. . . The GINA rules prohibit a group health plan or group health insurance issuer from collecting genetic information (family history information, among other things) as part of a wellness program or health risk assessment if the group health plan or group health insurance issuer provides certain rewards to the individual for providing the information, or if the information is collected prior to or as part of enrollment in the plan.

. . . As if determining how to proceed under the GINA regulations were not difficult enough, [the Treasury Department] issued final regulations on Sept. 8, 2009, effective for plan years beginning on or after Jan. 1, 2010, requiring employers who sponsor group health plans and certain other responsible persons to self-report and pay excise taxes when they fail to comply with various mandates, including GINA.

The new self-reporting requirement is particularly problematic . . . with respect to the recently released guidance under GINA and adds another issue to the employer's list of questions about how to handle health risk assessments. Effective Jan. 1, 2010, if a group health plan provides a prohibited reward in exchange for genetic information that is used for underwriting purposes or if a group health plan collects genetic information prior to or in connection with open enrollment, the employer will have to self-report the violation and pay an excise tax.

The new reporting obligation applies to violations of a variety of requirements for group health plans, including GINA. Prior to issuance of the new regulations, the taxes applied, but there was no obligation to self-report. Failure to self-report by the due date will result in the imposition of penalties and interest, unless the failure to timely report or pay is due to reasonable cause and not willful neglect. The failure to report and the failure to pay penalties can each be as much as 25 percent of the amount of the unpaid tax. Interest on underpayments of tax is at a variable rate set by the IRS.

The rest of the story . . . .