JKM C.S.H.B. 39 75(R) BILL ANALYSIS ECONOMIC DEVELOPMENT C.S.H.B. 39 By: McCall 3-14-97 Committee Report (Substituted) BACKGROUND Scientists have determined that certain genetic codes may predispose individuals to some diseases. If individuals get gene screens to determine if they are predisposed to diseases, they can be discriminated against if an employer or insurance company receives the information. For example, an employer may decide to fire, refuse to hire, or reduce compensation, for fear the employee will get sick and miss a great deal of work. Insurance companies may reject, deny, limit, cancel, refuse to renew, or increase the premiums for someone with a predisposition, in order to avoid losses from a costly, long illness. PURPOSE To prohibit discriminatory use of genetic information by employers, labor organizations, employment agencies, licensing authorities, and health insurers. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Chapter 21, Labor Code, by adding Subchapter H. Discriminatory Use of Genetic Information. Sec. 21.401 defines "DNA", "genetic information", "genetic test", and "RNA". Sec. 21.402(a) makes it an unlawful employment practice for an employer to fail or refuse to hire, discharge, or discriminate against an individual in terms, conditions, or privileges of employment based on genetic information or refusal to submit to a genetic test. Sec. 21.402(b) makes in an unlawful employment practice for a labor organization to exclude or expel from membership or discriminate against an individual based on genetic information or refusal to submit to a genetic test. Sec. 21.402(c) makes it an unlawful employment practice for an employment agency to classify or refers to employment, fail or refuse to refer for employment, or discriminate against an individual based on genetic information or refusal to submit to a genetic test. Sec 21.402(d) makes it an unlawful employment practice an employer, labor organization, or employment agency, based on genetic information or refusal to submit to a genetic test, to limit, segregate, or classify an employee, member or applicant for employment or membership in a way that would deprive or tend to deprive the employee, member, or applicant of employment opportunities or otherwise adversely affect his or her status. Sec. 21.403(a) states that genetic information is confidential and privileged and that a person who holds that information may not disclose or be compelled to disclose genetic information about an individual unless the individual has authorized disclosure as provided by Subsection (b). This section applies to a redisclosure of genetic information by a secondary recipient of the information. Sec. 21.403(b) allows for an individual or legal representative of that individual to authorize the release of genetic information through a written authorization that includes a description of the information to be disclosed, the name of the person to whom the disclosure is made, and the purpose for the disclosure. Sec. 21.403(c) establishes the conditions by which genetic information may be disclosed without the authorization required under Subsection (b). Sec. 21.403(d) establishes additional conditions by which genetic information by be disclosed without the authorization required under Subsection (b). Sec. 21.404 Provides that an individual who submits to a genetic test has the right to know the results of that test and on written request by the individual, the entity who performed the test shall disclose those results to the individual or designated physician. Sec. 21.405 Requires that a genetic sample be immediately destroyed, unless the sample is retained under a court order, the individual tested authorizes retention, the sample is for research cleared by the institutional review board under federal law, or the sample was obtained for a screening test established by the Texas Department of Health. SECTION 2. Amends Chapter 20, Title 132, Revised Statutes, by adding Article 9031. Sec. 1 defines "DNA", "genetic information," "genetic test," "licensing authority," "occupational license," "political subdivision," "RNA," and "state agency." Sec. 2 states that a licensing authority may not deny, suspend, revoke, or refuse to renew an occupational license or take disciplinary action against a license holder based on the refusal to submit to a genetic test or reveal whether a test has been taken or the results of such a test. Sec. 3(a) states that genetic information is confidential and privileged and that a person or entity that holds such information or is a secondary recipient of the information, may not disclose or be compelled to disclose the genetic information unless disclosure is approved by the individual. Sec 3(b) lays out the conditions by which an individual or a legal representative may authorize the release of genetic information. Sec 3(c) establishes the conditions by which genetic information may be disclosed without the authorization required under Subsection (b). Subsection (d) lays out additional exceptions to Subsection (c) under which genetic information relating to an individual may be disclosed without the authorization required in Subsection (b). Sec 4 Provides that an individual who submits to a genetic test has the right to know the results of that test and that on written request, the entity that performed the test shall disclose the test results to that individual or designated physician. Sec 5 Requires that a genetic sample be immediately destroyed, unless the sample is retained under a court order, the individual tested authorizes retention, the sample is for research cleared by the institutional review board under federal law, or the sample was obtained for a screening test established by the Texas Department of Health. SECTION 3. Amends Subchapter E, Chapter 21, Insurance Code, by adding Article 21.73. Sec. 1 defines "DNA," "genetic information," "genetic test," "group health benefit plan", "RNA". Sec. 2 (a) Provides that this article applies to a group health benefit plan that: (1) Provides medical or surgical expenses incurred as a result of a health condition, accident, or sickness including (a) a group, blanket, or franchised insurance policy insurance agreement, a group hospital service contract, or a group evidence of coverage that is offered by: an insurance company, a group hospital service corporation, a fraternal benefit society, a stipulated premium insurance company or a health maintenance organization; or (b) to the extent permitted by the Employee Retirement Income Security Act of 1974, a group health benefit plan that is offered by a multiple employer welfare arrangement or another entity not licensed under this code or another insurance law of Texas that contracts directly for health care services on a risk-sharing basis, including an entity that contracts for health care services on a capitation basis, or another analogous benefit arrangement, or (2) is offered by an approved nonprofit health corporation that is certified under Section 5.01 (a), Medical Practice Act, and that holds a certificate of authority issued by the commissioner of this code. Sec. 2(b) sets out what this article does not apply to. Sec. 3(a) A group health benefit plan issuer may not use genetic information to adversely affect eligibility for or coverage under the group health benefit plan. Sec.3(b) Establishes procedure a group health benefit plan issuer must follow if the issuer requests that an applicant for coverage submit to a genetic test. Sec.3(c)Provides that the applicant shall state whether he or she elects to be informed of the results of the test. If the applicant elects to be informed, the group health benefit plan issuer will be informed of the test results. Sec. 3 (c) The group health benefit plan issuer shall ensure that the applicant receives an interpretation of the test results by a health care practitioner and a health care practitioner designated by the applicant receives a copy of the results. Sec.3(d) States that a group health benefit plan issuer may not use the results of a genetic test as an inducement for the purchase of coverage under the plan. Sec 4 (a) States that, except as provided by Subsections (c) and (d) of this section, genetic information is confidential and privileged regardless of the source of information. A person or entity may not disclose genetic information about an individual unless authorized as provided by Subsection (b) of this section. This subsection applies to redisclosure of genetic information by a secondary recipient of the information. Sec.4(b) Lays out requirements for an individual or the legal representative of an individual to authorize the disclosure of genetic information. Sec. 4 (c) Lays out requirements for disclosing genetic information relating to an individual without the authorization required under Subsection (b). Sec.4(d) This subsection provides that an issuer may not redisclose genetic information unless that disclosure is consistent with authorizations made under an authorization form executed under (b). The issuer may redisclose genetic information for actuarial or research studies, to the department to enforce this article, or directly related to enabling business decisions about an insurance company. Sec.4(e) Requires that a redisclosure made under Subsection (d) of this section may contain only information reasonably necessary to accomplish the purpose for which the information is disclosed. Sec. 5. Provides that an individual who submits to a genetic test has the right to know the results of that test and that on written request, the plan issuer or entity that performed the test shall disclose the test results to that individual or designated physician. Sec. 6 Requires that a sample of genetic material taken for a genetic test shall be destroyed after the purpose for which the sample was obtained unless the sample is retained for a court order, the individual tested authorizes retention of the sample for purpose of medical treatment or scientific research, the sample is retained for research cleared by the institutional review board under federal law, or the sample was obtained for a screening test established by the TX Dept. of Health. Sec. 7. Allows for the commissioner of insurance, on finding of a violation of this article, to issue a cease and desist order. If the plan issuer refuses or fails to comply with the order the commissioner may revoke or suspend the issuer's certificate of operation. Violations of this article are subject to administrative penalty as provided by Article 1.10E, Insurance Code. SECTION 4. Effective date. SECTION 5. Applies Article 9031, Revised Statutes, as added by Section 2 of this Act, to licenses issued or renewed by a licensing authority on or after the effective date of this act. SECTION 6. Applies Article 21.73, Insurance Code, as added by Section 3 of this Act, to health insurance policies or an evidence of coverage that is delivered, issued for delivery, or renewed on or after January 1, 1998. SECTION 7. Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE SECTION 1. Sec. 21.401 Definitions. Adds a definition for "DNA". Deletes the definition for "genetic characteristic". Slightly shortens the definition for "genetic information". Expands on the definition of "genetic test". Adds a definition for "RNA". Sec. 21.402 HB 39 made it an unlawful practice for employers, labor organizations, or employment agencies to make decisions concerning an individual based on genetic information derived from a genetic test. CSHB 39 makes it an unlawful practice for these entities to make decisions concerning an individual based on any genetic information. Sec. 21.403 of CSHB 39, "or entity" is deleted from who is required in a written authorization for the disclosure of genetic information. Subsection (d) is added to list other exceptions, besides those found in Subsection (c), under which genetic information may be disclosed without written authorization, as required under (b). The exceptions are when the information is from a research study where the informed consent and use of information is governed by national standards, and when the information does not identify a particular individual. Sec. 21.404 The original Sec.21.404 dealt with the retention of sample. The substitute 21.404 addresses the right of an individual to know the results of a genetic test. Sec. 21.405 is added in the substitute and provides the conditions under which a genetic sample is not required to be immediately destroyed. SECTION 2. Sec. 1 The committee substitute adds a definition for "DNA". Deletes the definition for "Genetic characteristic". Slightly shortens the definition for "genetic information". Expands on the definition of "genetic test". Adds a definition for "RNA". Sec. 3. Adds subsection (d) as an exception to circumstances under which genetic information can be disclosed. Sec. 4. The original Sec. 4 dealt with retention of sample, and becomes Sec. 5 in the substitute. The substitute Sec. 4 deals with the right to know test results. Sec. 5. of CSHB 39 adds conditions under which a sample may be retained. Requires that a genetic sample be immediately destroyed, unless the sample is retained under a court order, the individual tested authorizes retention, the sample is for research cleared by the institutional review board under federal law, or the sample was obtained for a screening test established by the Texas Department of Health. SECTION 3 Sec. 1 of CSHB 39, in definitions adds a definition for "DNA". Deletes the definition for "genetic characteristic". Slightly shortens the definition for "genetic information". Expands on the definition of "genetic test". Adds a definition for "group health benefit plan". Deletes the definition for "insurer". Adds a definition for "RNA". Sec. 2 of HB 39 dealt with the use of genetic information by insurers. Sec. 2, CSHB deals with the scope of the article. Sec. 3 of CSHB 39 was Sec. 2 in HB 39. Sec. 3 of CSHB 39 retains the same provisions of this section except that "insurer" is replaced with "group health benefit plan issuer" or "issuer" and "insurance" is replaced with "coverage". Sec. 4 of CSHB 39 was Sec. 3 in HB 39. Sec. 4 (b) of CSHB 39 differs from Sec. 3 (b) of HB 39 in that Sec. 4 (b) adds the following requirements for an authorization by an individual or legal representative of an individual for disclosing genetic information. The authorization must be written in plain language, be dated, contain a specific description of the information to be disclosed, identify or describe each person authorized to disclose the genetic information to a group health benefit plan issuer, identify or describe the individuals or entities to whom the disclosure or subsequent redisclosure of the genetic information may be made, describe the specific purpose of the disclosure, be signed by the individual or the legal representative and, if the disclosure is for claiming proceeds of any affected life insurance policy, the claimant, and advise the individual or legal representative that the individual's authorized representative is entitled to receive a copy of the authorization form. CSHB 39 adds subsection (d) which provides that an issuer may not redisclose genetic information unless that disclosure is consistent with authorizations made under an authorization form executed under (b). The issuer may redisclose genetic information for actuarial or research studies, to the department to enforce this article, or directly related to enabling business decisions about an insurance company. CSHB 39 adds subsection (e) which states that a redisclosure authorized under Subsection (d) may only contain information reasonably necessary to accomplish the purpose for which the information is disclosed. Sec. 5 is added in CSHB 39. Provides that an individual who submits to a genetic test has the right to know the results of that test and that on written request, the plan issuer or entity that performed the test shall disclose the test results to that individual or designated physician. Sec. 6 of CSHB 39 was Sec. 4 in HB 39. Sec. 6 of CSHB 39 deletes the language "remains the property of that individual" and specifically delineates under what four circumstances genetic material is not required to be destroyed promptly after the purpose for which the smaple was obtained is accomplished. Sec. 7 of CSHB 39 was Sec. 5 of HB 39 which provides for penalties for unfair practices under Article 21.21 in the Labor Code. Sec. 7 of CSHB 39 amends the penalties section to provide for an administrative penalty that allows the commissioner to enter a cease and desist order under Article 1.10A of the Labor Code. If the health benefit plan issuer refuses or fails to comply with the cease and desist order, under Art. 1.10E of the Labor Code, the commissioner may then revoke or suspend the issuer's certificate of authority or other authorization to operate in Texas.