The Genetic Information Nondiscrimination Act of 2008 (“GINA”) becomes effective November 21, 2009, applies to businesses with 15 or more employees, and is likely to have a potentially significant impact on a variety of employer obligations, policies and practices. For example, GINA will impact existing Company employee handbook policies, practices relating to medical and physical examinations, wellness programs, and record-keeping and training practices. In addition, effective immediately, employers must post the new version of the EEOC poster – “Equal Employment Opportunity is the Law” – which incorporates both GINA’s new requirements as well as changes made by the recent amendments to the Americans with Disabilities Act (“ADA”), which took effect on January 1, 2009.

For more information, click on the following link:  http://www.jdsupra.com/post/documentViewer.aspx?fid=af5f4c95-fa50-41cb-9f9c-dd0fce63ca46.  This link takes you to a three page summary of GINA in either a Word or PDF format, which was written by Stefan.  Additionally, if you go to this link, you can obtain a free EEOC compliance poster, which includes GINA.  This two page poster is produced by the EEOC and is in PDF format.

1. Jacquie Seemann

Partner at Thomson Playford Cutlers

This is fascinating from an Australian perspective. We have nothing like GINA – the closest we come is provisions in our disability discrimation legislation which prohibit discrimination on the ground of a ‘presumed’ disability, including a presumed future disability.

2. Charles Krugel www.charlesakrugel.com

Regarding Jacquie’s comment about perceived disability, it’s the same in the U.S. under our federal & most state disability laws.

Not sure how GINA is any different from perceived disability when, based on my casual assessment of it GINA, it doesn’t appear to differ greatly from the perceived disability status.

Possibly, this is a matter of the U.S. Congresses addressing an issue that’s already been addressed in prior legislation; i.e., they’re calling greater attention to a hot and developing medical and privacy issue.

Speaking of privacy, I’m also, not sure of the GINA implications or overlaps with HIPPA either. Hopefully, these concerns will be addressed sooner rather than later.

3.        Stefan R. Miller

California Employment Law Attorney, Independent Workplace Investigator, Trainer and Principal of The Employers Law Group

I agree that there is a lot of overlap between GINA’s prohibitions and existing laws prohibiting perceived disability discrimination, including discrimination against someone for having a record of impairment (e.g., cancer). Like Charles, I agree that part of this is Congress’ effort to raise the profile of an emerging issue, particularly in the face of what appears to be some sort of significant legislative changes on health care. The big target of GINA was the health insurance industry but since a lot of information feeds through to health insurance companies from employers, I suspect Congress felt that they need to include protections in this particular piece of legislation. GINA also applies to employer-sponsored health insurance plans and, therefore, prohibits collection/use of genetic information in that sphere as well.

While I do not profess to be a GINA “expert”, I’ll take a stab at trying to identify some “new” wrinkles to GINA which fill in prior “gaps” in the law.

1. GINA establishes clear prohibitions about even seeking/collecting genetic information in the first place both through pre-employment and job pre-qualification medical examinations as well as in connection with wellness programs.

2. GINA also codifies into statute privacy provisions relating to how genetic information – including information inadvertently learned by the employer – must be handled/protected. I don’t know whether there are other existing federal statutory provisions that occupy this space. (In California, we have the Confidentiality of Medical Information Act.)

3. Notwithstanding substantial overlap with perceived disability discrimination under the ADA, there appears to be a subtle gap filled in by GINA. (I add this caveat: being out here in California where plaintiffs rarely sue under federal law — as California law is significantly more favorable — I will defer to those with more knowledge of ADA.) One thing GINA appears to be driving at is the notion of discriminating against someone because of the possibility one is susceptible to one day having a disease or genetic condition at some point in the future due to family history. I don’t believe that is covered under the ADA. In other words, the employer learns (either through an inadvertent self-disclosure or through a pre-employment medical exam) that Applicant’s sibling or parent was just diagnosed with a serious form of cancer. While there is no evidence that Applicant has the disease or that the employer believes Applicant is presently disabled in any way, employer refuses to hire Applicant for fear that at some point in the future, Applicant will become disabled. Another example would simply be if an employer terminated Employee X after learning that a sibling or parent has some form of cancer out of a generic concern employee would one day get the same cancer and have increased health insurance premiums or become disabled — even if employer contends it had no knowledge of Employee X having cancer and that, in fact, employer did not believe Employee X had cancer.

4. Even on the HIPAA/GINA issues, here again, I believe the changes are primarily on the insurance side. However, I believe that HIPAA still governs and applies to unauthorized disclosures of genetic information, an areas that GINA does not address. As for insurance issues, my understanding is that HIPAA permitted underwriters to use genetic information for underwriting purposes. GINA prohibits health insurers from collecting/using genetic information for underwriting/eligibility. My further understanding is that, while HIPAA already provides some protection against genetic discrimination in group insurance, GINA extends coverage to the individual insurance market.

I’d be interested in hearing anyone else’s thoughts or insights.

- Stefan

Stefan R. Miller wrote:

Here’s another resource I recently came across at John’s Hopkins Genetics & Public Policy Center. Consistent with our prior discussion about the primary purpose of GINA, it appears that most of the information on their website is focused on the health care side. But here are some FAQs which are also directed at employment discrimination:http://www.dnapolicy.org/gina/faqs.html

I know there are a few other limited exceptions but I also came across something else I had not seen previously which mentioned an employer can conduct genetic testing if expressly authorized by the employee and if the information does NOT go to the employer but instead goes only to the employee and his/her treating health care providers. I presume this is in connection with an employer wellness program but there was no specific citation or reference.

My articles focus on the human resources & labor & employment law issues encountered by dental practices. You can read the 1st article, from the December/January issue, which discusses background checking and screening here (PDF).

Ironically, this coincides with the 1/13/09 statement from the Equal Employment Opportunity Commission that a Chicago dental practice settled a federal sexual & religious harassment & retaliation lawsuit for $462,500. You can read the actual settlement document (“consent decree”) here (PDF). Obviously, this suit & settlement will be a future topic.

Department Focus: Human Resources–From Collaboration Comes Motivation

Motivating your unionized work force to achieve a top level of performance must be a joint effort between labor and management.

Motivating unionized frontline staff can be like pushing the proverbial boulder up a mountain for hospital leadership. But it doesn’t have to be that way if executives and union representatives both put their shoulders to the stone.

At the University of Miami Hospital, local union representatives and hospital leaders are taking a collaborative approach to motivating union members with a joint training program designed to unify the entire work force and improve both quality of care and patient satisfaction.

Hospital leadership traditionally had communicated performance expectations to various groups of staff members individually—with questionable results, says Errol Douglas, human resources director at the 312-staffed-bed hospital. “Now we’re going to approach it very differently. We’re going to do joint training with the union shop stewards and the department directors,” Douglas says. “That’s never happened here before. So we’re going to be in the room together, airing a common message: It’s a new day. Let’s work together.”

The union leadership and the hospital’s CEO will collaborate to decide which processes will motivate performance throughout the hospital—not just union or nonunion workers specifically. The overarching goal is to create best practices across all areas of the hospital while increasing employee satisfaction. The union representative and hospital management will then work together to help staff meet the standards.

The road to this partnership wasn’t always smooth, says Douglas, who arrived at Miami a few years ago when tensions between the hospital and union were running high. Through daily meetings with the union agent, Douglas learned about employee issues and the background of the relationship between the hospital and the union.

Douglas eventually reassured the union representative of his philosophy of transparency. “They have the right to confront and address issues because they represent some of our employees. This is a peer with whom I have to deal, so this peer has unlimited access to me,” says Douglas. “Many times they are the eyes and ears to some issues that we do need to fix.”

In any situation where unionized employees are asked to change the nature of their work, hospital leaders should involve the union ahead of time, says Charles Krugel, a labor, employment law and human resources attorney based in Chicago. Otherwise you’ll spend time, effort and—most important—money initiating a program that will get caught in the union’s grievance and resolution process and go to waste. “As management, you don’t want egg on your face,” says Krugel.

By being open about why a motivation program needs to happen—and by reaching out to the union for involvement and input—employee buy-in is easier to secure, says Krugel. But hospital leaders should enter a project with time for changes to be made and provide a detailed explanation of their plans to increase performance, he adds. This will assure the union that the hospital is serious about the endeavor.

Many hospitals in New York have also found that collaboration between union and management yields the best results. In 2007, a partnership between the 1199 SEIU United Healthcare Workers East and 28 hospitals resulted in a campaign to educate and motivate frontline workers to take a bigger part in infection prevention through better hand hygiene, flu shots for employees, and environmental improvements. The program, created by the union and hospital management, was funded through a grant from the New York State Department of Health.

“We educate our members about improving quality because it’s personal,” says Maria Castaneda, secretary-treasurer for SEIU’s New York chapter. Many of the employees live in the cities and communities of the hospitals, and the union motivates employees to improve by reinforcing the fact that the initiative is for them and those they care about.

It’s on this daily level and through engaging the frontline staff more deeply in patient care that an organization will see returns on improved performance, says Krugel. “If you do something that helps employees be involved in something larger than themselves, you’re going to get more buy-in, and they will feel happier and perform better.”

—Corey Christman

Generally, severance refers to giving an exiting employee a monetary bonus or settlement above and beyond their regular compensation. A separation agreement usually refers to an agreement wherein the exiting employee promises not to sue, file a regulatory agency complaint, take business or information with them, or compete with their former employer. In return, the employer gives the employee something of value (usually money).

So, a business could give an exiting employee severance without a severance or separation agreement, but usually doesn’t use a separation agreement without awarding some form of severance (i.e., consideration). If this is confusing, the below will hopefully clarify my point.

Recently, a client asked me about a separation agreement for an employee over the age of 40. This makes an interesting topic for a blog post (at least for a labor & employment law related blog :-) ).

Relative to dealing with an employee who’s 40 or older, if the employer is seeking a release of all claims pursuant to the Age Discrimination in Employment Act (ADEA), there’s a 21/7 rule that applies. Under the rule, which is actually contained in Section 201 of the Older Workers Benefit Protection Act, a release of claims under the ADEA is only valid if the employee’s release is “knowing and voluntary.” More specifically, in order to be “knowing and voluntary,” the exiting employee has 21 days to review the agreement, with or without legal counsel, and has an additional seven days in which to revoke their signature (beyond the initial 21 day review period). Other requirements may apply given certain considerations. In short, depending on the nature of the separation agreement, the 40 and older employee might have rights not afforded to younger employees.

Regardless of the exiting employee’s age, a separation or severance agreement that’s intended to release the employer from all known or unknown claims is essentially the employer’s purchase of the employee’s agreement not to sue or file a complaint with a government agency, not to take business or information to a competitor, or sometimes, to not even work for a competitor.

When I’m initially contacted about this type of employment agreement, I ask the client why they think they need such an agreement. More specifically, what are your goals/purposes: to reward an exiting employee for tenure and/or quality of service, to prevent a lawsuit or complaint from being filed, to protect the confidentiality of company secrets and information, to prevent an employee from competing with them, or a combination of the aforementioned?

Businesses often ask:

• Should we offer severance to an exiting employee?
• When should we offer it?
• How much should we offer?
• Are the terms negotiable?
• Should we ask an exiting employee to sign a separation agreement that includes noncompete and confidentiality clauses?
• What about protected class considerations (e.g., race, sex, age, disability, etc.)?
• What will my other employees or competitors think if they find out that an employee signed such an agreement or received severance?

In order to help the employer focus on what issues they need to resolve, a business should analyze whether the exiting employee has been contentious or dropped hints of a lawsuit or complaint, or commented about the competition or competing with the employer. In order to help focus the employer on what issues they need to resolve, a business should analyze whether the exiting employee has been contentious or dropped hints of a lawsuit or complaint, or commented about the competition or competing with the employer. If an employer believes that an employee will sue or complain to a regulatory agency, then a separation or separation agreement should be strongly considered. If a lawsuit, complaint or any other factors of the employee’s exit isn’t a concern, then a severance or even no action might be appropriate.

Keep in mind, that unless there’s a contract or agreement to the contrary, or obligations under the Worker Adjustment Retraining & Notification Act (WARN), severance isn’t necessarily required, and in many instances an employee can just leave.

Clients typically ask whether by offering an employee a severance, separation, or some hybrid agreement, they’re setting a legal precedent within their company or creating a feeling or belief of entitlement to such a benefit among employees. In short it’s not likely that the company will be legally obligated to offer the same to other employees. However, if other employees learn about such agreements, there’s a greater degree of possibility that a sense of entitlement will result. So, when deciding whether to use a separation or severance agreement, a business should consider the impact on employee morale, and to at least some extent consider the legal ramifications of using such an agreement.

One way of reaching a bottom line for these agreements is that an employer should not enter into an agreement with an employee, and have to engage an attorney, unless the employer is reasonably sure that they’ll obtain a benefit from the transaction that they wouldn’t get in the normal course of business. Ultimately, as with most business decisions, whether to utilize an agreement or not is a cost versus benefit analysis.

Consistent with my Disclaimer the above is a general discussion–i.e., every specific issue or case leads to its own specific resolution and should be handled accordingly.

2008 Per-Employee Health Care Costs To Exceed $9,300; Wide Disparities Foreseen

By Stephen Miller, October 2007

[From SHRM Online's Compensation & Benefits Focus Area]

The average corporate health benefit expenditure in 2008 will be $9,312 per employee “an increase of 7 percent over 2007″ with annual per-employee contributions exceeding $2,000, according to Towers Perrin’s 2008 Health Care Cost Survey.

But while the cost trend is broadly holding steady, there are significant cost differences for companies that are actively and effectively managing program performance. Those “high-performing companies” will see annual per-employee costs of about $1,500 less than low performers in 2008, or nearly a 20 percent differential, according to the firm’s analysis.

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‘High-performers’ will see per-employee health costs
nearly 20 percent lower than ‘low-performers.’
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The survey database includes information on the health benefit programs provided by more than 300 of the nation’s largest employers, covering nearly 6 million U.S. employees, retirees and dependents.

“The good news is that, for the first time in over a decade, we are seeing a number of companies keeping cost growth near the Consumer Price Index for medical services (medical CPI), which currently stands at about 4 percent,” said Dave Guilmette, managing director of the Towers Perrin health and welfare practice.

In flat dollar terms, 2008 gross health care expenditures are expected to rise by an average of $577 per employee, to an average total cost of $9,312. Employers are expecting to subsidize 78 percent of next year’s premium costs, and employees will have to cover the remaining 22 percent, plus usage-based co-pays, deductibles and co-insurance.

While Towers Perrin foresees the employer-employee premium cost share remaining the same as the 2007 split, the accelerated increase in the actual employee contribution “combined with decreasing benefit values” means that the 22 percent employee share actually buys less coverage than in past years. For example, the incremental out-of-pocket cost employees will assume in 2008 because of plan design changes is approximately $200.

Employee contributions, on average, will jump by $156 per employee per year to $2,040, an 8 percent increase that is roughly twice that of annual employee merit increases. The combined effect is that over the past five years, out-of-pocket costs for employees have essentially doubled, a clear indication of how pronounced the affordability issue remains, particularly for low-wage workers.

Coverage Levels Breakdown

Analyzing the data by coverage level, the average reported 2008 cost of medical coverage will be:

• For active-employee-only coverage: $4,704 per year ($392 monthly).

• For employee-plus-one-dependent coverage: $9,660 per year ($805 monthly).

• For family coverage: $13,704 per year ($1,142 monthly).

The total cost for retirees under age 65 is the highest in the survey, at $569 per month for retiree-only coverage ($6,828 annually), and more for coverage that includes dependents.

Employers continue to shoulder most of the burden. Of the total 2008 premium increase of $577:

• Employers will pay, on average, $421 more per employee.

• Employees will pay, on average, $156 more.

In addition to premiums, active employees and their dependents can expect a co-pay of about $20 for regular doctor office visits and a $30 co-pay for specialist visits.

Under plans with co-insurance, employees will pay about 35 percent of the cost of an office visit. Active employees and their dependents will pay, on average, $10 for generic prescriptions and $25 for brand-name prescriptions in 2008.

Active Management Matters

Among positive news for employers and employees, the survey shows that, for 2008, a number of companies have succeeded in keeping a tight rein on the cost of their own programs and, as such, are helping to keep the overall rate of increase dramatically lower than the double-digit jumps experienced four to eight years ago.

Many companies, however, remain unclear on how to balance health care cost pressures with workforce goals and continue to experience cost increases more characteristic of the late 1990s. The result is wide variation in employer and employee cost burdens among similarly sized companies. For example, the 2008 data show that nearly a quarter of companies (22 percent) are still experiencing increases of 11 percent or more.

To better understand the factors that contribute to cost variation for the past three years, Towers Perrin divided respondents in its annual health care cost database into three categories: low-performing, average-performing and high-performing companies. Performance designations are based on relative costs and cost increases, as well as whether an organization is meeting its health benefit objectives in such areas as efficient purchasing, employee engagement and managing health risks in the employee population.

The Art of the Possible

While nearly a quarter of the survey respondents continue to struggle with double-digit cost increases, nearly half of the high performers are managing to get their increases much closer to the medical CPI of about 4 percent.

Among high performers, 45 percent have cost increases of 5 percent or less evidence, in Towers Perrin’s view, that active management of program performance is an exercise in the “art of the possible,” and an increasingly urgent mandate for companies still experiencing double-digit growth rates.

High-performing companies aren’t simply shifting costs to their employees to keep their costs low but rather are employing a broad range of tactics and strategies to hold the line on costs for both the company and employees. In fact, employees at high-performing companies will pay significantly less than employees at low-performing companies “approximately $1,836 per year (on average) vs. the $2,256 employees at low-performing companies will pay in 2008, according to the survey report.

Retiree Health Trends

The survey data indicate that organizations are taking a different view and exhibiting different commitment levels to programs for retirees. Less than half of the companies Towers Perrin surveyed (47 percent) currently subsidize retiree medical coverage for current or future retirees. (SHRM’s 2007 Benefit Survey Report showed that 35 percent of SHRM members provide retiree health benefits, although 53 percent of large employers did so.)

Of those that are continuing a subsidy, the share they are asking retirees to provide is rapidly increasing, Towers Perrin found, particularly for retirees under age 65. In 2008:

• Retirees under age 65 will pay, on average, $3,324, an 8 percent increase.

• Retirees over 65 will pay, on average, $1,500, a 5 percent increase.

The long-term effect of cost shifting to retirees could be to encourage older workers who want to leave the workforce to stay in their jobs primarily to receive company-subsidized health care, the report predicts.