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‘‘(C) MINIMUM PENALTIES WHERE FAIL-
URE DISCOVERED.—Notwithstanding clauses (i) 
and (ii) of subparagraph (D): 
‘‘(i) IN GENERAL.—In the case of 1 or 
more failures with respect to an indi-
vidual— 
‘‘(I) which are not corrected be-
fore the date on which the plan re-
ceives a notice from the Secretary of 
such violation; and 
‘‘(II) which occurred or continued 
during the period involved; 
the amount of penalty imposed by subpara-
graph (A) by reason of such failures with 
respect to such individual shall not be less 
than $2,500. 
‘‘(ii) 
HIGHER
MINIMUM
PENALTY 
WHERE VIOLATIONS ARE MORE THAN DE 
MINIMIS.—To the extent violations for 
which any person is liable under this para-
graph for any year are more than de mini-
mis, clause (i) shall be applied by sub-
stituting ‘$15,000’ for ‘$2,500’ with re-
spect to such person. 
‘‘(D) LIMITATIONS.— 
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‘‘(i) PENALTY NOT TO APPLY WHERE 
FAILURE
NOT
DISCOVERED
EXERCISING 
REASONABLE
DILIGENCE.—No 
penalty 
shall be imposed by subparagraph (A) on 
any failure during any period for which it 
is established to the satisfaction of the 
Secretary that the person otherwise liable 
for such penalty did not know, and exer-
cising reasonable diligence would not have 
known, that such failure existed. 
‘‘(ii) PENALTY
NOT
TO
APPLY
TO 
FAILURES
CORRECTED
WITHIN
CERTAIN 
PERIODS.—No penalty shall be imposed by 
subparagraph (A) on any failure if— 
‘‘(I) such failure was due to rea-
sonable cause and not to willful ne-
glect; and 
‘‘(II) such failure is corrected 
during the 30-day period beginning on 
the first date the person otherwise lia-
ble for such penalty knew, or exer-
cising reasonable diligence would have 
known, that such failure existed. 
‘‘(iii) OVERALL LIMITATION FOR UN-
INTENTIONAL FAILURES.—In the case of 
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HR 1424 PCS
failures which are due to reasonable cause 
and not to willful neglect, the penalty im-
posed by subparagraph (A) for failures 
shall not exceed the amount equal to the 
lesser of— 
‘‘(I) 10 percent of the aggregate 
amount paid or incurred by the em-
ployer (or predecessor employer) dur-
ing the preceding taxable year for 
group health plans; or 
‘‘(II) $500,000. 
‘‘(E) WAIVER BY SECRETARY.—In the case 
of a failure which is due to reasonable cause 
and not to willful neglect, the Secretary may 
waive part or all of the penalty imposed by sub-
paragraph (A) to the extent that the payment 
of such penalty would be excessive relative to 
the failure involved.’’. 
(b) AMENDMENT RELATING
TO
THE INDIVIDUAL 
MARKET.— 
(1) IN GENERAL.—The first subpart 3 of part 
B of title XXVII of the Public Health Service Act 
(42 U.S.C. 300gg–51 et seq.) (relating to other re-
quirements) is amended— 
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(A) by redesignating such subpart as sub-
part 2; and 
(B) by adding at the end the following: 
‘‘SEC. 2753. PROHIBITION OF HEALTH DISCRIMINATION ON 
THE BASIS OF GENETIC INFORMATION. 
‘‘(a) PROHIBITION ON GENETIC INFORMATION AS A 
CONDITION OF ELIGIBILITY.—A health insurance issuer 
offering health insurance coverage in the individual mar-
ket may not establish rules for the eligibility (including 
continued eligibility) of any individual to enroll in indi-
vidual health insurance coverage based on genetic infor-
mation. 
‘‘(b) PROHIBITION ON GENETIC INFORMATION IN 
SETTING PREMIUM RATES.—A health insurance issuer of-
fering health insurance coverage in the individual market 
shall not adjust premium or contribution amounts for an 
individual on the basis of genetic information concerning 
the individual or a family member of the individual. 
‘‘(c) PROHIBITION ON GENETIC INFORMATION AS 
PREEXISTING CONDITION.—A health insurance issuer of-
fering health insurance coverage in the individual market 
may not, on the basis of genetic information, impose any 
preexisting condition exclusion (as defined in section 
2701(b)(1)(A)) with respect to such coverage. 
‘‘(d) GENETIC TESTING.— 
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‘‘(1) LIMITATION ON REQUESTING OR REQUIR-
ING GENETIC TESTING.—A health insurance issuer 
offering health insurance coverage in the individual 
market shall not request or require an individual or 
a family member of such individual to undergo a ge-
netic test. 
‘‘(2) RULE OF CONSTRUCTION.—Paragraph (1) 
shall not be construed to limit the authority of a 
health care professional who is providing health care 
services to an individual to request that such indi-
vidual undergo a genetic test. 
‘‘(3) RULE OF CONSTRUCTION REGARDING PAY-
MENT.— 
‘‘(A) IN GENERAL.—Nothing in paragraph 
(1) shall be construed to preclude a health in-
surance issuer offering health insurance cov-
erage in the individual market from obtaining 
and using the results of a genetic test in mak-
ing a determination regarding payment (as such 
term is defined for the purposes of applying the 
regulations promulgated by the Secretary under 
part C of title XI of the Social Security Act and 
section 264 of the Health Insurance Portability 
and Accountability Act of 1996, as may be re-
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vised from time to time) consistent with sub-
sections (a) and (c). 
‘‘(B) LIMITATION.—For purposes of sub-
paragraph (A), a health insurance issuer offer-
ing health insurance coverage in the individual 
market may request only the minimum amount 
of information necessary to accomplish the in-
tended purpose. 
‘‘(4) RESEARCH EXCEPTION.—Notwithstanding 
paragraph (1), a health insurance issuer offering 
health insurance coverage in the individual market 
may request, but not require, that an individual or 
a family member of such individual undergo a ge-
netic test if each of the following conditions is met: 
‘‘(A) The request is made pursuant to re-
search that complies with part 46 of title 45, 
Code of Federal Regulations, or equivalent Fed-
eral regulations, and any applicable State or 
local law or regulations for the protection of 
human subjects in research. 
‘‘(B) The issuer clearly indicates to each 
individual, or in the case of a minor child, to 
the legal guardian of such child, to whom the 
request is made that— 
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‘‘(i) compliance with the request is 
voluntary; and 
‘‘(ii) non-compliance will have no ef-
fect on enrollment status or premium or 
contribution amounts. 
‘‘(C) No genetic information collected or 
acquired under this paragraph shall be used for 
underwriting purposes. 
‘‘(D) The issuer notifies the Secretary in 
writing that the issuer is conducting activities 
pursuant to the exception provided for under 
this paragraph, including a description of the 
activities conducted. 
‘‘(E) The issuer complies with such other 
conditions as the Secretary may by regulation 
require for activities conducted under this para-
graph. 
‘‘(e) PROHIBITION ON COLLECTION OF GENETIC IN-
FORMATION.— 
‘‘(1) IN GENERAL.—A health insurance issuer 
offering health insurance coverage in the individual 
market shall not request, require, or purchase ge-
netic information for underwriting purposes (as de-
fined in section 2791). 
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‘‘(2) PROHIBITION
ON
COLLECTION
OF
GE-
NETIC
INFORMATION
PRIOR
TO
ENROLLMENT.—A 
health insurance issuer offering health insurance 
coverage in the individual market shall not request, 
require, or purchase genetic information with respect 
to any individual prior to such individual’s enroll-
ment under the plan in connection with such enroll-
ment. 
‘‘(3) INCIDENTAL COLLECTION.—If a health in-
surance issuer offering health insurance coverage in 
the individual market obtains genetic information in-
cidental to the requesting, requiring, or purchasing 
of other information concerning any individual, such 
request, requirement, or purchase shall not be con-
sidered a violation of paragraph (2) if such request, 
requirement, or purchase is not in violation of para-
graph (1). 
‘‘(f) GENETIC INFORMATION OF A FETUS OR EM-
BRYO.—Any reference in this part to genetic information 
concerning an individual or family member of an indi-
vidual shall— 
‘‘(1) with respect to such an individual or fam-
ily member of an individual who is a pregnant 
woman, include genetic information of any fetus car-
ried by such pregnant woman; and 
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HR 1424 PCS
‘‘(2) with respect to an individual or family 
member utilizing an assisted reproductive tech-
nology, include genetic information of any embryo le-
gally held by the individual or family member.’’. 
(2) REMEDIES
AND
ENFORCEMENT.—Section 
2761(b) of the Public Health Service Act (42 U.S.C. 
300gg–61(b)) is amended to read as follows: 
‘‘(b) SECRETARIAL ENFORCEMENT AUTHORITY.— 
The Secretary shall have the same authority in relation 
to enforcement of the provisions of this part with respect 
to issuers of health insurance coverage in the individual 
market in a State as the Secretary has under section 
2722(b)(2), and section 2722(b)(3) with respect to viola-
tions of genetic nondiscrimination provisions, in relation 
to the enforcement of the provisions of part A with respect 
to issuers of health insurance coverage in the small group 
market in the State.’’. 
(c) ELIMINATION
OF OPTION
OF NON-FEDERAL 
GOVERNMENTAL PLANS TO BE EXCEPTED FROM RE-
QUIREMENTS CONCERNING GENETIC INFORMATION.— 
Section 2721(b)(2) of the Public Health Service Act (42 
U.S.C. 300gg–21(b)(2)) is amended— 
(1) in subparagraph (A), by striking ‘‘If the 
plan sponsor’’ and inserting ‘‘Except as provided in 
subparagraph (D), if the plan sponsor’’; and 
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HR 1424 PCS
(2) by adding at the end the following: 
‘‘(D) ELECTION NOT APPLICABLE TO RE-
QUIREMENTS CONCERNING GENETIC INFORMA-
TION.—The election described in subparagraph 
(A) shall not be available with respect to the 
provisions of subsections (a)(1)(F), (b)(3), (c), 
and (d) of section 2702 and the provisions of 
sections 2701 and 2702(b) to the extent that 
such provisions apply to genetic information.’’. 
(d) REGULATIONS AND EFFECTIVE DATE.— 
(1) REGULATIONS.—Not later than 1 year after 
the date of enactment of this Act, the Secretary of 
Health and Human Services shall issue final regula-
tions to carry out the amendments made by this sec-
tion. 
(2) EFFECTIVE DATE.—The amendments made 
by this section shall apply— 
(A) with respect to group health plans, and 
health insurance coverage offered in connection 
with group health plans, for plan years begin-
ning after the date that is 18 months after the 
date of enactment of this Act; and 
(B) with respect to health insurance cov-
erage offered, sold, issued, renewed, in effect, or 
operated in the individual market after the date 
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HR 1424 PCS
that is 18 months after the date of enactment 
of this Act. 
SEC. 103. AMENDMENTS TO THE INTERNAL REVENUE CODE 
OF 1986. 
(a) NO
DISCRIMINATION
IN
GROUP
PREMIUMS 
BASED ON GENETIC INFORMATION.—Subsection (b) of 
section 9802 of the Internal Revenue Code of 1986 is 
amended— 
(1) in paragraph (2)(A), by inserting before the 
semicolon the following: ‘‘except as provided in para-
graph (3)’’; and 
(2) by adding at the end the following: 
‘‘(3) NO
GROUP-BASED
DISCRIMINATION
ON 
BASIS OF GENETIC INFORMATION.—For purposes of 
this section, a group health plan may not adjust pre-
mium or contribution amounts for the group covered 
under such plan on the basis of genetic informa-
tion.’’. 
(b) LIMITATIONS ON GENETIC TESTING; PROHIBI-
TION ON COLLECTION OF GENETIC INFORMATION; APPLI-
CATION TO ALL PLANS.—Section 9802 of such Code is 
amended by redesignating subsection (c) as subsection (f) 
and by inserting after subsection (b) the following new 
subsections: 
‘‘(c) GENETIC TESTING.— 
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‘‘(1) LIMITATION ON REQUESTING OR REQUIR-
ING GENETIC TESTING.—A group health plan may 
not request or require an individual or a family 
member of such individual to undergo a genetic test. 
‘‘(2) RULE OF CONSTRUCTION.—Paragraph (1) 
shall not be construed to limit the authority of a 
health care professional who is providing health care 
services to an individual to request that such indi-
vidual undergo a genetic test. 
‘‘(3) RULE OF CONSTRUCTION REGARDING PAY-
MENT.— 
‘‘(A) IN GENERAL.—Nothing in paragraph 
(1) shall be construed to preclude a group 
health plan from obtaining and using the re-
sults of a genetic test in making a determina-
tion regarding payment (as such term is defined 
for the purposes of applying the regulations 
promulgated by the Secretary of Health and 
Human Services under part C of title XI of the 
Social Security Act and section 264 of the 
Health Insurance Portability and Accountability 
Act of 1996, as may be revised from time to 
time) consistent with subsection (a). 
‘‘(B) LIMITATION.—For purposes of sub-
paragraph (A), a group health plan may re-
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HR 1424 PCS
quest only the minimum amount of information 
necessary to accomplish the intended purpose. 
‘‘(4) RESEARCH EXCEPTION.—Notwithstanding 
paragraph (1), a group health plan may request, but 
not require, that a participant or beneficiary under-
go a genetic test if each of the following conditions 
is met: 
‘‘(A) The request is made pursuant to re-
search that complies with part 46 of title 45, 
Code of Federal Regulations, or equivalent Fed-
eral regulations, and any applicable State or 
local law or regulations for the protection of 
human subjects in research. 
‘‘(B) The plan clearly indicates to each 
participant or beneficiary, or in the case of a 
minor child, to the legal guardian of such bene-
ficiary, to whom the request is made that— 
‘‘(i) compliance with the request is 
voluntary; and 
‘‘(ii) non-compliance will have no ef-
fect on enrollment status or premium or 
contribution amounts. 
‘‘(C) No genetic information collected or 
acquired under this paragraph shall be used for 
underwriting purposes. 
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‘‘(D) The plan notifies the Secretary in 
writing that the plan is conducting activities 
pursuant to the exception provided for under 
this paragraph, including a description of the 
activities conducted. 
‘‘(E) The plan complies with such other 
conditions as the Secretary may by regulation 
require for activities conducted under this para-
graph. 
‘‘(d) PROHIBITION ON COLLECTION OF GENETIC IN-
FORMATION.— 
‘‘(1) IN GENERAL.—A group health plan shall 
not request, require, or purchase genetic information 
for underwriting purposes (as defined in section 
9832). 
‘‘(2) PROHIBITION
ON
COLLECTION
OF
GE-
NETIC
INFORMATION
PRIOR
TO
ENROLLMENT.—A 
group health plan shall not request, require, or pur-
chase genetic information with respect to any indi-
vidual prior to such individual’s enrollment under 
the plan or in connection with such enrollment. 
‘‘(3) INCIDENTAL
COLLECTION.—If a group 
health plan obtains genetic information incidental to 
the requesting, requiring, or purchasing of other in-
formation concerning any individual, such request, 
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HR 1424 PCS
requirement, or purchase shall not be considered a 
violation of paragraph (2) if such request, require-
ment, or purchase is not in violation of paragraph 
(1). 
‘‘(e) APPLICATION TO ALL PLANS.—The provisions 
of subsections (a)(1)(F), (b)(3), (c), and (d) and sub-
section (b)(1) and section 9801 with respect to genetic in-
formation, shall apply to group health plans without re-
gard to section 9831(a)(2).’’. 
(c) APPLICATION TO GENETIC INFORMATION OF A 
FETUS OR EMBRYO.—Such section is further amended by 
adding at the end the following: 
‘‘(f) GENETIC INFORMATION OF A FETUS OR EM-
BRYO.—Any reference in this chapter to genetic informa-
tion concerning an individual or family member of an indi-
vidual shall— 
‘‘(1) with respect to such an individual or fam-
ily member of an individual who is a pregnant 
woman, include genetic information of any fetus car-
ried by such pregnant woman; and 
‘‘(2) with respect to an individual or family 
member utilizing an assisted reproductive tech-
nology, include genetic information of any embryo le-
gally held by the individual or family member.’’. 
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HR 1424 PCS
(d) DEFINITIONS.—Subsection (d) of section 9832 of 
such Code is amended by adding at the end the following: 
‘‘(6) FAMILY
MEMBER.—The term ‘family 
member’ means, with respect to any individual— 
‘‘(A) a dependent (as such term is used for 
purposes of section 9801(f)(2)) of such indi-
vidual, and 
‘‘(B) any other individual who is a first-de-
gree, second-degree, third-degree, or fourth-de-
gree relative of such individual or of an indi-
vidual described in subparagraph (A). 
‘‘(7) GENETIC INFORMATION.— 
‘‘(A) IN GENERAL.—The term ‘genetic in-
formation’ means, with respect to any indi-
vidual, information about— 
‘‘(i) such individual’s genetic tests, 
‘‘(ii) the genetic tests of family mem-
bers of such individual, and 
‘‘(iii) subject to subparagraph (D), 
the manifestation of a disease or disorder 
in family members of such individual. 
‘‘(B) INCLUSION OF GENETIC SERVICES.— 
Such term includes, with respect to any indi-
vidual, any request for, or receipt of, genetic 
services (including genetic services received pur-
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suant to participation in clinical research) by 
such individual or any family member of such 
individual. 
‘‘(C) EXCLUSIONS.—The term ‘genetic in-
formation’ shall not include information about 
the sex or age of any individual. 
‘‘(D) APPLICATION TO FAMILY MEMBERS 
COVERED UNDER SAME PLAN.—Information de-
scribed in clause (iii) of subparagraph (A) shall 
not be treated as genetic information to the ex-
tent that such information is taken into account 
only with respect to the individual in which 
such disease or disorder is manifested and not 
as genetic information with respect to any other 
individual. 
‘‘(8) GENETIC TEST.— 
‘‘(A) IN
GENERAL.—The term ‘genetic 
test’ means an analysis of human DNA, RNA, 
chromosomes, proteins, or metabolites, that de-
tects genotypes, mutations, or chromosomal 
changes. 
‘‘(B) EXCEPTIONS.—The term ‘genetic 
test’ does not mean— 
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‘‘(i) an analysis of proteins or metabo-
lites that does not detect genotypes, 
mutations, or chromosomal changes, or 
‘‘(ii) an analysis of proteins or me-
tabolites that is directly related to a mani-
fested disease, disorder, or pathological 
condition that could reasonably be detected 
by a health care professional with appro-
priate training and expertise in the field of 
medicine involved. 
‘‘(9) GENETIC
SERVICES.—The term ‘genetic 
services’ means— 
‘‘(A) a genetic test; 
‘‘(B) genetic counseling (including obtain-
ing, interpreting, or assessing genetic informa-
tion); or 
‘‘(C) genetic education. 
‘‘(10) UNDERWRITING
PURPOSES.—The term 
‘underwriting purposes’ means, with respect to any 
group health plan ,or health insurance coverage of-
fered in connection with a group health plan— 
‘‘(A) rules for, or determination of, eligi-
bility (including enrollment and continued eligi-
bility) for benefits under the plan or coverage; 
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