this Example 3, because the health risk 
assessment includes a request for genetic information (that is, the 
individual's family medical history), and requests the information 
prior to enrollment, the request violates the prohibition on the 
collection of genetic information in paragraph (d)(2) of this 
section. Moreover, because it is a request for genetic information, 
it is not an incidental collection under paragraph (d)(2)(ii) of 
this section.
    Example 4. (i) Facts. The facts are the same as in Example 1, 
except there is no premium reduction or any other reward given for 
completion of the health risk assessment. However, certain people 
completing the health risk assessment may become eligible for 
additional benefits under the plan by being enrolled in a disease 
management program based on their answers to questions about family 
medical history. Other people may become eligible for the disease 
management program based solely on their answers to questions about 
their individual medical history.
    (ii) Conclusion. In this Example 4, the request for information 
about an individual's family medical history could result in the 
individual being eligible for benefits for which the individual 
would not otherwise be eligible. Therefore, the questions about 
family medical history on the health risk assessment are a request 
for genetic information for underwriting purposes and are prohibited 
under this paragraph (d). Although the plan conditions eligibility 
for the disease management program based on determinations of 
medical appropriateness, the exception for determinations of medical 
appropriateness does not apply because the individual is not seeking 
benefits.
    Example 5. (i) Facts. A group health plan requests enrollees to 
complete two distinct health risk assessments (HRAs) after and 
unrelated to enrollment. The first HRA instructs the individual to 
answer only for the individual and not for the individual's family. 
The first HRA does not ask about any genetic tests the individual 
has undergone or any genetic services the individual has received. 
The plan offers a reward for completing the first HRA. The second 
HRA asks about family medical history and the results of genetic 
tests the individual has undergone. The plan offers no reward for 
completing the second HRA and the instructions make clear that 
completion of the second HRA is wholly voluntary and will not affect 
the reward given for completion of the first HRA.
    (ii) Conclusion. In this Example 5, no genetic information is 
collected in connection with the first HRA, which offers a reward, 
and no benefits or other rewards are conditioned on the request for 
genetic information in the second HRA. Consequently, the request for 
genetic information in the second HRA is not for underwriting 
purposes, and the two HRAs do not violate the prohibition on the 
collection of genetic information in this paragraph (d).
    Example 6. (i) Facts. A group health plan waives its annual 
deductible for enrollees who complete an HRA. The HRA is requested 
to be completed after enrollment. Whether or not the HRA is 
completed or what responses are given on it has no effect on an 
individual's enrollment status, or on the enrollment status of 
members of the individual's family. The HRA does not include any 
direct questions about the individual's genetic information 
(including family medical history). However, the last question 
reads, ``Is there anything else relevant to your health that you 
would like us to know or discuss with you?''
    (ii) Conclusion. In this Example 6, the plan's request for 
medical information does not explicitly state that genetic 
information should not be provided. Therefore, any genetic 
information collected in response to the question is not within the 
incidental collection exception and is prohibited under this 
paragraph (d).
    Example 7. (i) Facts. Same facts as Example 6, except that the 
last question goes on to state, ``In answering this question, you

[[Page 51687]]

should not include any genetic information. That is, please do not 
include any family medical history or any information related to 
genetic testing, genetic services, genetic counseling, or genetic 
diseases for which you believe you may be at risk.''
    (ii) Conclusion. In this Example 7, the plan's request for 
medical information explicitly states that genetic information 
should not be provided. Therefore, any genetic information collected 
in response to the question is within the incidental collection 
exception. However, the plan may not use any genetic information it 
obtains incidentally for underwriting purposes.
    Example 8. (i) Facts. Issuer M acquires Issuer N. M requests N's 
records, stating that N should not provide genetic information and 
should review the records to excise any genetic information. N 
assembles the data requested by M and, although N reviews it to 
delete genetic information, the data from a specific region included 
some individuals' family medical history. Consequently, M receives 
genetic information about some of N's covered individuals.
    (ii) Conclusion. In this Example 8, M's request for health 
information explicitly stated that genetic information should not be 
provided. Therefore, the collection of genetic information was 
within the incidental collection exception. However, M may not use 
the genetic information it obtained incidentally for underwriting 
purposes.

    (e) Examples regarding determinations of medical appropriateness. 
The application of the rules of paragraphs (c) and (d) of this section 
to plan or issuer determinations of medical appropriateness is 
illustrated by the following examples:

    Example 1. (i) Facts. Individual A's group health plan covers 
genetic testing for celiac disease for individuals who have family 
members with this condition. After A's son is diagnosed with celiac 
disease, A undergoes a genetic test and promptly submits a claim for 
the test to A's issuer for reimbursement. The issuer asks A to 
provide the results of the genetic test before the claim is paid.
    (ii) Conclusion. In this Example 1, under the rules of paragraph 
(c)(4) of this section the issuer is permitted to request only the 
minimum amount of information necessary to make a decision regarding 
payment. Because the results of the test are not necessary for the 
issuer to make a decision regarding the payment of A's claim, the 
issuer's request for the results of the genetic test violates 
paragraph (c) of this section.
    Example 2. (i) Facts. Individual B's group health plan covers a 
yearly mammogram for participants and beneficiaries starting at age 
40, or at age 30 for those with increased risk for breast cancer, 
including individuals with BRCA1 or BRCA2 gene mutations. B is 33 
years old and has the BRCA2 mutation. B undergoes a mammogram and 
promptly submits a claim to B's plan for reimbursement. Following an 
established policy, the plan asks B for evidence of increased risk 
of breast cancer, such as the results of a genetic test or a family 
history of breast cancer, before the claim for the mammogram is 
paid. This policy is applied uniformly to all similarly situated 
individuals and is not directed at individuals based on any genetic 
information.
    (ii) Conclusion. In this Example 2, the plan does not violate 
paragraphs (c) or (d) of this section. Under paragraph (c), the plan 
is permitted to request and use the results of a genetic test to 
make a determination regarding payment, provided the plan requests 
only the minimum amount of information necessary. Because the 
medical appropriateness of the mammogram depends on the genetic 
makeup of the patient, the minimum amount of information necessary 
includes the results of the genetic test. Similarly, the plan does 
not violate paragraph (d) of this section because the plan is 
permitted to request genetic information in making a determination 
regarding the medical appropriateness of a claim if the genetic 
information is necessary to make the determination (and if the 
genetic information is not used for underwriting purposes).
    Example 3. (i) Facts. Individual C was previously diagnosed with 
and treated for breast cancer, which is currently in remission. In 
accordance with the recommendation of C's physician, C has been 
taking a regular dose of tamoxifen to help prevent a recurrence. C's 
group health plan adopts a new policy requiring patients taking 
tamoxifen to undergo a genetic test to ensure that tamoxifen is 
medically appropriate for their genetic makeup. In accordance with, 
at the time, the latest scientific research, tamoxifen is not 
helpful in up to 7 percent of breast cancer patients, those with 
certain variations of the gene for making the CYP2D6 
enzyme. If a patient has a gene variant making tamoxifen not 
medically appropriate, the plan does not pay for the tamoxifen 
prescription.
    (ii) Conclusion. In this Example 3, the plan does not violate 
paragraph (c) of this section if it conditions future payments for 
the tamoxifen prescription on C's undergoing a genetic test to 
determine what genetic markers C has for making the 
CYP2D6 enzyme. Nor does the plan violate paragraph (c) of 
this section if the plan refuses future payment if the results of 
the genetic test indicate that tamoxifen is not medically 
appropriate for C.
    Example 4. (i) Facts. A group health plan offers a diabetes 
disease management program to all similarly situated individuals for 
whom it is medically appropriate based on whether the individuals 
have or are at risk for diabetes. The program provides enhanced 
benefits related only to diabetes for individuals who qualify for 
the program. The plan sends out a notice to all participants that 
describes the diabetes disease management program and explains the 
terms for eligibility. Individuals interested in enrolling in the 
program are advised to contact the plan to demonstrate that they 
have diabetes or that they are at risk for diabetes. For individuals 
who do not currently have diabetes, genetic information may be used 
to demonstrate that an individual is at risk.
    (ii) Conclusion. In this Example 4, the plan may condition 
benefits under the disease management program upon a showing by an 
individual that the individual is at risk for diabetes, even if such 
showing may involve genetic information, provided that the plan 
requests genetic information only when necessary to make a 
determination regarding whether the disease management program is 
medically appropriate for the individual and only requests the 
minimum amount of information necessary to make that determination.
    Example 5. (i) Facts. Same facts as Example 4, except that the 
plan includes a questionnaire that asks about the occurrence of 
diabetes in members of the individual's family as part of the notice 
describing the disease management program.
    (ii) Conclusion. In this Example 5, the plan violates the 
requirements of paragraph (d)(1) of this section because the 
requests for genetic information are not limited to those situations 
in which it is necessary to make a determination regarding whether 
the disease management program is medically appropriate for the 
individuals.
    Example 6. (i) Facts. Same facts as Example 4, except the 
disease management program provides an enhanced benefit in the form 
of a lower annual deductible to individuals under the program; the 
lower deductible applies with respect to all medical expenses 
incurred by the individual. Thus, whether or not a claim relates to 
diabetes, the individual is provided with a lower deductible based 
on the individual providing the plan with genetic information.
    (ii) Conclusion. In this Example 6, because the enhanced 
benefits include benefits not related to the determination of 
medical appropriateness, making available the enhanced benefits is 
within the meaning of underwriting purposes. Accordingly, the plan 
may not request or require genetic information (including family 
history information) in determining eligibility for enhanced 
benefits under the program because such a request would be for 
underwriting purposes and would violate paragraph (d)(1) of this 
section.
    (f) Applicability date. This section applies for plan years 
beginning on or after December 7, 2009.

0
6. Section 2590.732 is amended to revise paragraph (b) as follows:


Sec.  2590.732  Special rules relating to group health plans.

* * * * *
    (b) General exception for certain small group health plans--(1) 
Subject to paragraph (b)(2) of this section, the requirements of this 
part do not apply to any group health plan (and group health insurance 
coverage) for any plan year, if on the first day of the plan year, the 
plan has fewer than two participants who are current employees.
    (2) The following requirements apply without regard to paragraph 
(b)(1) of this section:
    (i) Section 2590.701-3(b)(6) of this Part.
    (ii) Section 2590.702(b) of this Part, as such section applies with 
respect to genetic information as a health factor.

[[Page 51688]]

    (iii) Section 2590.702(c) of this Part, as such section applies 
with respect to genetic information as a health factor.
    (iv) Section 2590.702(e) of this Part, as such section applies with 
respect to genetic information as a health factor.
    (v) Section 2590.702-1(b) of this Part.
    (vi) Section 2590.702-1(c) of this Part.
    (vii) Section 2590.702-1(d) of this Part.
    (viii) Section 2590.702-1(e) of this Part.
    (ix) Section 2590.711 of this Part.
* * * * *

    Signed at Washington, DC, this 21st day of August 2009.
Phyllis C. Borzi,
Assistant Secretary, Employee Benefits Security Administration, U.S. 
Department of Labor.

Department of Health and Human Services

45 CFR Subtitle A

0
For the reasons set forth in the preamble, the Department of Health and 
Human Services is amending 45 CFR Subtitle A, Subchapter B as set forth 
below:

PART 144--REQUIREMENTS RELATING TO HEALTH INSURANCE COVERAGE

0
1. The authority citation for part 144 is revised to read as follows:

    Authority: Secs. 2701 through 2763, 2791, and 2792 of the Public 
Health Service Act, 42 U.S.C. 300gg through 300gg-63, 300gg-91, and 
300gg-92.


Sec.  144.101  Basis and purpose.

0
2. Section 144.101 is amended by revising paragraph (a) to read as 
follows:
    (a) Part 146 of this subchapter implements sections 2701 through 
2723, 2791 and 2792 of the Public Health Service Act (PHS Act, 42 
U.S.C. 300gg through 42 U.S.C. 300gg-23, 300gg-91, and 300gg-92.).
* * * * *

0
3. Section 144.103 is amended by revising the definition of ``genetic 
information'' to read as follows:


Sec.  144.103  Definitions.

* * * * *
    Genetic information has the meaning specified in Sec.  146.122(a) 
of this subchapter.
* * * * *

PART 146--REQUIREMENTS FOR THE GROUP HEALTH INSURANCE MARKET

0
4. The authority citation for part 146 is revised to read as follows:

    Authority: Secs. 2702 through 2705, 2711 through 2723, 2791, and 
2792 of the PHS Act (42 U.S.C. 300gg-1 through 300gg-5, 300gg-11 
through 300gg-23, 300gg-91, and 300gg-92).


0
5. Section 146.101 is amended by--
0
A. Revising the first sentence of paragraph (a).
0
B. Adding a new paragraph (b)(1)(vii).
    The revision and addition read as follows:


Sec.  146.101  Basis and scope.

    (a) * * *. This part implements sections 2701 through 2723, 2791, 
and 2792 of the PHS Act. * * *
    (b) * * *
    (1) * * *
    (vii) Additional requirements prohibiting discrimination against 
participants and beneficiaries based on genetic information.
* * * * *

0
6. Section 146.121 is amended by--
0
A. Revising paragraph (a)(1)(vii).
0
B. Revising paragraph (c)(2)(i).
0
C. Republishing paragraph (c)(2)(iii) (Example 1) (i).
0
D. Revising paragraph (c)(2)(iii) (Example 1) (ii).
    The revisions and republication read as follows:


Sec.  146.121  Prohibiting discrimination against participants and 
beneficiaries based on a health factor.

    (a) * * *
    (1) * * *
    (vi) Genetic information, as defined in Sec.  146.122(a) of this 
subchapter;
* * * * *
    (c) * * *
    (2) * * *
    (i) Group rating based on health factors not restricted under this 
section. Nothing in this section restricts the aggregate amount that an 
employer may be charged for coverage under a group health plan. But see 
Sec.  146.122(b) of this part, which prohibits adjustments in group 
premium or contribution rates based on genetic information.
* * * * *
    (iii) * * *

    Example 1. (i) Facts. An employer sponsors a group health plan 
and purchases coverage from a health insurance issuer. In order to 
determine the premium rate for the upcoming plan year, the issuer 
reviews the claims experience of individuals covered under the plan. 
The issuer finds that Individual F had significantly higher claims 
experience than similarly situated individuals in the plan. The 
issuer quotes the plan a higher per-participant rate because of F's 
claims experience.
    (ii) Conclusion. In this Example 1, the issuer does not violate 
the provisions of this paragraph (c)(2) because the issuer blends 
the rate so that the employer is not quoted a higher rate for F than 
for a similarly situated individual based on F's claims experience. 
(However, if the issuer used genetic information in computing the 
group rate, it would violate Sec.  146.122(b) of this part.)
* * * * *

0
7. Add a new Sec.  146.122 to read as follows:


Sec.  146.122  Additional requirements prohibiting discrimination based 
on genetic information.

    (a) Definitions. Unless otherwise provided, the definitions in this 
paragraph (a) govern in applying the provisions of this section.
    (1) Collect means, with respect to information, to request, 
require, or purchase such information.
    (2) Family member means, with respect to an individual--
    (i) A dependent (as defined in Sec.  144.103 of this part) of the 
individual; or
    (ii) Any other person who is a first-degree, second-degree, third-
degree, or fourth-degree relative of the individual or of a dependent 
of the individual. Relatives by affinity (such as by marriage or 
adoption) are treated the same as relatives by consanguinity (that is, 
relatives who share a common biological ancestor). In determining the 
degree of the relationship, relatives by less than full consanguinity 
(such as half-siblings, who share only one parent) are treated the same 
as relatives by full consanguinity (such as siblings who share both 
parents).
    (A) First-degree relatives include parents, spouses, siblings, and 
children.
    (B) Second-degree relatives include grandparents, grandchildren, 
aunts, uncles, nephews, and nieces.
    (C) Third-degree relatives include great-grandparents, great-
grandchildren, great aunts, great uncles, and first cousins.
    (D) Fourth-degree relatives include great-great grandparents, 
great-great grandchildren, and children of first cousins.
    (3) Genetic information means--
    (i) Subject to paragraphs (a)(3)(ii) and (iii) of this section, 
with respect to an individual, information about--
    (A) The individual's genetic tests (as defined in paragraph (a)(5) 
of this section);
    (B) The genetic tests of family members of the individual;
    (C) The manifestation (as defined in paragraph (a)(6) of this 
section) of a disease or disorder in family members of the individual; 
or
    (D) Any request for, or receipt of, genetic services (as defined in 
paragraph (a)(4) of this section), or participation in clinical 
research which includes genetic

[[Page 51689]]

services, by the individual or any family member of the individual.
    (ii) The term genetic information does not include information 
about the sex or age of any individual.
    (iii) The term genetic information includes--
    (A) With respect to a pregnant woman (or a family member of the 
pregnant woman), genetic information of any fetus carried by the 
pregnant woman; and
    (B) With respect to an individual (or a family member of the 
individual) who is utilizing an assisted reproductive technology, 
genetic information of any embryo legally held by the individual or 
family member.
    (4) Genetic services means --
    (i) A genetic test, as defined in paragraph (a)(5) of this section;
    (ii) Genetic counseling (including obtaining, interpreting, or 
assessing genetic information); or
    (iii) Genetic education.
    (5)(i) Genetic test means an analysis of human DNA, RNA, 
chromosomes, proteins, or metabolites, if the analysis detects 
genotypes, mutations, or chromosomal changes. However, a genetic test 
does not include an analysis of proteins or metabolites that is 
directly related to a manifested disease, disorder, or pathological 
condition. Accordingly, a test to determine whether an individual has a 
BRCA1 or BRCA2 variant is a genetic test. Similarly, a test to 
determine whether an individual has a genetic variant associated with 
hereditary nonpolyposis colorectal cancer is a genetic test. However, 
an HIV test, complete blood count, cholesterol test, liver function 
test, or test for the presence of alcohol or drugs is not a genetic 
test.
    (ii) The rules of this paragraph (a)(5) are illustrated by the 
following example:

    Example. (i) Facts. Individual A is a newborn covered under a 
group health plan. A undergoes a phenylketonuria (PKU) screening, 
which measures the concentration of a metabolite, phenylalanine, in 
A's blood. In PKU, a mutation occurs in the phenylalanine 
hydroxylase (PAH) gene which contains instructions for making the 
enzyme needed to break down the amino acid phenylalanine. 
Individuals with the mutation, who have a deficiency in the enzyme 
to break down phenylalanine, have high concentrations of 
phenylalanine.
    (ii) Conclusion. In this Example, the PKU screening is a genetic 
test with respect to A because the screening is an analysis of 
metabolites that detects a genetic mutation.

    (6)(i) Manifestation or manifested means, with respect to a 
disease, disorder, or pathological condition, that an individual has 
been or could reasonably be diagnosed with the disease, disorder, or 
pathological condition by a health care professional with appropriate 
training and expertise in the field of medicine involved. For purposes 
of this section, a disease, disorder, or pathological condition is not 
manifested if a diagnosis is based principally on genetic information.
    (ii) The rules of this paragraph (a)(6) are illustrated by the 
following examples:

    Example 1. (i) Facts. Individual A has a family medical history 
of diabetes. A begins to experience excessive sweating, thirst, and 
fatigue. A's physician examines A and orders blood glucose testing 
(which is not a genetic test). Based on the physician's examination, 
A's symptoms, and test results that show elevated levels of blood 
glucose, A's physician diagnoses A as having adult onset diabetes 
mellitus (Type 2 diabetes).
    (ii) Conclusion. In this Example 1, A has been diagnosed by a 
health care professional with appropriate training and expertise in 
the field of medicine involved. The diagnosis is not based 
principally on genetic information. Thus, Type 2 diabetes is 
manifested with respect to A.
    Example 2. (i) Facts. Individual B has several family members 
with colon cancer. One of them underwent genetic testing which 
detected a mutation in the MSH2 gene associated with hereditary 
nonpolyposis colorectal cancer (HNPCC). B's physician, a health care 
professional with appropriate training and expertise in the field of 
medicine involved, recommends that B undergo a targeted genetic test 
to look for the specific mutation found in B 's relative to 
determine if B has an elevated risk for cancer. The genetic test 
with respect to B showed that B also carries the mutation and is at 
increased risk to develop colorectal and other cancers associated 
with HNPCC. B has a colonoscopy which indicates no signs of disease, 
and B has no symptoms.
    (ii) Conclusion. In this Example 2, because B has no signs or 
symptoms of colorectal cancer, B has not been and could not 
reasonably be diagnosed with HNPCC. Thus, HNPCC is not manifested 
with respect to B.
    Example 3. (i) Facts. Same facts as Example 2, except that B's 
colonoscopy and subsequent tests indicate the presence of HNPCC. 
Based on the colonoscopy and subsequent test results, B's physician 
makes a diagnosis of HNPCC.
    (ii) Conclusion. In this Example 3, HNPCC is manifested with 
respect to B because a health care professional with appropriate 
training and expertise in the field of medicine involved has made a 
diagnosis that is not based principally on genetic information.
    Example 4. (i) Facts. Individual C has a family member that has 
been diagnosed with Huntington's Disease. A genetic test indicates 
that C has the Huntington's Disease gene variant. At age 42, C 
begins suffering from occasional moodiness and disorientation, 
symptoms which are associated with Huntington's Disease. C is 
examined by a neurologist (a physician with appropriate training and 
expertise for diagnosing Huntington's Disease). The examination 
includes a clinical neurological exam. The results of the 
examination do not support a diagnosis of Huntington's Disease.
    (ii) Conclusion. In this Example 4, C is not and could not 
reasonably be diagnosed with Huntington's Disease by a health care 
professional with appropriate training and expertise. Therefore, 
Huntington's Disease is not manifested with respect to C.
    Example 5. (i) Facts. Same facts as Example 4, except that C 
exhibits additional neurological and behavioral symptoms, and the 
results of the examination support a diagnosis of Huntington's 
Disease with respect to C.
    (ii) Conclusion. In this Example 5, C could reasonably be 
diagnosed with Huntington's Disease by a health care professional 
with appropriate training and expertise. Therefore, Huntington's 
Disease is manifested with respect to C.

    (7) Underwriting purposes has the meaning given in paragraph (d)(1) 
of this section.
    (b) No group-based discrimination based on genetic information--(1) 
In general. For purposes of this section, a group health plan, and a 
health insurance issuer offering health insurance coverage in 
connection with a group health plan, must not adjust premium or 
contribution amounts for the plan, or any group of similarly situated 
individuals under the plan, on the basis of genetic information. For 
this purpose, ``similarly situated individuals'' are those described in 
Sec.  146.121(d) of this part.
    (2) Rule of construction. Nothing in paragraph (b)(1) of this 
section (or in paragraph (d)(1) or (d)(2) of this section) limits the 
ability of a health insurance issuer offering health insurance coverage 
in connection with a group health plan to increase the premium for a 
group health plan or a group of similarly situated individuals under 
the plan based on the manifestation of a disease or disorder of an 
individual who is enrolled in the plan. In such a case, however, the 
manifestation of a disease or disorder in one individual cannot also be 
used as genetic information about other group members to further 
increase the premium for a group health plan or a group of similarly 
situated individuals under the plan.
    (3) Examples. The rules of this paragraph (b) are illustrated by 
the following examples:

    Example 1. (i) Facts. An employer sponsors a group health plan 
that provides coverage through a health insurance issuer. In order 
to determine the premium rate for the upcoming plan year, the issuer 
reviews the claims experience of individuals covered under the plan 
and other health status information of the individuals, including 
genetic information. The issuer finds that three individuals covered 
under the plan had unusually high claims experience. In addition, 
the issuer finds that the genetic

[[Page 51690]]

information of two other individuals indicates the individuals have 
a higher probability of developing certain illnesses although the 
illnesses are not manifested at this time. The issuer quotes the 
plan a higher per-participant rate because of both the genetic 
information and the higher claims experience.
    (ii) Conclusion. In this Example 1, the issuer violates the 
provisions of this paragraph (b) because the issuer adjusts the 
premium based on genetic information. However, if the adjustment 
related solely to claims experience, the adjustment would not 
violate the requirements of this section (nor would it violate the 
requirements of paragraph (c) of Sec.  146.121 of this part, which 
prohibits discrimination in individual premiums or contributions 
based on a health factor but permits increases in the group rate 
based on a health factor).
    Example 2. (i) Facts. An employer sponsors a group health plan 
that provides coverage through a health insurance issuer. In order 
to determine the premium rate for the upcoming plan year, the issuer 
reviews the claims experience of individuals covered under the plan 
and other health status information of the individuals, including 
genetic information. The issuer finds that Employee A has made 
claims for treatment of polycystic kidney disease. A also has two 
dependent children covered under the plan. The issuer quotes the 
plan a higher per-participant rate because of both A's claims 
experience and the family medical history of A's children (that is, 
the fact that A has the disease).
    (ii) Conclusion. In this Example 2, the issuer violates the 
provisions of this paragraph (b) because, by taking the likelihood 
that A's children may develop polycystic kidney disease into account 
in computing the rate for the plan, the issuer adjusts the premium 
based on genetic information relating to a condition that has not 
been manifested in A's children. However, it is permissible for the 
issuer to increase the premium based on A's claims experience.

    (c) Limitation on requesting or requiring genetic testing--(1) 
General rule. Except as otherwise provided in this paragraph (c), a 
group health plan, and a health insurance issuer offering health 
insurance coverage in connection with a group health plan, must not 
request or require an individual or a family member of the individual 
to undergo a genetic test.
    (2) Health care professional may recommend a genetic test. Nothing 
in paragraph (c)(1) of this section limits the authority of a health 
care professional who is providing health care services to an 
individual to request that the individual undergo a genetic test.
    (3) Examples. The rules of paragraphs (c)(1) and (2) of this 
section are illustrated by the following examples:

    Example 1. (i) Facts. Individual A goes to a physician for a 
routine physical examination. The physician reviews A's family 
medical history and A informs the physician that A's mother has been 
diagnosed with Huntington's Disease. The physician advises A that 
Huntington's Disease is hereditary and recommends that A undergo a 
genetic test.
    (ii) Conclusion. In this Example 1, the physician is a health 
care professional who is providing health care services to A. 
Therefore, the physician's recommendation that A undergo the genetic 
test does not violate this paragraph (c).
    Example 2. (i) Facts. Individual B is covered by a health 
maintenance organization (HMO). B is a child being treated for 
leukemia. B's physician, who is employed by the HMO, is considering 
a treatment plan that includes six-mercaptopurine, a drug for 
treating leukemia in most children. However, the drug could be fatal 
if taken by a small percentage of children with a particular gene 
variant. B's physician recommends that B undergo a genetic test to 
detect this variant before proceeding with this course of treatment.
    (ii) Conclusion. In this Example 2, even though the physician is 
employed by the HMO, the physician is nonetheless a health care 
professional who is providing health care services to B. Therefore, 
the physician's recommendation that B undergo the genetic test does 
not violate this paragraph (c).

    (4) Determination regarding payment.
    (i) In general. As provided in this paragraph (c)(4), nothing in 
paragraph (c)(1) of this section precludes a plan or issuer from 
obtaining and using the results of a genetic test in making a 
determination regarding payment. For this purpose, ``payment'' has the 
meaning given such term in Sec.  164.501 of the privacy regulations 
issued under the Health Insurance Portability and Accountability Act. 
Thus, if a plan or issuer conditions payment for an item or service 
based on its medical appropriateness and the medical appropriateness of 
the item or service depends on the genetic makeup of a patient, then 
the plan or issuer is permitted to condition payment for the item or 
service on the outcome of a genetic test. The plan or issuer may also 
refuse payment if the patient does not undergo the genetic test.
    (ii) Limitation. A plan or issuer is permitted to request only the 
minimum amount of information necessary to make a determination 
regarding payment. The minimum amount of information necessary is 
determined in accordance with the minimum necessary standard in Sec.  
164.502(b) of the privacy regulations issued under the Health Insurance 
Portability and Accountability Act.
    (iii) Examples. See paragraph (e) of this section for examples 
illustrating the rules of this paragraph (c)(4), as well as other 
provisions of this section.
    (5) Research exception. Notwithstanding paragraph (c)(1) of this 
section, a plan or issuer may request, but not require, that a 
participant or beneficiary undergo a genetic test if all of the 
conditions of this paragraph (c)(5) are met:
    (i) Research in accordance with Federal regulations and applicable 
State or local law or regulations. The plan or issuer makes the request 
pursuant to research, as defined in Sec.  46.102(d) of this subtitle, 
that complies with part 46 of this subtitle or equivalent Federal 
regulations, and any applicable State or local law or regulations for 
the protection of human subjects in research.
    (ii) Written request for participation in research. The plan or 
issuer makes the request in writing, and the request clearly indicates 
to each participant or beneficiary (or, in the case of a minor child, 
to the legal guardian of the beneficiary) that -
    (A) Compliance with the request is voluntary; and
    (B) Noncompliance will have no effect on eligibility for benefits 
(as described in Sec.  146.121(b)(1) of this part) or premium or 
contribution amounts.
    (iii) Prohibition on underwriting. No genetic information collected 
or acquired under this paragraph (c)(5) can be used for underwriting 
purposes (as described in paragraph (d)(1) of this section).
    (iv) Notice to Federal agencies. The plan or issuer completes a 
copy of the ``Notice of Research Exception under the Genetic 
Information Nondiscrimination Act'' authorized by the Secretary and 
provides the notice to the address specified in the instructions 
thereto.
    (d) Prohibitions on collection of genetic information.
    (1) For underwriting purposes.
    (i) General rule. A group health plan, and a health insurance 
issuer offering health insurance coverage in connection with a group 
health plan, must not collect (as defined in paragraph (a)(1) of this 
section) genetic information for underwriting purposes. See paragraph 
(e) of this section for examples illustrating the rules of this 
paragraph (d)(1), as well as other provisions of this section.
    (ii) Underwriting purposes defined. Subject to paragraph 
(d)(1)(iii) of this section, underwriting purposes means, with respect 
to any group health plan, or health insurance coverage offered in 
connection with a group health plan--
    (A) Rules for, or determination of, eligibility (including 
enrollment and continued eligibility) for benefits under the plan or 
coverage as described in Sec.  146.121(b)(1)(ii) of this part 
(including changes in deductibles or other cost-

[[Page 51691]]

sharing mechanisms in return for activities such as completing a health 
risk assessment or participating in a wellness program);
    (B) The 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);
    (C) The application of any preexisting condition exclusion under 
the plan or coverage; and
    (D) Other activities related to the creation, renewal, or 
replacement of a contract of health insurance or health benefits.
    (iii) Medical appropriateness. If an individual seeks a benefit 
under a group health plan or health insurance coverage, the plan or 
coverage may limit or exclude the benefit based on whether the benefit 
is medically appropriate, and the determination of whether the benefit 
is medically appropriate is not within the meaning of underwriting 
purposes. Accordingly, if an individual seeks a benefit under the plan 
and the plan or issuer conditions the benefit based on its medical 
appropriateness and the medical appropriateness of the benefit depends 
on genetic information of the individual, then the plan or issuer is 
permitted to condition the benefit on the genetic information. A plan 
or issuer is permitted to request only the minimum amount of genetic 
information necessary to determine medical appropriateness. The plan or 
issuer may deny the benefit if the patient does not provide the genetic 
information required to determine medical appropriateness. If an 
individual is not seeking a benefit, the medical appropriateness 
exception of this paragraph (d)(1)(iii) to the definition of 
underwriting purposes does not apply. See paragraph (e) of this section 
for examples illustrating the medical appropriateness provisions of 
this paragraph (d)(1)(iii), as well as other provisions of this 
section.
    (2) Prior to or in connection with enrollment. (i) In general. A 
group health plan, and a health insurance issuer offering health 
insurance coverage in connection with a group health plan, must not 
collect genetic information with respect to any individual prior to 
that individual's effective date of coverage under that plan or 
coverage, nor in connection with the rules for eligibility (as defined 
in Sec.  146.121(b)(1)(ii) of this part) that apply to that individual. 
Whether or not an individual's information is collected prior to that 
individual's effective date of coverage is determined at the time of 
collection.
    (ii) Incidental collection exception.
    (A) In general. If a group health plan, or a health insurance 
issuer offering health insurance coverage in connection with a group 
health plan, obtains genetic information incidental to the collection 
of other information concerning any individual, the collection is not a 
violation of this paragraph (d)(2), as long as the collection is not 
for underwriting purposes in violation of paragraph (d)(1) of this 
section.
    (B) Limitation. The incidental collection exception of this 
paragraph (d)(2)(ii) does not apply in connection with any collection 
where it is reasonable to anticipate that health information will be 
received, unless the collection explicitly states that genetic 
information should not be provided.
    (3) Examples. The rules of this paragraph (d) are illustrated by 
the following examples:

    Example 1. (i) Facts. A group health plan provides a premium 
reduction to enrollees who complete a health risk assessment. The 
health risk assessment is requested to be completed after 
enrollment. Whether or not it is completed or what responses are 
given on it has no effect on an individual's enrollment status, or 
on the enrollment status of members of the individual's family. The 
health risk assessment includes questions about the individual's 
family medical history.
    (ii) Conclusion. In this Example 1, the health risk assessment 
includes a request for genetic information (that is, the 
individual's family medical history). Because completing the health 
risk assessment results in a premium reduction, the request for 
genetic information is for underwriting purposes. Consequently, the 
request violates the prohibition on the collection of genetic 
information in paragraph (d)(1) of this section.
    Example 2. (i) Facts. The same facts as Example 1, except there 
is no premium reduction or any other reward for completing the 
health risk assessment.
    (ii) Conclusion. In this Example 2, the request is not for 
underwriting purposes, nor is it prior to or in connection with 
enrollment. Therefore, it does not violate the prohibition on the 
collection of genetic information in this paragraph (d).
    Example 3. (i) Facts. A group health plan requests that 
enrollees complete a health risk assessment prior to enrollment, and 
includes questions about the individual's family medical history. 
There is no reward or penalty for completing the health risk 
assessment.
    (ii) Conclusion. In this Example 3, because the health risk 
assessment includes a request for genetic information (that is, the 
individual's family medical history), and requests the information 
prior to enrollment, the request violates the prohibition on the 
collection of genetic information in paragraph (d)(2) of this 
section. Moreover, because it is a request for genetic information, 
it is not an incidental collection under paragraph (d)(2)(ii) of 
this section.
    Example 4. (i) Facts. The facts are the same as in Example 1, 
except there is no premium reduction or any other reward given for 
completion of the health risk assessment. However, certain people 
completing the health risk assessment may become eligible for 
additional benefits under the plan by being enrolled in a disease 
management program based on their answers to questions about family 
medical history. Other people may become eligible for the disease 
management program based solely on their answers to questions about 
their individual medical history.
    (ii) Conclusion. In this Example 4, the request for information 
about an individual's family medical history could result in the 
individual being eligible for benefits for which the individual 
would not otherwise be eligible. Therefore, the questions about 
family medical history on the health risk assessment are a request 
for genetic information for underwriting purposes and are prohibited 
under this paragraph (d). Although the plan conditions eligibility 
for the disease management program based on determinations of 
medical appropriateness, the exception for determinations of medical 
appropriateness does not apply because the individual is not seeking 
benefits.
    Example 5. (i) Facts. A group health plan requests enrollees to 
complete two distinct health risk assessments (HRAs) after and 
unrelated to enrollment. The first HRA instructs the individual to 
answer only for the individual and not for the individual's family. 
The first HRA does not ask about any genetic tests the individual 
has undergone or any genetic services the individual has received. 
The plan offers a reward for completing the first HRA. The second 
HRA asks about family medical history and the results of genetic 
tests the individual has undergone. The plan offers no reward for 
completing the second HRA and the instructions make clear that 
completion of the second HRA is wholly voluntary and will not affect 
the reward given for completion of the first HRA.
    (ii) Conclusion. In this Example 5, no genetic information is 
collected in connection with the first HRA, which offers a reward, 
and no benefits or other rewards are conditioned on the request for 
genetic information in the second HRA. Consequently, the request for 
genetic information in the second HRA is not for underwriting 
purposes, and the two HRAs do not violate the prohibition on the 
collection of genetic information in this paragraph (d).
    Example 6. (i) Facts. A group health plan waives its annual 
deductible for enrollees who complete an HRA. The HRA is requested 
to be completed after enrollment. Whether or not the HRA is 
completed or what responses are given on it has no effect on an 
individual's enrollment status, or on the enrollment status of 
members of the individual's family. The HRA does not include any 
direct questions about the individual's genetic information 
(including family medical history). However, the last

[[Page 51692]]

question reads, ``Is there anything else relevant to your health 
that you would like us to know or discuss with you?''
    (ii) Conclusion. In this Example 6, the plan's request for 
medical information does not explicitly state that genetic 
information should not be provided. Therefore, any genetic 
information collected in response to the question is not within the 
incidental collection exception and is prohibited under this 
paragraph (d).
    Example 7. (i) Facts. Same facts as Example 6, except that the 
last question goes on to state, ``In answering this question, you 
should not include any genetic information. That is, please do not 
include any family medical history or any information related to 
genetic testing, genetic services, genetic counseling, or genetic 
diseases for which you believe you may be at risk.''
    (ii) Conclusion. In this Example 7, the plan's request for 
medical information explicitly states that genetic information 
should not be provided. Therefore, any genetic information collected 
in response to the question is within the incidental collection 
exception. However, the plan may not use any genetic information it 
obtains incidentally for underwriting purposes.
    Example 8. (i) Facts. Issuer M acquires Issuer N. M requests N's 
records, stating that N should not provide genetic information and 
should review the records to excise any genetic information. N 
assembles the data requested by M and, although N reviews it to 
delete genetic information, the data from a specific region included 
some individuals' family medical history. Consequently, M receives 
genetic information about some of N's covered individuals.
    (ii) Conclusion. In this Example 8, M's request for health 
information explicitly stated that genetic information should not be 
provided. Therefore, the collection of genetic information was 
within the incidental collection exception. However, M may not use 
the genetic information it obtained incidentally for underwriting 
purposes.

    (e) Examples regarding determinations of medical appropriateness. 
The application of the rules of paragraphs (c) and (d) of this section 
to plan or issuer determinations of medical appropriateness is 
illustrated by the following examples:

    Example 1. (i) Facts. Individual A group health plan covers 
genetic testing for celiac disease for individuals who have family 
members with this condition. After A's son is diagnosed with celiac 
disease, A undergoes a genetic test and promptly submits a claim for 
the test to A's issuer for reimbursement. The issuer asks A to 
provide the results of the genetic test before the claim is paid.
    (ii) Conclusion. In this Example 1, under the rules of paragraph 
(c)(4) of this section the issuer is permitted to request only the 
minimum amount of information necessary to make a decision regarding 
payment. Because the results of the test are not necessary for the 
issuer to make a decision regarding the payment of A's claim, the 
issuer's request for the results of the genetic test violates 
paragraph (c) of this section.
    Example 2. (i) Facts. Individual B's group health plan covers a 
yearly mammogram for participants and beneficiaries starting at age 
40, or at age 30 for those with increased risk for breast cancer, 
including individuals with BRCA1 or BRCA2 gene mutations. B is 33 
years old and has the BRCA2 mutation. B undergoes a mammogram and 
promptly submits a claim to B's plan for reimbursement. Following an 
established policy, the plan asks B for evidence of increased risk 
of breast cancer, such as the results of a genetic test or a family 
history of breast cancer, before the claim for the mammogram is 
paid. This policy is applied uniformly to all similarly situated 
individuals and is not directed at individuals based on any genetic 
information.
    (ii) Conclusion. In this Example 2, the plan does not violate 
paragraphs (c) or (d) of this section. Under paragraph (c), the plan 
is permitted to request and use the results of a genetic test to 
make a determination regarding payment, provided the plan requests 
only the minimum amount of information necessary. Because the 
medical appropriateness of the mammogram depends on the genetic 
makeup of the patient, the minimum amount of information necessary 
includes the results of the genetic test. Similarly, the plan does 
not violate paragraph (d) of this section because the plan is 
permitted to request genetic information in making a determination 
regarding the medical appropriateness of a claim if the genetic 
information is necessary to make the determination (and if the 
genetic information is not used for underwriting purposes).
    Example 3. (i) Facts. Individual C was previously diagnosed with 
and treated for breast cancer, which is currently in remission. In 
accordance with the recommendation of C's physician, C has been 
taking a regular dose of tamoxifen to help prevent a recurrence. C's 
group health plan adopts a new policy requiring patients taking 
tamoxifen to undergo a genetic test to ensure that tamoxifen is 
medically appropriate for their genetic makeup. In accordance with, 
at the time, the latest scientific research, tamoxifen is not 
helpful in up to 7 percent of breast cancer patients, those with 
certain variations of the gene for making the CYP2D6 
enzyme. If a patient has a gene variant making tamoxifen not 
medically appropriate, the plan does not pay for the tamoxifen 
prescription.
    (ii) Conclusion. In this Example 3, the plan does not violate 
paragraph (c) of this section if it conditions future payments for 
the tamoxifen prescription on C's undergoing a genetic test to 
determine what genetic markers C has for making the 
CYP2D6 enzyme. Nor does the plan violate paragraph (c) of 
this section if the plan refuses future payment if the results of 
the genetic test indicate that tamoxifen is not medically 
appropriate for C.
    Example 4. (i) Facts. A group health plan offers a diabetes 
disease management program to all similarly situated individuals for 
whom it is medically appropriate based on whether the individuals 
have or are at risk for diabetes. The program provides enhanced 
benefits related only to diabetes for individuals who qualify for 
the program. The plan sends out a notice to all participants that 
describes the diabetes disease management program and explains the 
terms for eligibility. Individuals interested in enrolling in the 
program are advised to contact the plan to demonstrate that they 
have diabetes or that they are at risk for diabetes. For individuals 
who do not currently have diabetes, genetic information may be used 
to demonstrate that an individual is at risk.
    (ii) Conclusion. In this Example 4, the plan may condition 
benefits under the disease management program upon a showing by an 
individual that the individual is at risk for diabetes, even if such 
showing may involve genetic information, provided that the plan 
requests genetic information only when necessary to make a 
determination regarding whether the disease management program is 
medically appropriate for the individual and only requests the 
minimum amount of information necessary to make that determination.
    Example 5. (i) Facts. Same facts as Example 4, except that the 
plan includes a questionnaire that asks about the occurrence of 
diabetes in members of the individual's family as part of the notice 
describing the disease management program.
    (ii) Conclusion. In this Example 5, the plan violates the 
requirements of paragraph (d)(1) of this section because the 
requests for genetic information are not limited to those situations 
in which it is necessary to make a determination regarding whether 
the disease management program is medically appropriate for the 
individuals.
    Example 6. (i) Facts. Same facts as Example 4, except the 
disease management program provides an enhanced benefit in the form 
of a lower annual deductible to individuals under the program; the 
lower deductible applies with respect to all medical expenses 
incurred by the individual. Thus, whether or not a claim relates to 
diabetes, the individual is provided with a lower deductible based 
on the individual providing the plan with genetic information.
    (ii) Conclusion. In this Example 6, because the enhanced 
benefits include benefits not related to the determination of 
medical appropriateness, making available the enhanced benefits is 
within the meaning of underwriting purposes. Accordingly, the plan 
may not request or require genetic information (including family 
history information) in determining eligibility for enhanced 
benefits under the program because such a request would be for 
underwriting purposes and would violate paragraph (d)(1) of this 
section.

    (f) Applicability date. This section applies for plan years 
beginning on or after December 7, 2009.

0
8. Section 146.145 is amended by revising paragraph (b) as follows:


Sec.  146.145  Special rules relating to group health plans.

* * * * *
    (b) General exception for certain small group health plans. The 
requirements of this part, other than Sec.  146.130 and the provisions 
with respect to genetic

[[Page 51693]]

nondiscrimination (found in Sec.  146.111(b)(6), Sec.  146.121(b), 
Sec.  146.121(c), Sec.  146.121(e), Sec.  146.122(b), Sec.  146.122(c), 
Sec.  146.122(d), and Sec.  146.122(e)) do not apply to any group 
health plan (and group health insurance coverage) for any plan year, if 
on the first day of the plan year, the plan has fewer than two 
participants who are current employees.
* * * * *

0
9. Section 146.180 is amended by--
0
A. Revising paragraph (a)(1)(iii).
0
B. Revising paragraph (h).
0
C. In paragraph (i), removing the reference ``(h)'' and added the 
reference ``(h)(1)'' in its place each time it appears.
0
D. Revising the last sentence of paragraph (k).
    The revisions read as follows:


Sec.  146.180  Treatment of non-Federal governmental plans.

    (a) * * *
    (1) * * *
    (iii) Prohibitions against discriminating against individual 
participants and beneficiaries based on health status described in 
Sec.  146.121, except that the sponsor of a self-funded non-Federal 
governmental plan cannot elect to exempt its plan from the requirements 
in Sec.  146.121(a)(1)(vi) and Sec.  146.122 that prohibit 
discrimination with respect to genetic information.
* * * * *
    (h) Requirements not subject to exemption.
    (1) Certification and disclosure of creditable coverage. Without 
regard to an election under this section, a non-Federal governmental 
plan must provide for certification and disclosure of creditable 
coverage under the plan with respect to participants and their 
dependents as specified under Sec.  146.115 of this part.
    (2) Genetic information. Without regard to an election under this 
section that exempts a non-Federal governmental plan from any or all of 
the provisions of Sec.  146.111 and Sec.  146.121 of this part, the 
exemption election must not be construed to exempt the plan from any 
provisions of this part 146 that pertain to genetic information.
    (3) Enforcement. CMS enforces these requirements as provided under 
paragraph (k) of this section.
    (4) Examples.

    (i)

    Example 1. (A) Individual A is hired by a county that has 
elected to exempt its self-funded group health plan from certain 
requirements of paragraph (a)(1) of this section, including 
prohibitions against enrollment discrimination based on health 
status-related factors. Individual A applies for enrollment in the 
county's group health plan. Applicants must pass medical 
underwriting before being allowed to enroll in the plan. The plan 
requires an applicant to complete a medical history form and to 
authorize the plan to contact physicians regarding any medical 
treatments the applicant has received in the past 5 years. 
Individual A has Type 2 diabetes. He submits the required form, 
which reflects that condition. The plan also receives information 
from Individual A's physicians. While the plan's request to 
Individual A's physicians did not include a request for genetic 
information, the plan received information from a physician in 
response to its request for health information about Individual A, 
that one of Individual A's parents has Huntington's Disease. The 
Plan denies enrollment to Individual A.
    (B) Individual A files a complaint with CMS that he has been 
denied enrollment in the plan because of genetic information the 
plan received. CMS investigates the complaint and determines that 
the plan uniformly denies enrollment to anyone who has Type II 
diabetes. CMS resolves the complaint in favor of the plan on the 
basis that the plan permissibly denied enrollment to Individual A 
under its exemption election because of the existence of a medical 
condition that uniformly disqualifies individuals from participating 
in the plan.

    (ii)

    Example 2. (A) Same facts as in Example 1, except Individual A 
does not have diabetes or any other preexisting medical condition; 
that is, there is no manifestation of a disease or disorder with 
respect to Individual A at the time of his application for 
enrollment in the county's group health plan.
    (B) In these circumstances, CMS resolves the complaint in favor 
of Individual A because CMS determines that the plan impermissibly 
denied enrollment to Individual A on the basis of genetic 
information. CMS instructs the plan to permit Individual A to enroll 
in the plan retroactive to the earliest date coverage would be 
effective under the terms of the plan based on the date of 
Individual A's enrollment application or hire, as applicable. CMS 
may impose a civil money penalty, as determined under subpart C of 
part 150.
* * * * *
    (k) * * *. This may include imposing a civil money penalty against 
the plan or plan sponsor, as determined under subpart C of part 150.
* * * * *

PART 148--REQUIREMENTS FOR THE INDIVIDUAL HEALTH INSURANCE MARKET

0
10. The authority citation for part 148 continues to read as follows:

    Authority: Secs. 2741 through 2763, 2791, and 2792 of the Public 
Health Service Act, 42 U.S.C. 300gg-41 through 300gg-63, 300gg-91, 
and 300gg-92.


0
11. Section 148.101 is amended by revising the last sentence to read as 
follows:


Sec.  148.101  Basis and purpose.

    * * *. It also provides certain protections for mothers and 
newborns with respect to coverage for hospital stays in connection with 
childbirth and protects all individuals and family members who have, or 
seek, individual health insurance coverage from discrimination based on 
genetic information.

0
12. Section 148.102 is amended by revising the last sentence of 
paragraph (a)(2) and paragraph (b) to read as follows:


Sec.  148.102  Scope, applicability, and effective dates.

    (a) * * *
    (2) * * *. The requirements that pertain to guaranteed renewability 
for all individuals, to protections for mothers and newborns with 
respect to hospital stays in connection with childbirth, and to 
protections against discrimination based on genetic information apply 
to all issuers of individual health insurance coverage in the State, 
regardless of whether a State implements an alternative mechanism under 
Sec.  148.128 of this part.
    (b) Effective date. Except as provided in Sec.  148.124 
(certificate of creditable coverage), Sec.  148.128 (alternative State 
mechanisms), Sec.  148.170 (standards relating to benefits for mothers 
and newborns), and Sec.  148.180 (prohibition of health discrimination 
based on genetic information) of this part, the requirements of this 
part apply to health insurance coverage offered, sold, issued, renewed, 
in effect, or operated in the individual market after June 30, 1997, 
regardless of when a period of creditable coverage occurs.


Sec.  148.120  [Amended]

0
13. Section 148.120 is amended by--
0
A. In paragraphs (c)(5)(ii), (d)(2), and (e)(2) removing the cross-
reference ``Sec.  148.200'' and adding in its place the cross-reference 
``part 150'' each time it appears.
0
B. In paragraph (f)(1) removing the term ``If'' and adding in its place 
the phrase ``Except as prohibited by Sec.  148.180, if''.
0
C. In paragraph (g)(4) removing the term ``This'' and adding in its 
place the phrase ``Except as prohibited by Sec.  148.180, this''.

0
14. A new Sec.  148.180 is added to subpart C to read as follows:

[[Page 51694]]

Sec.  148.180  Prohibition of discrimination based on genetic 
information.

    (a) Definitions. For purposes of this section, the following 
definitions as set forth in Sec.  146.122 of this subchapter pertain to 
health insurance issuers in the individual market to the extent that 
those definitions are not inconsistent with respect to health insurance 
coverage offered, sold, issued, renewed, in effect or operated in the 
individual market:
    Collect has the meaning set forth at Sec.  146.122(a).
    Family member has the meaning set forth at Sec.  146.122(a).
    Genetic information has the meaning set forth at Sec.  146.122(a).
    Genetic services has the meaning set forth at Sec.  146.122(a).
    Genetic test has the meaning set forth at Sec.  146.122(a).
    Manifestation or manifested has the meaning set forth at Sec.  
146.122(a).
    Preexisting condition exclusion has the meaning set forth at Sec.  
144.103.
    Underwriting purposes has the meaning set forth at Sec.  
148.180(f)(1).
    (b) Prohibition on genetic information as a condition of 
eligibility.
    (1) In general. An issuer offering health insurance coverage in the 
individual market may not establish rules for the eligibility 
(including continued eligibility) of any individual to enroll in 
individual health insurance coverage based on genetic information.
    (2) Rule of construction. Nothing in paragraph (b)(1) of this 
section precludes an issuer from establishing rules for eligibility for 
an individual to enroll in individual health insurance coverage based 
on the manifestation of a disease or disorder in that individual, or in 
a family member of that individual when the family member is covered 
under the policy that covers the individual.
    (3) Examples. The rules of this paragraph (b) are illustrated by 
the following examples:

    Example 1. (i) Facts. A State implements the HIPAA guaranteed 
availability requirement in the individual health insurance market 
in accordance with Sec.  148.120. Individual A and his spouse S are 
not ``eligible individuals'' as that term is defined at Sec.  
148.103 and, therefore, they are not entitled to obtain individual 
health insurance coverage on a guaranteed available basis. They 
apply for individual coverage with Issuer M. As part of the 
application for coverage, M receives health information about A and 
S. Although A has no known medical conditions, S has high blood 
pressure. M declines to offer coverage to S.
    (ii) Conclusion. In this Example 1, M permissibly may decline to 
offer coverage to S because S has a manifested disorder (high blood 
pressure) that makes her ineligible for coverage under the policy's 
rules for eligibility.
    Example 2. (i) Facts. Same facts as Example 1, except that S 
does not have high blood pressure or any other known medical 
condition. The only health information relevant to S that M receives 
in the application indicates that both of S's parents are overweight 
and have high blood pressure. M declines to offer coverage to S.
    (ii) Conclusion. In this Example 2, M cannot decline to offer 
coverage to S because S does not have a manifested disease or 
disorder. The only health information M has that relates to her 
pertains to a manifested disease or disorder of family members, 
which as family medical history constitutes genetic information with 
respect to S. If M denies eligibility to S based on genetic 
information, the denial will violate this paragraph (b).

    (c) Prohibition on genetic information in setting premium rates.
    (1) In general. An issuer offering health insurance coverage in the 
individual market must not adjust premium amounts for an individual on 
the basis of genetic information regarding the individual or a family 
member of the individual.
    (2) Rule of construction. (i) Nothing in paragraph (c)(1) of this 
section precludes an issuer from adjusting premium amounts for an 
individual on the basis of a manifestation of a disease or disorder in 
that individual, or on the basis of a manifestation of a disease or 
disorder in a family member of that individual when the family member 
is covered under the policy that covers the individual.
    (ii) The manifestation of a disease or disorder in one individual 
cannot also be used as genetic information about other individuals 
covered under the policy issued to that individual and to further 
increase premium amounts.
    (3) Examples. The rules of this paragraph (c) are illustrated by 
the following examples:

    Example 1. (i) Facts. Individual B is covered under an 
individual health insurance policy through Issuer N. Every other 
policy year, before renewal, N requires policyholders to submit 
updated health information before the policy renewal date for 
purposes of determining an appropriate premium, in excess of any 
increases due to inflation, based on the policyholders' health 
status. B complies with that requirement. During the past year, B's 
blood glucose levels have increased significantly. N increases its 
premium for renewing B's policy to account for N's increased risk 
associated with B's elevated blood glucose levels.
    (ii) Conclusion. In this Example 1, N is permitted to increase 
the premium for B's policy on the basis of a manifested disorder 
(elevated blood glucose) in B.
    Example 2. (i) Facts. Same facts as Example 1, except that B's 
blood glucose levels have not increased and are well within the 
normal range. In providing updated health information to N, B 
indicates that both his mother and sister are being treated for 
adult onset diabetes mellitus (Type 2 diabetes). B provides this 
information voluntarily and not in response to a specific request 
for family medical history or other genetic information. N increases 
B's premium to account for B's genetic predisposition to develop 
Type 2 diabetes in the future.
    (ii) Conclusion. In this Example 2, N cannot increase B's 
premium on the basis of B's family medical history of Type 2 
diabetes, which is genetic information with respect to B. Since 
there is no manifestation of the disease in B at this point in time, 
N cannot increase B's premium.

    (d) Prohibition on genetic information as preexisting condition.
    (1) In general. An issuer offering health insurance coverage in the 
individual market may not, on the basis of genetic information, impose 
any preexisting condition exclusion with respect to that coverage.
    (2) Rule of construction. Nothing in paragraph (d)(1) of this 
section precludes an issuer from imposing any preexisting condition 
exclusion for an individual with respect to health insurance coverage 
on the basis of a manifestation of a disease or disorder in that 
individual.
    (3) Examples: The rules of this paragraph (d) are illustrated by 
the following examples:

    Example 1. (i) Facts. Individual C has encountered delays in 
receiving payment from the issuer of his individual health insurance 
policy for covered services. He decides to switch carriers and 
applies for an individual health insurance policy through Issuer O. 
C is generally in good health, but has arthritis for which he has 
received medical treatment. O offers C an individual policy that 
excludes coverage for a 12-month period for any services related to 
C's arthritis.
    (ii) Conclusion. In this Example 1, O is permitted to impose a 
preexisting condition exclusion with respect to C because C has a 
manifested disease (arthritis).
    Example 2. (i) Facts. Individual D applies for individual health 
insurance coverage through Issuer P. D has no known medical 
conditions. However, in response to P's request for medical 
information about D, P receives information from D's physician that 
indicates that both of D's parents have adult onset diabetes 
mellitus (Type 2 diabetes). P offers D an individual policy with a 
rider that permanently excludes coverage for any treatment related 
to diabetes that D may receive while covered by the policy, based on 
the fact that both of D's parents have the disease.
    (ii) Conclusion. In this Example 2, the rider violates this 
paragraph (d) because the preexisting condition exclusion is based 
on genetic information with respect to D (family medical history of 
Type 2 diabetes).

    (e) Limitation on requesting or requiring genetic testing.
    (1) General rule. Except as otherwise provided in this paragraph 
(e), an issuer

[[Page 51695]]

offering health insurance coverage in the individual market must not 
request or require an individual or a family member of the individual 
to undergo a genetic test.
    (2) Health care professional may recommend a genetic test. Nothing 
in paragraph (e)(1) of this section limits the authority of a health 
care professional who is providing health care services to an 
individual to request that the individual undergo a genetic test.
    (3) Examples. The rules of paragraphs (e)(1) and (e)(2) of this 
section are illustrated by the following examples:

    Example 1. (i) Facts. Individual E goes to a physician for a 
routine physical examination. The physician reviews E's family 
medical history, and E informs the physician that E's mother has 
been diagnosed with Huntington's Disease. The physician advises E 
that Huntington's Disease is hereditary, and recommends that E 
undergo a genetic test.
    (ii) Conclusion. In this Example 1, the physician is a health 
care professional who is providing health care services to E. 
Therefore, the physician's recommendation that E undergo the genetic 
test does not violate this paragraph (e).
    Example 2. (i) Facts. Individual F is covered by a health 
maintenance organization (HMO). F is a child being treated for 
leukemia. F's physician, who is employed by the HMO, is considering 
a treatment plan that includes six-mercaptopurine, a drug for 
treating leukemia in most children. However, the drug could be fatal 
if taken by a small percentage of children with a particular gene 
variant. F's physician recommends that F undergo a genetic test to 
detect this variant before proceeding with this course of treatment.
    (ii) Conclusion. In this Example 2, even though the physician is 
employed by the HMO, the physician is nonetheless a health care 
professional who is providing health care services to F. Therefore, 
the physician's recommendation that F undergo the genetic test does 
not violate this paragraph (e).

    (4) Determination regarding payment. (i) In general. As provided in 
this paragraph (e)(4), nothing in paragraph (e)(1) of this section 
precludes an issuer offering health insurance in the individual market 
from obtaining and using the results of a genetic test in making a 
determination regarding payment. For this purpose, ``payment'' has the 
meaning given such term in Sec.  164.501 of this subtitle of the 
privacy regulations issued under the Health Insurance Portability and 
Accountability Act. Thus, if an issuer conditions payment for an item 
or service based on its medical appropriateness and the medical 
appropriateness of the item or service depends on a covered 
individual's genetic makeup, the issuer is permitted to condition 
payment on the outcome of a genetic test, and may refuse payment if the 
covered individual does not undergo the genetic test.
    (ii) Limitation. An issuer in the individual market is permitted to 
request only the minimum amount of information necessary to make a 
determination regarding payment. The minimum amount of information 
necessary is determined in accordance with the minimum necessary 
standard in Sec.  164.502(b) of this subtitle of the privacy 
regulations issued under the Health Insurance Portability and 
Accountability Act.
    (iii) Examples. See paragraph (g) of this section for examples 
illustrating the rules of this paragraph (e)(4), as well as other 
provisions of this section.
    (5) Research exception. Notwithstanding paragraph (e)(1) of this 
section, an issuer may request, but not require, that an individual or 
family member covered under the same policy undergo a genetic test if 
all of the conditions of this paragraph (e)(5) are met:
    (i) Research in accordance with Federal regulations and applicable 
State or local law or regulations. The issuer makes the request 
pursuant to research, as defined in Sec.  46.102(d) of this subtitle, 
that complies with Part 46 of this subtitle or equivalent Federal 
regulations, and any applicable State or local law or regulations for 
the protection of human subjects in research.
    (ii) Written request for participation in research. The issuer 
makes the request in writing, and the request clearly indicates to each 
individual (or, in the case of a minor child, to the child's legal 
guardian) that--
    (A) Compliance with the request is voluntary; and
    (B) Noncompliance will have no effect on eligibility for benefits 
(as described in paragraph (b) of this section) or premium amounts (as 
described in paragraph (c) of this section).
    (iii) Prohibition on underwriting. No genetic information collected 
or acquired under this paragraph (e)(5) can be used for underwriting 
purposes (as described in paragraph (f)(1) of this section).
    (iv) Notice to Federal agencies. The issuer completes a copy of the 
``Notice of Research Exception under the Genetic Information 
Nondiscrimination Act'' authorized by the Secretary and provides the 
notice to the address specified in the instructions thereto.
    (f) Prohibitions on collection of genetic information.
    (1) For underwriting purposes.
    (i) General rule. An issuer offering health insurance coverage in 
the individual market must not collect (as defined in paragraph (a) of 
this section) genetic information for underwriting purposes. See 
paragraph (g) of this section for examples illustrating the rules of 
this paragraph (f)(1), as well as other provisions of this section.
    (ii) Underwriting purposes defined. Subject to paragraph 
(f)(1)(iii) of this section, underwriting purposes means, with respect 
to any issuer offering health insurance coverage in the individual 
market--
    (A) Rules for, or determination of, eligibility (including 
enrollment and continued eligibility) for benefits under the coverage;
    (B) The computation of premium amounts under the coverage;
    (C) The application of any preexisting condition exclusion under 
the coverage; and
    (D) Other activities related to the creation, renewal, or 
replacement of a contract of health insurance.
    (iii) Medical appropriateness. An issuer in the individual market 
may limit or exclude a benefit based on whether the benefit is 
medically appropriate, and the determination of whether the benefit is 
medically appropriate is not within the meaning of underwriting 
purposes. Accordingly, if an issuer conditions a benefit based on its 
medical appropriateness and the medical appropriateness of the benefit 
depends on a covered individual's genetic information, the issuer is 
permitted to condition the benefit on the genetic information. An 
issuer is permitted to request only the minimum amount of genetic 
information necessary to determine medical appropriateness, and may 
deny the benefit if the covered individual does not provide the genetic 
information required to determine medical appropriateness. See 
paragraph (g) of this section for examples illustrating the 
applicability of this paragraph (f)(1)(iii), as well as other 
provisions of this section.
    (2) Prior to or in connection with enrollment.
    (i) In general. An issuer offering health insurance coverage in the 
individual market must not collect genetic information with respect to 
any individual prior to that individual's enrollment under the coverage 
or in connection with that individual's enrollment. Whether or not an 
individual's information is collected prior to that individual's 
enrollment is determined at the time of collection.
    (ii) Incidental collection exception.
    (A) In general. If an issuer offering health insurance coverage in 
the individual market obtains genetic information incidental to the 
collection

[[Page 51696]]

of other information concerning any individual, the collection is not a 
violation of this paragraph (f)(2), as long as the collection is not 
for underwriting purposes in violation of paragraph (f)(1) of this 
section.
    (B) Limitation. The incidental collection exception of this 
paragraph (f)(2)(ii) does not apply in connection with any collection 
where it is reasonable to anticipate that health information will be 
received, unless the collection explicitly provides that genetic 
information should not be provided.
    (iii) Examples. The rules of this paragraph (f)(2) are illustrated 
by the following examples:

    Example 1. (i) Facts. Individual G applies for a health 
insurance policy through Issuer Q. Q's application materials ask for 
the applicant's medical history, but not for family medical history. 
The application's instructions state that no genetic information, 
including family medical history, should be provided. G answers the 
questions in the application completely and truthfully, but 
volunteers certain health information about diseases his parents 
had, believing that Q also needs this information.
    (ii) Conclusion. In this Example 1, G's family medical history 
is genetic information with respect to G. However, since Q did not 
request this genetic information, and Q's instructions stated that 
no genetic information should be provided, Q's collection is an 
incidental collection under paragraph (f)(2)(ii). However, Q may not 
use the genetic information it obtained incidentally for 
underwriting purposes.
    Example 2. (i) Facts. Individual H applies for a health 
insurance policy through Issuer R. R's application materials request 
that an applicant provide information on his or her individual 
medical history, including the names and contact information of 
physicians from whom the applicant sought treatment. The application 
includes a release which authorizes the physicians to furnish 
information to R. R forwards a request for health information about 
H, including the signed release, to his primary care physician. 
Although the request for information does not ask for genetic 
information, including family medical history, it does not state 
that no genetic information should be provided. The physician's 
office administrator includes part of H's family medical history in 
the package to R.
    (ii) Conclusion. In this Example 2, R's request was for health 
information solely about its applicant, H, which is not genetic 
information with respect to H. However, R's materials did not state 
that genetic information should not be provided. Therefore, R's 
collection of H's family medical history (which is genetic 
information with respect to H), violates the rule against collection 
of genetic information and does not qualify for the incidental 
collection exception under paragraph (f)(2)(ii).
    Example 3. (i) Facts. Issuer S acquires Issuer T. S requests T's 
records, stating that S should not provide genetic information and 
should review the records to excise any genetic information. T 
assembles the data requested by S and, although T reviews it to 
delete genetic information, the data from a specific region included 
some individuals' family medical history. Consequently, S receives 
genetic information about some of T's covered individuals.
    (ii) Conclusion. In this Example 3, S's request for health 
information explicitly stated that genetic information should not be 
provided. Therefore, its collection of genetic information was 
within the incidental collection exception. However, S may not use 
the genetic information it obtained incidentally for underwriting 
purposes.

    (g) Examples regarding determinations of medical appropriateness. 
The application of the rules of paragraphs (e) and (f) of this section 
to issuer determinations of medical appropriateness is illustrated by 
the following examples:

    Example 1. (i) Facts. Individual I has an individual health 
insurance policy through Issuer U that covers genetic testing for 
celiac disease for individuals who have family members with this 
condition. I's policy includes dependent coverage. After I's son is 
diagnosed with celiac disease, I undergoes a genetic test and 
promptly submits a claim for the test to U for reimbursement. U asks 
I to provide the results of the genetic test before the claim is 
paid.
    (ii) Conclusion. In this Example 1, under the rules of paragraph 
(e)(4) of this section, U is permitted to request only the minimum 
amount of information necessary to make a decision regarding 
payment. Because the results of the test are not necessary for U to 
make a decision regarding the payment of I's claim, U's request for 
the results of the genetic test violates paragraph (e) of this 
section.
    Example 2. (i) Facts. Individual J has an individual health 
insurance policy through Issuer V that covers a yearly mammogram for 
participants starting at age 40, or at age 30 for those with 
increased risk for breast cancer, including individuals with BRCA1 
or BRCA2 gene mutations. J is 33 years old and has the BRCA2 
mutation. J undergoes a mammogram and promptly submits a claim to V 
for reimbursement. V asks J for evidence of increased risk of breast 
cancer, such as the results of a genetic test, before the claim for 
the mammogram is paid.
    (ii) Conclusion. In this Example 2, V does not violate 
paragraphs (e) or (f) of this section. Under paragraph (e), an 
issuer is permitted to request and use the results of a genetic test 
to make a determination regarding payment, provided the issuer 
requests only the minimum amount of information necessary. Because 
the medical appropriateness of the mammogram depends on the covered 
individual's genetic makeup, the minimum amount of information 
necessary includes the results of the genetic test. Similarly, V 
does not violate paragraph (f) of this section because an issuer is 
permitted to request genetic information in making a determination 
regarding the medical appropriateness of a claim if the genetic 
information is necessary to make the determination (and the genetic 
information is not used for underwriting purposes).
    Example 3. (i) Facts. Individual K was previously diagnosed with 
and treated for breast cancer, which is currently in remission. In 
accordance with the recommendation of K's physician, K has been 
taking a regular dose of tamoxifen to help prevent a recurrence. K 
has an individual health insurance policy through Issuer W which 
adopts a new policy requiring patients taking tamoxifen to undergo a 
genetic test to ensure that tamoxifen is medically appropriate for 
their genetic makeup. In accordance with, at the time, the latest 
scientific research, tamoxifen is not helpful in up to 7 percent of 
breast cancer patients with certain variations of the gene for 
making the CYP2D6 enzyme. If a patient has a gene variant 
making tamoxifen not medically appropriate, W does not pay for the 
tamoxifen prescription.
    (ii) Conclusion. In this Example 3, W does not violate paragraph 
(e) of this section if it conditions future payments for the 
tamoxifen prescription on K's undergoing a genetic test to determine 
the genetic markers K has for making the CYP2D6 enzyme. W 
also does not violate paragraph (e) of this section if it refuses 
future payment if the results of the genetic test indicate that 
tamoxifen is not medically appropriate for K.

    (h) Applicability date. The provisions of this section are 
effective with respect to health insurance coverage offered, sold, 
issued, renewed, in effect, or operated in the individual market on or 
after December 7, 2009.

0
15. The heading for subpart D is revised to read as follows:

Subpart D--Preemption; Excepted Benefits

0
16. Section 148.220 is amended by adding two new sentences at the end 
of paragraph (b)(4) to read as follows:


Sec.  148.220  Excepted benefits.

* * * * *
    (b) * * *
    (4) * * *. The requirements of this part 148 (including genetic 
nondiscrimination requirements), do not apply to Medicare supplemental 
health insurance policies. However, Medicare supplemental health 
insurance policies are subject to similar genetic nondiscrimination 
requirements under section 104 of the Genetic Information 
Nondiscrimination Act of 2008 (Pub. L. 110-233), as incorporated into 
the NAIC Model Regulation relating to sections 1882(s)(2)(e) and (x) of 
the Act (The NAIC Model Regulation can be accessed at http://www.naic.org.).
* * * * *


[[Page 51697]]


    Approved: May 7, 2009.
Charlene Frizzera,
Acting Administrator, Centers for Medicare & Medicaid Services.
    Approved: May 15, 2009.
Kathleen Sebelius,
Secretary.
[FR Doc. E9-22504 Filed 10-1-09; 11:15 am]
BILLING CODE 4830-01-P; 4510-29-P; 4120-01-P