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MEMORANDUM

TO:

Sharen Muraoka, American Cancer Society, California Division Public Issues Director John G. Narkin Genetic Information Legislative Overview

FROM:
Re:

DATE:

January 6,1997

I. CURRENT AND PROPOSED LEGISLATIVE PROTECTION


Thanks to the legislative initiatives of State Senator Patrick Johnston, California residents now possess significant protection against misuse of information derived from genetic testing by health care plans, employee welfare benefit plans and certain life and disability insurers (collectively" the "Regulated Parties"). In addition, legislation authored by Senator Johnston prohibits the Regulated Parties from "seeking, using or maintaining" information regarding "genetic characteristics for any nontheraputic purpose." The legislation also prohibits the Regulated Parties from "discriminating" in enrollment, rates, renewal or other terms and conditions of any policy they issue. On the Federal level, in August 1996, Congress passed, and President Clinton signed into law, the Health Insarance Portability and Accountability Act of 1996 (also known as the "Kennedy-Kassebaum Bill'), P.L.104-191. Among other things, the Kennedy-Kassebaum Bill prohibits group health plans and heatth insurance issuers from "establishing rules" conditioning eligibilitv or continued eligibility on the basis of individuals' (or their dependents') "genetic information." More specific guidance interpreting this provision awaits the promulgation of regulations by the U.S. Department of Health and Human Services.

Apart from the Kennedy-Kassebaum Bill, several other relevant bills were introduced in the l04th session of Congress. A summary of the most significant proposed Federal legislation is attached to this memorandum as Exhibit A. In general, Congressional initiatives have attempted to control the disclosure and confidential use of "genetic information" -- not merely the results of "genetic testing." The distinction is critical. As Kathy L. Hudson, the Assistant Director of Policy Coordination at the National Center for Human Genone Research, National Institutes of Health, observed, it is important to expand the scope of protection beyond genetic testing to restrict improper use of "genetic information generated by family history, physical examination or...medical record[s]." This is because: "fi]imiting the scope of protection to results of genetic tests means that insurers are only prohibited from using the results of a chemical test of DNA' or in some cases, the protein product of a gene. But
insurers can use other phenotypic indicators, patterns

Genetic Information Legislative Overvrew Januara 6. L997 Page Two

of inheritance of genetic characteristics or even requests -for genetic testing as the basis o_f discrimination. Meaningful protection against genetic discrimination requires that insurers be prohibited from using a// information about genes. gene products or inherited characteristics to denv or limit insurance coveraset
(emphasis supplied)

In addition, the need to circumscribe use of genetic information is not limited to insurance companies or employee welfare benefit plans. As Representative Jim McDermott said in support of the Medical Privacy in the Age af New Technologres Acl, "Genetic health information is an especially sensitive part of a patient's medical record....One recent study documented 200 cases of healthy people being denied jobs, insurance, the right to adopt, and educational opportunities because they either had or were suspected to have a genetic predisposition for a disease, even though they did not actually have the disease." For that reason, at least one proposed Federal bill, 5.1898 (the Genetic Confidentiality and Nondiscriminstion Act of 1996), would affirmatively prohibit employers or potential employers from seeking to obtain, obtaining or using genetic information in connection with employment decisions. See also, Proposed Legislation Summary, Exhibit A. This legislative protection would complement an administrative guideline established by the U.S. Equal Employment Opportunity Commission on March 15, 1995, which expands the definition of "disability" in the Americans with Disabilities Act of 1990 to include persons having a genetic predisposition to illness.

II. DESIRABILITY OF ADDITIONAL LEGISLATTVf, PROTECTION


Taken as a whole, the proposed Federal legislation identified in Exhibit A' reflects a strong sensitivity to the issue of genetic information in Congress. It is therefore reasonable to expect that several of these bills will be reintroduced during the new Congressional session and thit important Federal legislation may be passed into law within the next 24 months. There is, of course, no assurance that such legislation will actually be forthcoming or enacted.

Hudson et al. Genetic Discrimination and Health Insurance; An Urgent Need for Reforz (Science . october 1995). a cop.v of which is appended to this memorandum at Exhibit B. See Congressional Record at E829 (May 16. 1996). '3 It is signrficant to note that Senator Dianne Feinstein is the sponsor of S. 1600. the Genetic Fairness Act of 1996, and that Representative Nancv Pelosi is a co-sponsor of H.R. 3482, the Medical Privaclt in the Age of l'lew

'

S4

Technologies Act.

Genetic Information Legislative Overview Januara 6,1997 Page Three

Whatever may or may not happen in Congress, it is appropriate that California, capitalizing on the leadership provided by Senator Johnston, should avail itself of the opportunity to enhance the level of protection currently available to residents of this state. Certiinlv, tne American Cancer Society should consider the advantages ofjoining with other interested groups (such as the National Action Plan on Breast Cancer) in forming a strategic alliance designed to eliminate a// discrinunatory uses of genetic information in California. While this issue requires more exhaustive research and in-depth consultation with responsible national authorities, the following supplementary protections appear desirable:

' Strict limitations on disclosure of genetic informationa by all entities that maintain, transmit or exchange medical information as a regular part of their business. By carefully limiting disclosure of genetic information in the first instance, the possibilitv that such information can later be put to discriminatory use is effectively minimized; ' Explicit provisions prohibiting discriminatory use of genetic information by all entities that may have an economic incentive to discriminate against persons possessing genetic characteristics suggesting a predisposition to disease. Such parties may include employers, lenders, educational institutions, adoption agencies and similar lvpes of organizations;
o Enhanced monetary penalties for improper use of genetic information. Under existing California law, the penalties -eoverning Regulated Parties' misuse of genetic testing

information may be too modest to provide an effective deterrent to willful or negligent violations of the law. (Compare sanctions authorized by California Senate Bill 1740 with comparable provisions of Federal Senate Bill 1898, described in Exhibit A); simplicity of reference, it might be beneficial to codify all genetic information protections in one new "omnibus" section of the California
Code.

r For purposes of cohesion, clarity and

Due to Senator Johnston's efforts, Californians now have protection against "genetic discrimination" in the area of health, life and disability insurance coverage. While current state and Federal law represents a promising beginning, the legislative task is not complete as long as Californians remain subject to any kind of discriminatory action based upon their inalterable genetic make-up.

For purposes of these limitatrons. the term "genetic information" should embrace more than "genetic test" results, See supra at L-2. ln addrtion. the term "genetic charactenstics" as currentl-v defined under Cahforma law seems too restrictive insofar as the definition. even after recent amendment. still emphasizes "scientifically or medrcally identifiable gene[s] and chromosome[s]" that are "l<nown" to be a cause of disease ot "determined to be associated" with a "statisticallv increased rislr" of disease. Despite broader language added to the definition in September 1996, Regulated Parties mav nevertheless feel free to make corerage decisions (or to impose discriminatory polic-v terms) on the basis of "inherited characteristics" that are not conclusively established or on the basis ofother untenable factors. such as an insured's request for genetic information.

''EXHIBIT A''
Sisnificant Proposed Federal Genetic Information Legislation

I. Senate Bills
A. Genetic Conjidentiality and Nondiscrimination Act of 1996,
^S.18g8

Introduced on June 24,1996 by Senator Pete Domenici, this bill provides that "no person who, in the ordinary course ofbusiness, practice ofa profession, or rendering ofa service, creares, srores, receives or furnishes genetic information" may disclose such information without express written authorization or except under narrowly defined circumstances (such as under a court order). The Bill also prohibits employers from seeking to obtain, obtaining or using genetic information and it bans employers from requirin-q employees and prospective employees to submit to genetic testing. A private right of action for violations of the Act is authorized in both Federal and State Court, with strict penalties provided: the greater of actual damages or $50,000 for "negligent" violations (subject to trebling in cases where "monetary gain" can be established) and the greater of actual damages or $100,000 (and possible "punitive" damages) for "wilful violations, not including costs and attorneys'fees. Other provisions of the bill proscribe discrimination by insurers.

B. Genetic Information Nondiscrimination in Health Insurance Act of 1996, 5.1694 (Identical to H.R 2748)
Introduced on April 23,1996, this bill provides that insurance providers "may not deny or cancel health coverage, or vary the premiums, terms or conditions for health coverage" (a) on the basis of genetic information [defined broadly as "information about genes, gene products, or inherited characteristics"] or (b) on the basis that an individual or family member "requested or received genetic services" [defined as "services to obtain, assess, and interpret genetic information for diagnostic and therapeutic purposes, and for genetic education and counselling"].

C.

Genetic Fairness Act of 1996, S. 1600

Introduced by Senator Dianne Feinstein on March 7, 1996, this bill would prohibit insurers, HMOs, and employee welfare benefit plan providers from making coverage determinations or changing policy teffns and conditions "on the basis of any genetic information concerning an indMdual or family member or on the basis of an individual's or family member's request for or receipt of genetic services. The definitions of "genetic information" and "genetic services" are virtually identical to those set forth in S. 1694.

D. Genertc Privacy and Nondiscrimination Act of 1995, S. 1416 (Identical to H.R 2690)
Introduced by Senator Mark Hatfield on November 15, 1995, this bill would, with few carefully delineated exceptions, prohibit all entities from disclosing genetic information without express written authorization, Like S, 1898, the bill would bar employers from seeking, obtaining or using genetic information of employees and prospective employees and it would likewise prevent employers from requiring genetic tests. Private enforcement action is authorized under the Civil

"EXHIBIT A" (Continued)


Significant Proposed Federal Genetic Information Legislation

I. Senate Bills (Continued)


Rights Act of 1964, The bill also prohibits discrimination by insurers "offering health insurance,,, but it would permit requests for genetic testing in connection with applications for other kinds of insurance when (a) "the use of the results of such test is disclosedib the applicant" and (b) the applicant provides " specifi c written authorization. "

II. Ilouse Bills


A, Medical Privacy in the Age of New Technologies Act, H.R 3492

Introduced on May 16, 1996 by Representative Jim McDermott (and co-sponsored by Representative Nancy Pelosi), this bill would provide an elaborate -- and comprehensive -scheme establishing safeguards and restricting the use and disclosure of "personal health information" by "health information trustees," a term which encompasses any "person or entity that creates, receives, obtains, maintains, uses, or transmits protected personal healtir information...and any employee, agent or contractor of such a person." Although the provisions of this bill are highly detailed (and quite beyond the more limited issue of genetic information), this bill contains several provisions which might be usefully incorporated in California state legislation.
B. Proposed Amendment to the Fair Labor standards Act of 1938, H.R 3477

Introduced by Representative Joseph Kennedy on May 16, 1996, this bill would prohibit employers from obtaining "from any source genetic information about an employee or prospective employee" unless such employee or applicant provides written authorization after receiving from the employer a "written statement of the uses which the employer intends for the information." C. Genaic Information Health Insurance Nondiscrimination Act of 1996,

H.R

4008

Incorporating the same definition of "genetic information" described above, this bill would also prohibit insurers and group health plans from making coverage or policy decisions (a) "on the basis of genetic information" or (b) "on the basis of [a] request for, or receipt of, genetic information or a genetic test." The bill further prohibits insurers and group health plans from requesting genetic information and/or tests from applicants, beneficiaries or plan participants and it prohibits dissemination of genetic information by insurers and group health plans except under narrowly circumscribed circumstances.

D. Women's Health Equity Aci of

1996,

H.R

317E

Would mandate virtually the same protections set forth in the Genetic Information Health Insurance Nondiscrimination Act of 1996

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